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Finance Leases: A Hidden Channel of China’s Shadow Banking System
Jeffrey (Jinfan) Chang, 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...
Trade Policy Uncertainty and Firm Innovation
Qing Liu, Hong Ma, May 12, 2021This study proposes a novel channel through which trade liberalization may induce innovation through the reduction of trade policy uncertainties (TPU) in destination markets. To verify this link, we utilize the significant reduction of TPU engendered by China's accession to the World Trade Organization (WTO) in 2001 as a quasi-natural experiment. We find that reduction in TPU significantly encourages firms' patent applications and that firms' innovation responses to TPU reduction vary by productivity, ownership, exporting status, and the irreversibility of investment.
Government as Venture Capitalists in AI
Martin Beraja, Wenwei Peng, David Yang, Noam Yuchtman, Nov 06, 2024This article discusses that government venture capital funds in China are more geographically dispersed than private venture capital, particularly in inland and less developed areas, and they are more inclined to invest in AI companies with weaker ex-ante productivity signals.
Social Media Engagement Increases Government Action, Decreases Pollution
Mark Buntaine, Michael Greenstone, Guojun He, Mengdi Liu, Shaoda Wang, Bing Zhang, Dec 14, 2022In China, citizen participation in environmental governance via social media could significantly improve regulatory effort, leading to substantial environmental benefits.
Misallocation of Managerial Talent in China’s Housing Boom
Yu Shi, Feb 20, 2019The housing boom in China has raised great concerns about capital and credit misallocation. Recent research by IMF Economist Yu Shi finds that China’s imperfect financial market and regulations in the land market have also led to a misallocation of managerial talent, dampening productivity and growth in the non-real estate sectors. Productive managers in other sectors moved to the real estate sector...
