China frequently suffers from weather related natural disasters and is a source of wide-spread systemic risk throughout large swaths of China. During these periods farmers crops are at risk and for a largely poor population few can afford the turmoil to livelihoods that goes along with drought. Throughout the developing world there is serious interest in index-based weather insurance for agriculture, and in China the China Insurance Regulatory Commission is investigating the insurability of weather related risk. Beyond that little formal research has appeared on either the demand, use or design of index insurance in China. This paper provides a preliminary assessment of farmers’ willingness to pay for drought insurance. Based on a survey of over 890 farm households in Shaanxi and Gansu provinces the results show that while there is significant demand, price may be an issue. Our results show that the majority of farm households would transition from a no-demand state to a demand state as prices fall. This suggests that in order to gain wide gain adoption there may be a need for governmental intervention.

The 2005 split-share reform in China mandated the conversion of previously non-tradable shares into tradable status. The reform was swift and changed investors?ability to trade corporate equities in a US$400 billion market. This paper examines the e¤ects of the 2005 stock market reform on ?rms? real and ?nancial outcomes. It does so exploiting multiple institutional features of the conversion program. We ?rst examine a small pilot trial conducted at the beginning of the reform, which we are able to replicate using the same data and selection criteria that was used by regulators. We also take advantage of the staggered nature of the larger conversion schedule, whereby over a thousand ?rms converted their outstanding shares at di¤erent times within a pre-speci?ed window. These various wrinkles produce counterfactuals against which to gauge the economic e¤ects of secondary equity trading. Using a time-varying treatment estimation approach, we identify increases in corporate pro?tability, investment, value, and productivity as pre-existing shares were allowed to trade in or- ganized exchanges. We also identify changes in ?rms?propensity to issue new shares, pay dividends, and engage in merger deals. Our ?ndings provide new insights on the role of stock markets in shaping corporate behavior and on the impact of regulation on economic growth.