When examining corporate governance in China, it is crucial to recognize the unique socioeconomicstructures and legal systems at play. The mechanisms of corporate governance theorized in the West might not necessarily have the same impact in China. In particular, given China’s distinct feature of the domestic economy and its socio-political structure, the results of introducing a hostile takeover system might not align with common anticipations that scholars and policymakers in China and elsewhere broadly share. In greater detail, this paper highlights the significant market imperfections in the Chinese economy, stemming from information asymmetry, imperfect product markets, and capital-market inefficiency. These market imperfections suggest that an active hostile takeover regime might not function effectively in China, as its disciplinary mechanism operates successfully in other advanced countries. Additionally, this paper underscores that due to China’s distinctive features—including its state-owned corporate landscape, the dominance of controlling shareholders in private corporations’ ownership structures, and its unique brand of socialism—the introduction of an active takeover regime could produce unintended consequences in the Chinese economy. Overall, challenging the prevailing perspective, I posit that within the Chinese hostile takeover framework, corporate governance is not as influential as one might assume.

This paper develops an SOE (small open economy) dynamic general equilibrium model to study the impact of climate change on the current account. By calibrating the model to Chinese economy, we find the following results. First, the current account-output ratio improves in the first decade following an increase in global temperature caused by climate change. It then deteriorates in the following next three decades. Second, the overall current account-output ratio dynamics in response to climate change is neither affected by the types and stringency of climate policies, nor by the levels and growth rates of temperature increases. Third, the impact of an increase in temperature from 1.28 ℃ to 1.5 ℃ relative to the pre-industrial periods (1850-1900) on the current account-output ratio is equivalent to that of an approximate 0.14% permanent decline in TFP. Finally, although the current account-output ratio is likely to deteriorate in the first year when temperature increases instantly, it might not be true if the coefficient of relative risk aversion, or interest rate premium is larger, or debt sensitivity to interest rate is smaller.

Many studies suggest a positive and monotonic relationship between technological progress and wage income inequality since 1980s for industrialized economies. We examine this topic in the context of the Chinese economy where new technologies like automation, AI and digitalization have witnessed worldís most rapid growth in the last decade. Surprsingly, we Önd an inverted U-Shaped relationship - a "Digital Kuznets Curve", using a panel dataset constructed in line with the newly published "2021 Categorization of Core Industries of Digital Economy". We then set out a task-based growth model with heterogenous human capital and occupational choice, and show that this hump-shaped relationship can emerge either by introducing an erosion e§ect of digitalization on worker ability that increasingly counterveils the skill-biasing e§ect, or by directly adding a dynamic learning cost that captures the externality of digitalization. Our study contributes to the understanding of the nature of digitalization in re-shaping labor market structure.

The finance–growth nexus has been a central question in understanding the unprecedented success of the Chinese economy. With unique data on all the registered firms in China, we build extensive ownership networks, reflecting firm-to-firm equity investment relationships, and show that thesenetworks have been expanding rapidly since the 2000s, with more than five million firms in at least one network by 2017. Entering a network and increasing network centrality, both globally and locally, are associated with higher firm growth. Such positive network effects tend to be more pronounced for high productivity and privately owned firms. The RMB 4 trillion stimulus, mostly in the form of newly issued bank loans and launched by the Chinese government in November 2008 in response to the global financial crisis, partially ‘crowded out’ the positive network effects. Our analysis suggests that equity ownership networks and bank credit tend to act as substitutes for state-owned enterprises, but as complements for privately owned firms in promoting growth.

Developing countries are characterized by frictions that impede the mobility of workers across occupations and space. We disentangle the role of insecure property rights from other labor mobility frictions for the reallocation of labor from agriculture to non-agriculture and from rural to urban areas. We combine rich household and individual-level panel data from China and an equilibrium quantitative framework that features the sorting of workers across locations and occupations. We explicitly model the farming household and the endogenous decisions of who operates the family farm and who potentially migrates, capturing an additional channel of selection within the household. We find that land insecurity has substantial negative effects on agricultural productivity and structural change, raising the share of households operating farms by almost 30 percentage points and depressing agricultural productivity by more than 10 percent. Quantitatively, land insecurity is as important as all other labor mobility frictions. We measure a sharp reduction in overall labor mobility barriers over 2004-2018 in the Chinese economy, all of which can be accounted for by improved land security, consistent with reforms covering rural land in China during the period.

