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Data, Collateral, and Implications for the Credit Cycle
Leonardo Gambacorta, Yiping Huang, Zhenhua Li, Han Qiu, Dec 09, 2020The use of massive amounts of data by large technology firms (big techs) to assess firms’ creditworthiness could reduce the need for collateral in credit markets. Using a unique dataset of more than 2 million Chinese firms that received credit from both an important big tech firm (Ant Group) and traditional commercial banks, we find that a greater use of big tech...
Improving State Effectiveness by Discouraging Civil Servants from Flattering Their Leaders
Alain de Janvry, Guojun He, Elisabeth Sadoulet, Shaoda Wang, Qiong Zhang, Mar 11, 2020Evaluation of public employees performance is essential to induce higher work efforts. We use an experiment in two provinces of china to explore how to design such evaluation. Results show that the incentive effect of evaluation can be larger if the employee does not know ex-ante who the evaluator will be, thus reducing attempts at personally influencing the evaluator and enhancing instead job achievements.
Reluctant Entrepreneurs: Evidence from China’s SOE Reform
Hanming Fang, Ming Li, Zenan Wu, Yapei Zhang, Oct 09, 2023In this column, we examine how the presence of state-owned enterprises (SOE) affects the private sector by influencing the allocation of skills across SOEs, private sector waged employment and entrepreneurship.
Who Captures the Power of Pen?
Jiaxing You, Bohui Zhang, Le Zhang, Oct 17, 2018We study how government control affects the roles of the media as an information intermediary and a corporate monitor. Comparing a large sample of news articles written by state-controlled and market-oriented Chinese media, we find that articles by the market-oriented media are more critical, more accurate, more comprehensive, and timelier than those by the state-controlled media. Moreover, only articles by the market-oriented media have a significant corporate governance impact. Subsample analyses, interviews with journalists, and a survey of university students suggest that the market-oriented media’s superior effects are explained by their operating efficiency and independence.
Finance Leases: A Hidden Channel of China’s Shadow Banking System
Jinfan Zhang, Ting Yang, Yanping Shi, Nov 11, 2020We find that banks use their affiliated leasing firms to provide credit to constrained clients in order to circumvent the government’s targeted monetary tightening policy, which offsets the expected decline in traditional bank loans in overcapacity industries and hampers the effectiveness of the monetary policy. Although this regulatory arbitrage may cause systemic risk at the macro level, bank-affiliated leasing firms...
