A Bridge on Economic Issues between China and the World
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Haoyuan Ding, Haichao Fan, Shu Lin, Feb 21, 2018A key foundation of Chinese-style institutions is that different levels of government control resources and utilize their power to support businesses connected to them. Professors Haoyuan Ding of Shanghai University of Finance and Economics, Haichao Fan of Fudan University, and Shu Lin of the Chinese University of Hong Kong develop a theoretical model and present supporting empirical evidence to show how this institutional feature affects firm exports in China. In particular, they find that political connection has a positive effect on export in industries that heavily rely on external finance and contracting environment, but a negative effect on export in other industries.
Market Expanding or Market Stealing? Competition with Network Effects in Bike-Sharing
Guangyu Cao, Ginger Zhe Jin, Xi Weng, Li-An Zhou, Jan 16, 2019Positive network effects may lead to winner-takes-all in some markets. The column analyses dockless bike-sharing in China to show instead how an incumbent can benefit from positive spillovers from a competitor’s entry. In the case of bike-sharing, consumers multi-home, the market exhibits positive network effects, and investment by two firms is more cost-efficient than investment by one.
The Real Effects of the Chinese Stock Market
Itay Goldstein, Bibo Liu, Liyan Yang, Sep 29, 2021In a 2019 survey jointly administered by the China Securities Regulatory Commission (CSRC) and the PBC School of Finance at Tsinghua University (Tsinghua PBCSF), more than 90% of Chinese public firms report that they closely monitor the stock market for the purposes of learning information to guide real investment decisions and of accessing external financing. These findings provide direct evidence for the wide existence of market feedback via a learning channel and a financing channel, suggesting that the Chinese stock market is not just a side show, but instead, affects the real economy.
Going Green in China: Firms’ Responses to Stricter Environmental Regulations
Haichao Fan, Joshua Graff Zivin, Zonglai Kou, Xueyue Liu, Huanhuan Wang, Apr 29, 2020Evidence from China shows that firms respond to stricter enforcement of the emission reduction target by reducing their pollution. This effect is stronger for firms in industries with higher pollution intensity. Stricter environmental regulations also lead to sharp declines in firms’ profits, capital, and labor. A sequence of tests of the underlying mechanisms reveals...
Resolving Zombie Firms is Key for Sustaining Growth in China
Yiping Huang, Yuyan Tan, Jun 28, 2017China's non-financial borrowing continued to expand though the government vowed to take deleveraging among its top five policy priorities in 2016. Current member of the People's Bank of China's Monetary Policy Committee, Prof. Yiping Huang of Peking University, and his co-author Yuyan Tan of Peking University argue that resolving Zombie firms is a key for China’s deleveraging. The rising share of Zombies firms in China after 2010 reduces the financial efficiency and brings in financial market risks. Dealing with the Zombie firms is now critical for sustaining China’s long-run economic growth and managing its financial stability.
