This study investigates whether corruption differentially affects contracting through auctions and negotiations. Using data on Chinese land-market transactions, where corruption is known to be present, we first show that, on average, it exerts similar effects on transactions carried out via auctions and negotiation. However, this finding masks important heterogeneity – auctions featuring healthy competition are less affected by corruption, and significantly less so than negotiation. We then develop a simple model of bidding under the possibility of corruption that rationalizes our findings.

Biodiversity conservation incurs substantial economic costs. We investigate how financial markets price the risks such costs induce, exploiting the “Green Shield Action,” a major regulatory initiative launched in China in 2017 to enforce biodiversity preservation rules in national nature reserves. While improving biodiversity, the initiative led to significant increases in bond yields for municipalities with these reserves. The effects are driven by increases in local governments’ fiscal risk due to expected increases in transition costs resulting from shutting down illegal economic activities within reserves and additional public spending on biodiversity. Investors show little non-financial consideration towards endeavors counteracting biodiversity loss.

We examine how Federal Open Market Committee (FOMC) meetings influence international stock returns, highlighting that the standard Fed news channel creates an even-week pattern in the United States and other highly integrated developed markets. By analyzing the Chinese market, we demonstrate that the news channel contributes to higher returns, operating in non-US countries even without international equity flows. Additionally, we identify an uncertainty channel that produces a contrasting odd-week pattern. Placebo tests indicate that the effectiveness of the uncertainty channel may depend on the financial market’s openness. Overall, our research enriches and extends the existing view on how the Federal Reserve, as the leader of central banks, shapes international stock market returns throughout the entire FOMC cycle.

We examined reference point adaptation following gains or losses in security trading using participants from China, Korea, and the US. In both questionnaire studies and trading experiments with real money incentives, reference point adaptation was larger for Asians than for Americans. Subjects in all countries adapted their reference points more after a gain than after an equal-sized loss. When we introduced a forced sale intervention that is designed to close the mental account for a prior outcome, Americans showed greater adaptation toward the new price than their Asian counterparts. We offer possible explanations both for the cross-cultural similarities and the cross-cultural differences.

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.

Based on 31 provinces, municipalities, and autonomous regions in mainland China, this paper explores the temporal and spillover effects of the provincial COVID19 pandemic on stock returns. The results show that stock returns are significantly and negatively correlated both with the pandemic in the firm’s headquartered province (referred to as, local province), and the pandemics in other provinces (referred to as, non-local provinces). By multiple time dimensions analysis, we find that at the weekly (monthly) level, the impact of the pandemic in local province on stock returns is larger (weaker) than the pandemics in non-local provinces, showing the temporal (spillover) effects. Mechanism analysis shows that COVID-19 can quickly reduce investors’ attention to stock market. The heterogeneity analysis shows that firms owned by state, with bad CSR, or a higher proportion of shares held by the largest shareholder are more affected by COVID-19. After replacing samples and time intervals, the results remain robust.

We study how bank liberalization affects analyst forecast accuracy using two interest rate deregulations in China—the removal of the cap on bank lending rates in 2004 and the removal of the floor in 2013—as quasi-natural experiments. Our results show that the analyst forecast accuracy for high-risk firms decreases significantly after the removal of the lending rate cap, whereas analyst forecast accuracy for low-risk firms increases significantly after the removal of the lending rate floor. Moreover, interest rate liberalization affects forecast accuracy through operational risk and information asymmetry channels. Furthermore, the impact was concentrated on firms whose actual performance fell short of performance expectations and those that received more bank loans. Our findings imply that interest rate liberalization policies may have unintended consequences for analyst forecasts.

The “Internet celebrity economy” is a business model aimed at capitalizing on online traffic based on the purchasing power of users on social media in which “influencers”—highly influential individuals—exercise their marketing power to create a fandom. China has witnessed an abrupt outbreak in its “Wanghong” (internet celebrity) economy since 2016, eventually leading to consecutive high closes for related stocks from around 2020. The empirical findings are as follows: First, investors’ attention to Wanghong stocks and cumulative abnormal returns (CARs) are significantly positively associated. However, operational results and CARs are weakly linked, implying that the economic impact of intense influencer marketing is short-lived, and abnormal returns constitute an anomaly. Second, the positive abnormal returns of Wanghong stocks last approximately six months, which overlaps with the boom period of the Wanghong index based on influencer news articles.

The study introduces 'earnings purity,' a concept based on the 'gold content' of target earnings, to evaluate its impact on merger and acquisition (M&A) premiums. Our findings reveal that targets with higher earnings purity command increased valuations and premiums. Further analysis of the information effects uncovers a U-shaped relationship between earnings purity and negotiation duration, suggesting that elevated premiums might not always be justified. The heterogeneity test indicates that the effect of a target firm's earnings purity on M&A premiums is more pronounced in cross-border and inter-industry M&As. However, it is less influential in cases with larger target firms and better external conditions. These results highlight the dual aspects of M&As, presenting them as both advantageous and potentially hazardous.

This paper examines the relationship between population aging and corporate digital transformation from the perspective of demographic changes. Generally, the findings indicate that population aging notably contributes to corporate digital transformation, mainly through increasing labor costs, including expected and actual labor costs. Further analysis suggests that the above effects are significantly weakened in samples of firms with lower levels of regional intellectual property protection, higher corporate financial constraints, and shorter-sighted managerial decision-making. Moreover, the economic consequences test implies aforementioned favorable effects can enhance corporate total factor productivity.