International debt financing is important for the development of emerging economies, as it allows firms from emerging markets (EMs) to have access to greater liquidity, a wider investor base, and more effective laws and regulations. However, the financial crisis in the late 1990s, coupled with recent rapid growth in corporate leverage in emerging markets, have forced policy makers to re-evaluate the risk of offshore financing and its role in EMs’ development. In this paper, we investigate the bonding/signaling effect of offshore financing to those firms in subsequent domestic market financing through the improvement of information disclosure and creditability. With a comprehensive database covering bond issuances by Chinese firms both in domestic and offshore markets over the period of 2010 to 2015, we find that: 1) The offshore bond issuance has a positive bonding/signaling effect on firm’s subsequent debt-raising in the domestic market in terms of longer maturity of corporate issuance and lower funding cost. 2) If the offshore issuance occurs in a stricter jurisdiction providing more effective investor protection and stringent disclosure, or with an international investment-grade rating, it will have a positive influence on firm’s subsequent debt-raising domestically. 3) Offshore debt financing improves the long-term firm performance, especially for financially-constrained companies. Our study presents new evidence for the role of the offshore market in promoting both the domestic institutional environment as well as firm growth, and provides policy implications for developing a broad offshore corporate bond market in emerging economies.

We compare the differences between the Chinese and U.S. bond risk premia. We find that the expectations hypothesis fails in the two bond markets: We identify the Chinese and U.S. bond time-varying risk premia by forecasting the corresponding excess return of n-year bond using the n-year forward rate and n-year forward spread, respectively. To focus on the systematical forecasts, we then combine the forward rates at different maturities as the return-forecast factors. Unlike the one-factor model introduced by Cochrane and Piazzesi (2005), a two-factor model including level- and slope-based factors explains significantly Chinese bond premia with R2 up to 68%. More importantly, the slope-based factor sharply improves the performance of test. The results are robust with respect to measurement errors, multicollinearity and small-sample biases. Out-of-sample tests show that, in recent years, the U.S. bond market changes drastically, and tends to be like the Chinese market. We use the empirical results to calibrate the parameters of affine model, and find that the differences of bond premia between the two markets are caused by the differences of dynamics of state variables and risk attitude of investor.

仅依赖法律等正式制度无法确保金融或经济的长期发展，信任等非正式制度在其中的作用不可或缺。鉴于此，本文研究信任这一非正式制度在债券市场中的价值。研究发现，信任不仅有助于提高债券信用评级，还有助于降低债券信用利差，该结论在考虑了内生性问题后依然成立。同时，利用最高法“失信被执行人”数据还发现，失信及失信程度的增加会降低债券信用评级，提高债券信用利差。进一步地，路径分析法的结果还发现，信任不仅会直接影响债券评级和定价，还会通过提升公司财务报告质量间接地发挥作用，即不仅投资者主观上更愿相信高信任度地区的企业，客观上这些企业也的确更为可信。本文还发现，信任对债券评级和定价的积极作用在国有企业、金融业更发达地区的企业以及发债次数更多的企业中更为显著，即投资者与发行人之间的重复博弈机会越多，信任的价值也越大。研究表明，通过缓解债券发行人与债券投资者之间的信息不对称问题，信任可以被资本化为财富。本文研究结论提醒政府在推动企业融资成本下降时，应着重加强对信任这种地区乃至国家公共品的培育和建设。

This paper studies the information interpretation of return synchronicity in the context of corporate bond market and examines the specific event intensity rationale that underlie the relationship between bond synchronicity and bond level information environment. We find that investment-grade bonds, bonds without rating splits, and bonds issued by public firms present higher levels of bond return synchronicity. These results hold after we control for bond level characteristics, industry and year fixed effects. By using credit rating change announcements as a unique measure of bond specific event intensity, we corroborate that security under better information environment has lower likelihood of specific event surprise occurrence, and thus is more synchronous with the market. We also verify that once rating change announcements did take place, the corresponding return synchronicity would be lower. Such impact would be more pronounced when the rating is downgraded compared with upgrade rating changes.

