Does large-scale privatization increase income inequality? To answer this question, we analyze the impact of China’s reform of state-owned enterprises on labor market outcomes in urban areas from 1992 to 2004, exploiting cross-prefecture variation in reform exposure stemming from initial differences in the employment shares of urban collective enterprises and state-owned enterprises. Our analysis reveals that workers in prefectures with higher exposure to the reform experienced a more rapid decline in employment and a slower increase in income, compared to those in less exposed areas. Further analysis shows that individuals with lower income and those with lower educational attainment experienced greater losses. A back-of-the-envelope analysis indicates that the reform contributed to more than 40% of the study period’s increase in income inequality.

In this paper, we use a unique dataset of the List of Dishonest Judgment Debtors to explore the impact on the social credit environment of the increasing housing prices in China. We find that housing price has a negative impact on the local credit environment. Dominance analysis suggests that housing price contributes to the model R-squared (R2) by an overwhelming majority, suppressing any other economic or social factors in explaining the deteriorating credit environment. Heterogeneity analysis shows that the rule of law and moral standards mitigate the negative influence of high housing prices, while income inequality exacerbates the influence.

Identifying and addressing the factors influencing the within-firm pay gaps has become a pressing issue amidst the widening global income inequality. This study investigates the impact of corporate ESG ratings on employee income and pay gaps using data from Chinese-listed companies between 2017 and 2021. The results suggest that ESG ratings significantly increase employee income. Further research indicates that ESG ratings exacerbate the within-firm pay gaps and income inequality due to the varying bargaining power among employees. This effect is particularly pronounced in non-state-owned and large-scale companies. This is also true for all kinds of companies in traditional and highly competitive industries. However, reducing agency costs and improving information transparency can help vulnerable employees with weaker bargaining power in income distribution to narrow their pay gaps. The research findings offer important insights to promote fair income distribution within companies and address global income inequality.

Using a large sample of US individuals, we show that individuals with higher levels of trust have lower likelihoods of default in household debt and higher net worth. The effect is driven by trust values inherited from cultural and family backgrounds more than by trust beliefs about others. We demonstrate a causal impact of trust on financial outcomes by extracting the component of trust correlated with early-life ex- periences. The effect of trust is more pronounced among females, those with lower education, lower income, lower financial literacy, and higher debt-to-income ratio. Further evidence suggests that enhancing individuals’ trust, to the right amount, can improve household financial well-being.

This paper explores the factors that influence redistributive preferences in the context of significant economic transformation, focusing on the transition premium and growth. Using an online survey experiment with a nationally representative sample from China, we find that priming getting rich via relatively less meritocratic, yet representative ways under market transition in post-reform China reduces redistributive support, specifically for policies that aim to take from the rich and the belief in the government’s duty to redistribute, indicating the presence of a set of fairness views in China that deviate from the conventional meritocratic paradigm. Heterogeneous treatment effects analyses reveal that such non-meritocratic fairness views are a general phenomenon, and self-interest in the form of subjective economic pressure only serves as a secondary concern. While people feel that the rich are more deserving and demand less redistribution regardless of subjective economic pressure, only those under less economic pressure exhibit decreased support for policies that aim to help the poor. These representative ways of getting rich under market transition are similarly fair compared to winning a lottery, far less fair than a self-made entrepreneur, but much more legitimate than acquiring wealth through corruption. Priming China’s growth story does not result in statistically significant changes in redistributive support. Additionally, we rule out the influence of three relevant confounders: low tax salience, preference falsification under authoritarianism, and misperceptions about relative income positions and intergenerational occupational mobility. We argue that such non-meritocratic fairness views are particularly salient in societies that break away from a centrally-planned economic system in the past and transition towards a high-growth market economy, where economic opportunities are becoming more inclusive.

This paper uses the China Household Income Project 2018 dataset to estimate returns to education for various Hukou-migration subgroups. We overcome the endogeneity problem of years of schooling using an instrument based on the Great Expansion of Higher Education policy. Our results indicate that the highest returns are for urban native workers (27.4%), followed by urban Hukou-converted (25.0%) and rural native workers (14.7%). In contrast, the returns to education for rural-urban migrant workers are insignificant. Further analyses suggest that Hukou conversion significantly increased the returns to education for rural-origin people by enabling them access to better job opportunities.

This study investigates the effect of a large-scale Internet upgrade program in China on the consumption of rural households. Using data from the China Family Panel Studies, we find that the Internet upgrade at the village level significantly increases rural households’ expenditures on total, online, and ofline consumption. Moreover, high-educated and young households, as well as those living in difficult-to-access villages exhibit a larger boost in total consumption. The mechanism analysis rules out income as the possible channel but highlights the role of online information exchange. ln particular, the variations in the increase in online time among households align with the heterogeneous responses in total consumption.

This study examines how foreign equity participation affect risk-taking of commercial banks using Chinese bank-level data from 2012-2020. Our analysis is based on strategic alliance theory and principal-agent theory, and we find that banks with foreign equity participation exhibit a significantly lower risk-taking compared to those without foreign equity participation, and this finding is shown to be consistent in a series of robustness tests. Additional analysis shows that equity checks and balances reinforce this negative relationship. Furthermore, we document that the incidence of such effects is more pronounced for Chinese banks which are smaller and less based on income diversification. Our results suggest that the proportion of foreign equity participation should be moderately increased to form equity checks and balances.

In order to clarify the effect and mechanism of servitization level and digital transformation on the performance of listed sporting goods manufacturing enterprises in China, the index of the degree of digital transformation is constructed based on the data of 31 sporting goods manufacturing enterprises listed on Shanghai and Shenzhen A shares and the New OTC Market in China, taking the proportion of service business income in enterprise operating income as the index of servitization level, by analyzing the semantic expression of national policy related to digital economy and collecting "digital" category keywords in enterprise annual report with the help of crawler technology, then, the influence of servitization level and digital transformation on enterprise performance is discussed, and whether digital transformation plays a moderating effect between servitization and enterprise performance is tested. The results show that the servitization level suppresses the performance of listed sporting goods manufacturing enterprises, and there is a "Servitization Paradox" phenomenon. The degree of digital transformation has a positive U-shaped impact on enterprise performance, and at the same time, digital transformation has a weak positive moderating effect on servitization level and enterprise performance.

Suppliers’ bargaining power mainly comes from their market position or top supplier status. However, it is also affected by the horizontal competition from top supplier size homogeneity based on the purchasing proportion of a buyer. Using a sample of listed companies in China, we find an inverted U-shaped relationship between the supplier size homogeneity with shared customers and trade credit provisions. As size homogeneity increases, suppliers may increase (decrease) trade credit provision to expand sales (for cash income). That is, based on the degree of supplier size homogeneity, the homogeneity may strengthen or weaken the supplier competition effect. We also find that if upstream and downstream firms have associated relationships, or if the business environment is poor, the competition effect from supplier size homogeneity is not obvious, whereas the weak financing ability of buyer promotes the supplier competition. In addition, the competition effect from supplier size homogeneity is not observed in state-owned firms.