A Bridge on Economic Issues between China and the World
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Visible Hands: Professional Asset Managers’ Expectations and the Stock Market in China
John Ammer, John Rogers, Gang Wang, Yang Yu, Jun 11, 2025Mutual funds have become an important type of private institutional investor in Chinese security markets, with assets under management exceeding $3 trillion. We study how Chinese fund managers’ growth expectations affect their equity investment decisions, and in turn, the effects on stock prices. We identify a strong short-run causal effect of growth expectations on stock returns. We also find that fund investment helps bring prices in line with firms’ longer-run earnings prospects.
Do Chinese Cultures Spawn Family Businesses
Joseph P. H. Fan, Qiankun Gu, Joyce Xin Yu, Jun 18, 2025Using a sample of Chinese private-sector firms that went public, we find that founders from the country’s regions with stronger collectivist cultures engage more family members as managers, retain more firm ownership within the family, and share the controlling ownership with more family members. Our study suggests that the collectivist culture boosts the formation of family businesses because the collectivist culture reduces information asymmetry, shirking problems, and associated monitoring costs among family members.
Rural Road Stimulus and the Role of Matching Mandates on Economic Recovery in China
Anthony Howell, Oct 30, 2024The findings show that the temporary cost share exemption boosts short-term income growth, increases local investment in infrastructure, and promotes entrepreneurial activities, particularly among returning migrants.
Input Trade Liberalization and Firm Labor Market Power in China
Illenin O. Kondo, Yao Amber Li, Wei Qian, Jul 30, 2025More trade, more jobs? Or fewer? China’s accession to the WTO has catalyzed a rich research agenda on the labor market consequences of trade liberalization. Departing from the assumptions of perfectly competitive labor markets, we ask whether Chinese firms exercised more or less labor market power when input tariffs fell with China’s WTO accession? We show that input trade liberalization reduced labor monopsony power in China, especially for skill-intensive firms and in markets with more labor supply growth.
Investor Memory and Biased Beliefs: Evidence from the Field
Zhengyang Jiang, Hongqi Liu, Cameron Peng, Hongjun Yan, Aug 20, 2025We explore how investor memory drives belief formation and trading behavior, fueling financial market volatility. Drawing on surveys of over 17,000 Chinese retail investors linked to trading records, our study finds that recollections of past returns—shaped by both salient market events in the past and current market conditions—strongly influence expectations of future returns and investors’ portfolio choices, often outweighing objective historical data. These findings suggest that memory-driven biases amplify boom-and-bust cycles, with policy implications for improving market stability by counteracting distorted recall.
