In this paper we consider emergency government bailouts. We show that it is welfare‐enhancing to bail out failing firms that are facing a sudden negative demand shock and would otherwise go bankrupt, when there are sufficiently large fixed production costs and knock‐on effects (the negative...

This paper examines the long-term impact of natural disasters on household portfoliochoices. In particular, we study this issue with the Wen Chuan Earthquake thatoccurred in China in 2008 as an exogenous natural disaster event. Previous literaturesfind that natural disasters can cause affected...

To what extent does trade liberalization affect the spatial expansion of the banking sector? This paper empirically examines the impact of tariff reductions for exporters on the spatial pattern of bank branching using geo-referenced information on branches of China’s state-owned and...

Using China’s accession to WTO in 2001 as an episode for trade liberalization, this paper empirically investigates whether export expansions affect firms’ markup adjustments through local production networks. Following Helm (2020), we construct indirect local export exposure measures to...