Connect to trade

Valuation effect of capital account liberalization: Evidence from the Chinese stock market

“…A strong institutional environment with creditors' rights, contract enforcement, and satisfactory accounting standards is important for countries benefiting from financial liberalization (Eichengreen et al, 2011). In addition to the international institutional environment, the quality of domestic institutions is particularly important for firms to gain benefits from CAL, especially in economies with low-quality institutions (Ding et al, 2018;Ju and Wei, 2011). One possible reason is that a distorted domestic institution can lead to twin agency problems in which controlling shareholders can use their power to expropriate outside investors for private benefits, and government officials may use their power to improve their personal welfare at the expense of the shareholders (Wei, 2018).…”

“…The quality of domestic institutions is particularly important for firms to gain benefits from CAL, especially in economies with low-quality institutions (Ding et al, 2018;Ju and Wei, 2011). The twin agency problems (Stultz 2005) may nudge the composition of cross-border capital inflows to consist of less foreign direct investments or shorten the maturity of external debts (Wei, 2018).…”

Institutional Quality and Sustainable Development of Industries’ Exports: Evidence from China

“…The development status of different industries shows adaptive adjustments to the external institutional environment; meanwhile, the institutional environment would exert differentiated impacts on different industries. Referring to Levchenko [2], Chor [34], and Ding et al [12], this paper investigates industry heterogeneity from the following four dimensions, namely, financial dependence degree, product technology complexity, R&D intensity, and the concentration of immediate inputs. It should be suggested that industries with heterogeneity in degrees of financial dependence or product technology complexity are much more easily influenced by the financial development level, while industries with heterogeneity in R&D intensity or in the concentration of immediate inputs are much more easily influenced by the legal system efficiency.…”

“…In international markets with rising uncertainty, such as the increasingly fierce Sino-US trade frictions, export volumes of the international market show a sharp decline, and the sustainable development of exports in emerging countries has been confronted with severe challenges. Meanwhile, the role of domestic institutional quality in affecting the sustainable development of exports in emerging countries should be paid more attention, since a recent cluster of work has confirmed institutional sources of comparative advantage, such as contract enforcement [1][2][3], financial development [4][5][6], legal environment [7,8], the flexibility of labor market [9], and the informal institution [10][11][12]. Moreover, for an emerging country, the formation of new domestic institutional comparative advantages also helps to address the external uncertainty of international markets by constantly enhancing its economic competitiveness.…”

“…Beverelli et al [27] identify the impact of country-specific institutions on international trade by using the structural gravity framework to address the prominent issue of endogenous institutions, and they conclude that a stronger institution promotes trade. Ding et al [12] observe that the Chinese-style institution has a key foundation in that governments at different levels affect resource flows to firms that are connected to them. After inspecting the relation between this institutional feature and firm exports, they conclude that firms with political connections could achieve comparative advantages in contract-intensive and financially-dependent industries, while political connections also exert a negative effect on firm exports, due to the problem of managerial inefficiency.…”