Using a proprietary dataset from 2016 to 2019, we find that order flows from foreign investors, facilitated by regulatory liberalization through several channels, present strong predictive power for future stock returns in the Chinese market. Most surprisingly, foreign investors possess the ability to process local firm-level public news, whereas their informational advantages regarding global market-level information are relatively muted. Further, the predictive power of foreign investors is particularly strong on large price movement days when the implications of firm-level information is likely most pronounced. Finally, regulatory reforms that generally relax investment access requirements further improve foreign investors’ predictive power

We examine how sell-side equity analysts strategically disclose information of differing quality to the public versus the buy-side mutual fund managers to whom they are connected. We consider cases in which analysts recommend that the public buys a stock, but some fund managers sell it. We measure favor trading using mutual fund managers’ votes for analysts in a Chinese “star analyst” competition. We find that managers are more likely to vote for analysts who exhibit more “say-buy/whisper-sell” behavior with these managers. This suggests that analysts introduce noise in their public recommendations, making the more-precise information provided to their private clients more valuable. Analysts’ say-buy/whisper-sell behavior results in information asymmetry: the positive-recommendation stocks bought by the managers who vote for the analysts outperform the stocks sold by these managers after the recommendation dates. Our findings help explain several puzzles regarding analysts’ public recommendations.

We document a novel platform effect caused by the emergence of FinTech platforms in financial intermediation. In China, platform distributions of mutual funds emerged in 2012 and grew quickly into a formidable presence. Utilizing the staggered entrance of funds onto platforms, we find a marked increase of performance-chasing, driven by the centralized information flow unique to FinTech platforms. This pattern is further confirmed using proprietary data from a top platform. Examining the platform impact on fund managers, we find that, incentivized by the amplified performance-chasing, fund managers increase risk taking to enhance their probability of getting onto the top ranking.

风险投资在最终退出阶段取得的收益以及对被投企业的影响长期以来是国内外学术界研究的空白点。通过对2007年-2017年A股新上市公司公开市场交易中大股东的减持收益进行测算，并对风险投资最终退出对被投资公司的影响进行实证分析，本文发现：风险投资减持可以获得比其他大股东减持更大的上市日至减持日的购买并持有异常收益率（BHAR）和减持期累计异常收益率（CAR），风险投资的实力越强，风险投资减持的收益越大；在高铁直通和风投投资人出任董事的情况下，风险投资可以获取更大的减持收益，形成了“监管逆转”现象；通过信息操纵，盈余管理和财务违规等途径，风险投资获取了更大的减持收益，实现了风险投资对被投公司的“价值剥削”，造成了风投退出后被投公司的业绩下滑。本文对于风险投资最终减持阶段的行为刻画具有重要贡献，对于全面认识风险投资最终退出的影响具有现实意义，对于解读中国发展现实丰富国外经典金融理论具有重要启示。

Exploiting staggered COVID-19 lockdowns and reopening across different regions in China, we study how lockdowns affect the investment decisions of venture capital (VC) investors and whether such changes are temporary or enduring in the post-pandemic era. Contrary to the conventional wisdom that lockdowns exacerbate the “tyranny of distance” (i.e., VCs avoid investing in remote ventures), our findings suggest the “death of distance”: VCs invest in remoter ventures during a lockdown and such effects persist even after the economy reopens. Such lockdown effects are more pronounced when there is better internet infrastructure, when the level of information asymmetry between VCs and entrepreneurs is lower, and when VCs are more experienced. The lockdown effects can be explained by the advancement and adoption of remote communication technology as a response to the social distancing requirements. As geographic boundaries of VC investment are shattered by remote communication technology, local competition among VCs has been intensified, the monopoly power of VCs has been curtailed, and the regional inequality of entrepreneurial access to VC financing has been mitigated.

We examine the impact of mixed ownership on the performance of venture capital (VC) firms in China. We use successful/unsuccessful exits from VC-financed entrepreneurial companies and number of patent applications by VC-financed companies as proxies for VC firms’ performance. Consistent with existing research on the inferior performance of SOEs relative to non-SOEs, we find that on average government-controlled VC firms (GVCs) underperform domestic private investors-controlled VC firms (PVCs). More importantly, we find that introducing minority private investors (i.e., mixed ownership) helps improve the performance of GVCs. However, we find no evidence that introducing minority government investors (i.e., mixed ownership) helps improve the performance of PVCs. Our results provide relevant information to the ongoing debate on the role of the government investors and private investors in developing the VC industry in emerging markets.