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Special Deals from Special Investors: The Rise of State-Connected Private Owners in China
Chong-En Bai, Chang-Tai Hsieh, Michael Zheng Song, Xin Wang, Feb 10, 2021We document a hierarchy of private owners connected to the state through equity investment and a rapid expansion of this hierarchy over the past two decades. We build a model to show how the effects of a special deal from a state investor can be transmitted and amplified through the hierarchy. Our estimation suggests that the expansion in the span of state-connected private owners may have increased aggregate output of the private sector by 4.2% a year between 2000 and 2019.
Do Multinationals Transfer Culture? Evidence on Female Employment in China
Heiwai Tang, Yifan Zhang, Nov 10, 2021In our recent paper (Tang and Zhang 2021), we investigate the global diffusion of culture through multinationals. We study specifically how foreign affiliates serve as a vehicle to diffuse gender norms from their countries of origin to China. Based on Chinese manufacturing firm-level data, we find that foreign affiliates in China tend to employ proportionally more female workers than local Chinese firms within the same industry...
Rebalancing in China: Progress and Prospects
Longmei Zhang, Aug 02, 2017This paper develops a framework for China’s rebalancing, reviews past progress, and discusses medium-term prospects. China has advanced well in reducing its excessive external surplus and moving towards consumption and services, while still lagging behind in reducing credit reliance, environmental pollution, and income inequality. Going forward, the economy will continue rebalancing in many dimensions, while credit will remain China’s Achilles heel unless decisive corporate restructuring and SOE reforms are implemented.
Implicit Guarantees and the Rise of Shadow Banking: the Case of Trust Products
Franklin Allen, Xian Gu, C. Wei Li, Jun Qian, Yiming Qian, Sep 06, 2023The prevalent implicit guarantees provided by financial intermediaries have been a central feature of shadow banking products in China. Our theoretical investigation shows that providing implicit guarantees can be the second-best arrangement and mitigate capital misallocation.
The Value of Bankruptcy Court in Financial Distress: Evidence from Chinese Bond Market
Bo Li, Mai Li, Songnan Li, Laura Xiaolei Liu, Mar 15, 2023In this paper, we find that the introduction of specialized bankruptcy courts, which are run by better-trained judges and subject to less government intervention, reduces the cost of bond financing by around 10%.
