Shill bidding, the use of non-genuine bids to inflate prices, undermines auction market integrity. Exploiting China’s online judicial housing auctions as a laboratory, we identify 2% of participants as suspected shill bidders, affecting 8% of auctions. They raise price premium by 14.3%, causing an annual deadweight loss of ¥570 million for homebuyers. Mechanism analysis reveals they create bidding momentum and intensify competition. We establish causality using a difference-in-differences analysis leveraging a 2017 regulatory intervention and an instrumental variable approach using dishonest judgment debtors. These findings offer actionable insights for policymakers and auction platforms to combat fraud in online high-stake auctions.

This study analyzes the network structures of institutional shareholders and examines the influence of institutional investor cliques on corporate innovation. Our empirical results reveal that institutional investor cliques significantly enhance both innovation input and output. To mitigate endogeneity concerns and establish causality, we adopt multiple empirical strategies. Further evidence suggests that the beneficial impact of institutional investor cliques on firm innovation can be attributed to increased innovation investment efficiency, enhanced employee productivity, reduced information asymmetry, and decreased managerial myopia. Additionally, we find that the positive effect of institutional investor cliques on firm innovation is more pronounced in non-state-owned enterprises and is particularly evident in firms with severe agency conflicts, CEO duality issues, highly competitive product markets, and for firms that have low stock liquidity.

We examine the impact of state-owned shareholders on fraud within private firms. Utilizing a sample of A-share private listed firms in China observed from 2008 to 2021. We discover a significant negative association between state-owned shareholders and the likelihood of fraud in private firms. State-owned shareholders primarily act as inhibitors of fraud, and their effect on the probability of fraud being detected is not statistically significant. This finding remains robust even after conducting a series of sensitivity tests to mitigate potential selectivity bias and reverse causality endogeneity issues. In the analysis of heterogeneity, we found that state-owned shareholders play a more active role under conditions of imperfect external institutional development, and they also exert a more significant inhibitory effect on enterprises with lower governance levels and higher business risks. Our mechanism test demonstrates that the inhibitory effect of state-owned shareholders on corporate fraud is achieved by improving corporate governance and alleviating financial distress. This study also examines the impact of state-owned shareholders' local characteristics, external supervision mechanisms, and internal governance mechanisms in unique Chinese enterprises on fraudulent behaviour by private enterprises. Overall, our study provides empirical evidence that state-owned shareholder ownership is associated with reducing fraudulent behaviour within private firms.

This study examines how classified boards affect workplace safety, an important dimension of employee welfare. Using comprehensive establishment-level injury data from the U.S. Occupational Safety and Health Administration and a novel classified board database, we document that firms with classified boards experience 12-13% lower workplace injury rates. To establish causality, we employ instrumental variable and difference-in-differences approaches exploiting staggered board declassifications. The safety benefits of classified boards operate through increased safety expenditures, reduced employee workloads, and enhanced external monitoring through analyst coverage. These effects are strongest in financially constrained firms and those with weaker monitoring mechanisms. Our findings support the bonding hypothesis that anti-takeover provisions facilitate long-term value creation by protecting stakeholder relationships and provide novel evidence that classified boards benefit rank-and-file employees, not just executives and major customers. The results reveal an important mechanism through which governance structures impact employee welfare and challenge the conventional view that classified boards primarily serve managerial entrenchment.

The study aims to explain the economic impact of Internet implication in tourism sector by taking sample of mega project listed countries (which provide big pitch to boost tourism business). Our work find the volatility cause of tourism revenue at country i, by examining the inbound tourist expenditures as a factor of technological infrastructure. We deploy data ranging from 1990 to 2017 and uses error correction model as representative of Autoregressive-Distributed Lag (ARDL) model after addressing diagnostic tests (for data reliability concern). We found long- and short-run association between tourism expenditure and information and communication technology (ICT) proxies in case of developed economies, while only short-run association in underdeveloped countries. The startling scenario about underdeveloped economies are also confirmed by one-way causation in our analysis. After sensitive analysis at each slot, the study concludes that tourism revenue is streaming low across those boundaries where tourists a

