Based on the evidence after the outbreak of SARS in 2003, which is caused by the same family of viruses as COVID-19, we show that due to the “probability weighting” phenomenon, i.e., decision makers tend to overweight the probability of extreme tail events, the epidemic experience induces...

A recent reform in China, the Shanghai-Hong Kong Stock Connect program, made a subset of Chinese stocks investable for foreign investors, thus partially opening China's stock market. We use this reform to examine the quantity and quality effects of stock market liberalization on corporate...

To stabilize their financial markets, many governments implement a number of rescue programs. Direct purchase intervention—rarely observed in the past due to the concern of moral hazard problems and aversion to government ownership—has been commonly considered a potential way to stabilize...