Using a large firm-level panel dataset from the Chinese National Bureau of Statistics, we examine the effect of financial distortions on FDI inflows in China's labor-intensive industries. Following Whited and Wu (2006), we estimate the investment Euler equation and construct a financing...

Using a unique census dataset on all industrial firms (with more than 5 million yuan in sales), we document a phenomenon of missing entrepreneurship in Shanghai. Entrepreneurship is defined as private, new entrants in our paper. Specifically, in terms of business density, the size of employment...

This paper is the fourth chapter of a forthcoming book, Capitalism with Chinese Characteristics (New York: Cambridge University Press, July 2008). The book is a narrative account of the evolution of capitalism in China in the last three decades. (The year 2008 marks the 30th anniversary of...

Using a comprehensive sample of all FDI firms in China, we explore the question whether ethnicity enhances operating performance. While there has been a sizable theoretical literature studying ethnicity and foreign investments, the prediction of the impact of ethnicity on firm profitability is...

This paper investigates the worldwide phenomenon of "political divergence'' between the East and the West. During the 8th to 10th centuries, Western Europe and China both achieved political stability, but they did so through dramatically different routes. Western Europe developed parliamentary...