We examine a unique phenomenon among exchange traded funds (ETFs) in the Chinese stock market, finding that ETFs pervasively participate in initial public offerings (IPOs) to profit from underpricing. The ETF IPO participation passes primary market benefits to retail investors, providing benefits from hard-to-reach investment opportunities. These active moves showing ETFs are not entirely passive highlight the gains of the active management. However, we observe that this activity leads to increased non-fundamental volatility and short-term return reversals, as well as decreased investment-q sensitivity among ETF member stocks, presenting a negative externality. Using a policy shock as the quasi-natural experiment, we establish the causality of these effects, underscoring the dual nature of ETFs active management.

Rural banking competition may promote or hinder agricultural total factor productivity (TFP). We analyze a novel dataset on all commercial bank branches in rural China, combined with measures of productivity based on stochastic frontier analysis. To identify causality, we use: 1) an instrumental variable approach based on the administrative division of banks, and 2) a propensity score matching difference-in-difference approach exploiting banking de-regulations in 2009. Both methods reveal that competition has a positive impact on TFP. A heterogeneity analysis finds that the effect is primarily significant along the Beijing-Kowloon railway and its East side. Technology adoption is the typical channel through which lending is hypothesized to impact TFP. We find that the positive effect of competition is larger in areas with greater technology use, but we find an insignificant direct impact of concentration on technology adoption, suggesting the channels of effect may be more complex than previously thought.

By exploring additional information, both institutional investors’ site visits and analyst coverage can stimulate corporate innovation. However, because analysts are more specialized in information exploration, their existence should weaken the effect of institutional site visits on corporate innovation. By using Chinese listed firms from 2009 to 2013, we investigate the effect of institutional site visits on firms’ innovation output, with a focus on its heterogeneity from analyst coverage. We use patent citation records to accurately measure firms’ innovation output. We find that institutional site visits significantly enhance corporate innovation among firms without analyst coverage, among firms with low analyst coverage, while this effect turns insignificant among firms with high analyst coverage. IV estimations confirm the causality. Additionally, we find that our major results exist only among non-SOEs, firms with a lower quality of information disclosure, firms with lower liquidity, and newly listed firms. Overall, this paper helps better understand the interaction between institutional site visits and analyst coverage regarding information exploration.

This paper examines the different responses of local and foreign investors to host government risk perceptions in the context of extreme events. We develop COVID-19 attention indices that capture attention related to COVID-19 according to China Central Television (CCTV) news program and further construct the government’s risk perception (GRPC) measure about COVID-19. Given the cross-listed AH-shares in China, we find that GRPC caused the extreme movement of stock markets by applying the multi-quantile VaR Granger causality approach. The results show that the reaction of cross-listed stocks in the A-share market is more inflexible than that in the H-share market during the outbreak period of the pandemic, foreign investors follow GRPC as a weather vane than local investors, and both types of investors are more concerned about the pessimism of GRPC. In the period of epidemic normalization, local and foreign investors prefer the optimistic attitude conveyed by the Chinese government.

In recent years, numerous Chinese peer-to-peer (P2P) lending platforms have collapsed, prompting us to investigate the regulation and monitoring of the fintech industry. Using a unique dataset of P2P lending platforms in China, we examine the effect of government monitoring on platform collapses. Exploiting platforms’ locational proximity to regulatory offices as a proxy for government monitoring, we show that greater geographical distance results in a higher likelihood of platform collapse. Specifically, for every 10% increase in the driving distance from the platform to the local regulatory office, the likelihood of collapse increases by 10.2%. To establish causality, we conduct a differencein-differencesanalysis that exploits two exogenous shocks: government office relocation and subway station openings. We further explore two underlying channels: the information channel through which greater regulatory distance reduces the likelihood of regulators’ onsite visits and the resource constraint channel, through which greater regulatory distance significantly increases the local regulatory office’s monitoring costs. Overall, this study highlights the importance of onsite regulatory monitoring to ensure the viability of online lending platforms.