Abstract:conference (2017) for comments and suggestions that significantly improved the paper. Ding acknowledges financial support from the National Natural Science Foundation of China (no. 71703086). Fang acknowledges the financial support from the China Research Engagement Fund of the University of Pennsylvania. We are responsible for all remaining errors. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are … Show more
“…In this subsection, we further explore the role of local institutions in determining the impact of the CAL policy across firms. We create a measure for quality of local institutions using the province-level marketization index, which is maintained by the NERI (e.g., Fan et al, 2011;Ding et al, 2020). This index is constructed using enterprise and household survey statistics and covers five fields with 23 basic indicators.…”
This paper examines the valuation effect of capital account liberalization. Using an event study approach and the policy announcement for RMB Qualified Foreign Institutional Investors (short for RQFII) as the event date, we find that overall, the stock market responded positively to the capital account liberalization announcement. In addition, we provide some heterogeneity that firms with more stringent financing constraints earn higher returns than their counterparts. Finally, existing local institutions play an important role in determining announcement returns.
“…In this subsection, we further explore the role of local institutions in determining the impact of the CAL policy across firms. We create a measure for quality of local institutions using the province-level marketization index, which is maintained by the NERI (e.g., Fan et al, 2011;Ding et al, 2020). This index is constructed using enterprise and household survey statistics and covers five fields with 23 basic indicators.…”
This paper examines the valuation effect of capital account liberalization. Using an event study approach and the policy announcement for RMB Qualified Foreign Institutional Investors (short for RQFII) as the event date, we find that overall, the stock market responded positively to the capital account liberalization announcement. In addition, we provide some heterogeneity that firms with more stringent financing constraints earn higher returns than their counterparts. Finally, existing local institutions play an important role in determining announcement returns.
“…It is thus a well-accepted anti-corruption policy shock in the related literature. (Ding, et al, 2017) The Policy addressed some detailed and specific refrains to prevent transfers of hidden interests or other suspicious behaviours. It is widely considered as first official policy relating to the anti-corruption agenda.…”
Section: Background and Significance Of The Anti-corruption Campaign mentioning
confidence: 99%
“…The announcement time of the inspection dates varied from provinces. Detailed information of announcement dates and province involved is in summarized in the literature such as Ding, et al (2017) and Bu, et al (2019). The relevant information is reproduced in Appendix III.…”
Section: Multiple Rounds Of Central Inspection Team Campaigns (Citc) mentioning
Despite a surging literature in investigating different impacts of corruption and/or anticorruption from firms' perspective, it is still unclear whether and how corruption and/or anti-corruption affect households' borrowing behaviour. In this paper, we focus on a Chinese online peer-to-peer lending market and analyse the impact of the recent China's anti-corruption campaign on households' borrowing costs. We employ a Difference-inDifferences (DID) estimation strategy and investigate three exogenous shocks regarding the movement: 1) the 2012 Eight Point Policy announcement; 2) multiple rounds of the Central Inspection Team Campaigns during 2013 and 2014; 3) and the anti-corruption rules for military-related personnel in early 2015. Our results show that equilibrium interest rates of borrowers pertaining to Non-SOEs dropped significantly comparing to that of SOEs and/or government agencies in the wake of the first two events. Borrowers affiliating with military-related institutions were also worsened after the military specific anti-corruption campaign. Finally, we examine the two possible economic channels. Suggestive evidences show that both a rise of interest risk premium for SOEs borrowers and a better outlook of Non-SOEs after the anticorruption reform could account for the observed favour of the borrowing costs towards Non-SOEs borrowers. These findings are consistent with previous studies regarding the effects of anti-corruptions from firms' aspects such as Lin et al., (2016) and Griffin et al., (2016). This study also complements the P2P literature by demonstrating the importance of online borrowers' occupations / job affiliations.
“…Granted, a lack of corruption could very well give rise to market reforms and increased economic freedom instead of the other way around. However, recent research on China's anti‐corruption reforms (Ding et al ; Li et al ) suggests that markets may actually pave the way for anti‐corruption reforms. Summarising the implications of this research, Lin et al () explain: Reducing corruption creates more value where market reforms are already more fully implemented.…”
Section: Economic Freedom Vs Social Trustmentioning
Numerous empirical studies suggest that market exchange helps (a) create the conditions for liberal values to flourish, (b) refine our sense of fairness, (c) promote cooperation with those who are different from ourselves, (d) develop networks of mutual trust and trustworthiness, (e) generate tolerance and respect towards others, and (f) undermine hostility and conflict in favour of peace. This article reviews this empirical evidence and argues that markets make us better people, morally speaking.
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