数字支付技术能像现金和国债那样，产生流动性溢价吗？对此，我们利用全球最大的数字支付平台（支付宝）进行估算。我们利用了以下事实：不同的货币市场基金进入该平台（因此可被用户持有和交易）的时间有先后。我们发现，一旦基金能被用于交易，它的规模平均增长了42倍。在此基础上，利用一个把基金视为不完全替代品的模型，数字支付技术的流动性溢价为年均1.0%-1.7%。

Working with unique data on land values in 35 major Chinese markets and a panel of firms outside the real estate industry, we estimate standard investment equations that yield no evidence of a collateral channel effect. This is markedly different from previous work on the United States and Japan which finds economically large impacts. One reason for this appears to be that some of the most dominant firms in China are state-owned enterprises (SOEs) which are unconstrained in the sense that they do not need to rely on rising underlying property collateral values to obtain all the financing necessary to carry out their desired investment programs. However, we also find no collateral channel effect for non-SOEs when we perform our analysis on disaggregated sets of firms. Norms and regulation in the Chinese capital markets and banking sector can account for why there is no collateral channel effect operating among these firms. We caution that our results do not mean that there will be no negative fallout from a potential real estate bust on the Chinese economy. There are good reasons to believe there would be, just not through a collateral channel effect.

Previous studies have typically found a negative relation between pyramidal ownership and firm value, and have interpreted it as supporting evidence of the incentive problems created by pyramiding. Those studies, however, do not adequately control for the endogeneity of ownership to factors that also affect firm performance, leaving the agency problem indistinguishable from the unfavorable fundamental shock. Using a unique sample of privately owned listed enterprises in China, this paper examines the effect of pyramidal ownership on returns in response to the announcement of the Share Split Reform in China. This reform triggered zero fundamental shocks but resurrected entrepreneurial incentives in proportion to the separation of ownership and control. Estimates of agency cost of pyramidal ownership are significant and material, and are robust against a range of alternative hypotheses. Moreover, institutional investors appear to appreciate the reform more when a firm’s pyramidal ownership is less separated. The findings suggest that, despite the endogenous determinant of ownership choice, agency theory alone successfully explains the pyramidal discount.

We document the market response to an unexpected announcement of proposed sales of government-owned shares in China. In contrast to the “privatization premium” found in earlier work, we find a negative effect of government ownership on returns at the announcement date and a symmetric positive effect in response to the announced cancellation of the government sell-off. We argue that this results from the absence of a Chinese political transition to accompany economic reforms, so that the positive effects on profits of political ties through government ownership outweigh the potential efficiency costs of government shareholdings. Companies with former government officials in management have positive abnormal returns, suggesting that personal ties can substitute for the benefits of government ownership. In both cases, we may rule out explanations based on a supply effect of the share sales. We further find that the “privatization discount” is higher for firms located in Special Economic Zones, where local government discretionary authority is highest, And that companies with relatively high welfare payments to employees, which presumably would fall with privatization, benefit disproportionately from the privatization announcement.

As the launch of the China’s first stock index futures (SIF) approaches with no exact date for its eventual introduction. The Chinese stock market has increased dramatically due to this expectation recently, especially the futures contracts related stocks have raised significantly which are good examples of this influence. As the stock index futures is a new financial product, Chinese investors cannot help wondering whether the launch of the stock index future will have a positive or negative impact upon the underlying stock market. On the other hand, the new instruments which, will be followed by the introduction of other derivatives, will require broker-dealers to upgrade their systems and invest in new technology. Therefore, it has become pertinent to investigate the opportunities and challenges this eagerly awaited derivative instrument has to offer to fund managers in the booming Chinese economy.