This paper decomposes consumption risk sharing among provinces in China over the 1980â2007 period. We find that 9.4% of the shocks to gross provincial product are smoothed by the interprovincial fiscal transfer system. This system also cushions a relatively large fraction of the...

Firm diversification across unrelated businesses is prevalent in many emerging economies, in contrast to the practices in developed economies. A fundamental difference between these two types of economies concerns with the existence of sound economic institutions including in particular the...

The existing studies on vertical integration focus on factors at the transaction parties’ level, such as asset specificity and contractual incompleteness. What is overlooked is the quality of the underlying institutions, in particular, contracting institutions. In this paper, using a World...

In this paper, we follow the theoretical framework proposed by Djankov et al. (2003) to investigate the role of the state in resolving business disputes and its impact on enterprise performance. Using a survey of private enterprises in China, we first construct an index to quantify the power of...

This paper examines the impacts of economic institutions, including property rights protection and contract enforcement, on the location choice of foreign direct investment. From a data set of 6288 US multinationals investing in various China's regions for the period of 1993-2001, it is found...