This paper studies the effect of capital account liberalization policies on the price discovery of cross-listings in Chinese stocks. We construct a non-linear causality framework that decomposes short- and long-run dimensions of price leadership. Our analysis shows that capital account...

Previous literature finds that anomalies are at least as prevalent in developed markets as in emerging markets; namely, the global anomaly puzzle. We show that while market development and information diffusion are linearly related, information diffusion has a nonlinear impact on anomalies. This...

We use brokerage account records to study trading during the Chinese put warrants bubble and find evidence consistent with extrapolative theories of speculative asset price bubbles. We identify the event that started the bubble and show that investors engaged in a form of feedback trading based...

Expectation errors, generally defined, have been used by previous studies to show why investors pay too much for growth. In contrast, our study analyses what actual mistakes investors have made and how they could have been avoided. We show that investors ignore the negative impact of growth on...

What determines the dynamic patterns of local public investment in authoritarian countries? We analyze a unique dataset that matches public-private partnership (PPP) projects with Chinese mayors who served from 2010 to 2017, and document a robust tenure effect in public investment. Mayors...

We analyze whether four market-based measures of the global systemic importance of financial institutions offer early warning signals during three financial crises. The tests based on the 2007/2008 crisis show that only one measure (∆CoVaR) consistently adds predictive power to conventional...

Electric vehicle has been taken as the key technology in road transportation sector to achieve carbon neutrality. However, considering China’s critical metal resource endowment, the impacts of potential metal supply shortage on the EV industry development goal need to be considered. Therefore,...

We examine how information risk and transaction costs influence the initial and subsequent market reaction to earnings news. We find that the initial market reaction is higher per unit of earnings surprise for higher information risk firms (information content effect). Furthermore, it is...

China’s high household savings rate has attracted great academic interest but remains a puzzle. Potential explanations include demographic, policy, and financial causes. Yet a lack of reliable microlevel data on household finances makes it difficult to assess the relative importance of each...

This paper reveals an informal eldercare arrangement in China by focusing on how the value of housing owned by aging parents affects the adult children’s caregiving behavior. Using three waves of comprehensive national survey data from 2011 to 2015 around China, we find that when the potential...