Through a unique database on daily activities of municipal party secretaries, we find that they spend a significant part of their work time on political and propaganda activities, including organizing various meetings to promote the central government's spirit ideology. We find that officials engage in these behaviors more often before a government reshuffle, plausibly tend to leave a loyal and obedient impression on the superior government and increase their promotion probability. This is on contrary to economic behaviors, which are more common in the early stages of officials' terms, possibly because investment projects require time. This is more evident among younger, well-educated politicians due to age-based promotion restrictions. Our study may shed light on how the Communist Party of China balancing economic development and political loyalty when selecting officials.

We examine how hometown ties among local politicians affect capital allocation in China. We use a difference-in-differences design that relies on the exogenous replacements of city officials. Our results indicate that hometown ties between city party secretaries increase city-dyad investment by 10% and firm registrations by 1%. These effects are larger between distant cities and for the investment of small and private firms. Comparing the effects before and after the Chinese anti-corruption campaign, we provide nuanced evidence showing that, although hometown ties may entice the rent-seeking activities of officials, such activities may promote economic growth.

Using a new case-level dataset we document a set of stylized facts on bankruptcy in China and study how the staggered introduction of specialized courts across Chi- nese cities affected insolvency resolution and the local economy. For identification, we compare bankruptcy cases handled by specialized versus traditional civil courts within the same city and filed in the same year. We find that specialized courts decrease case duration by 36% relative to traditional civil courts. We provide evi- dence consistent with court specialization increasing efficiency via selection of better trained judges and higher judicial independence from local politicians. We docu- ment that cities introducing specialized courts experience a relative reallocation of employment out of zombie firms-intensive sectors, as well as faster firm entry and a larger increase in average capital productivity.