Publications
2022 |
Liu, X; Tang, HW; Wang, Z; Wei, S Currency Carry Trade by Trucks: The Curious Case of China’s Massive Imports from Itself Journal Article Review of Finance, 2022. @article{HKUHUB_10722_311719, title = {Currency Carry Trade by Trucks: The Curious Case of China’s Massive Imports from Itself}, author = {X Liu and HW Tang and Z Wang and S Wei}, url = {http://hdl.handle.net/10722/311719}, doi = {10.1093/rof/rfac015}, year = {2022}, date = {2022-01-01}, journal = {Review of Finance}, abstract = {With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong’s governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.”}, keywords = {}, pubstate = {published}, tppubtype = {article} } With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong’s governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.” |
2021 |
Park, SG; Wan, KM; Suen, WC Call Auction Design and Closing Price Manipulation: Evidence from the Hong Kong Stock Exchange Journal Article Journal of Financial Markets, 2021. @article{HKUHUB_10722_309302b, title = {Call Auction Design and Closing Price Manipulation: Evidence from the Hong Kong Stock Exchange}, author = {SG Park and KM Wan and WC Suen}, url = {http://hdl.handle.net/10722/309302}, doi = {10.1016/j.finmar.2021.100700}, year = {2021}, date = {2021-01-01}, journal = {Journal of Financial Markets}, abstract = {The Hong Kong Stock Exchange adopted a standard closing call auction mechanism in 2008 but suspended its operation ten months later due to suspicion of widespread price manipulation. The Exchange revamped the mechanism with manipulation-deterrence enhancements and relaunched it in 2016. We exploit this unique setting to examine the effect of call auction design on closing price manipulation. Our results indicate that the standard call auction mechanism is vulnerable to closing price manipulation. Under this mechanism, overnight price reversal is more pronounced on days when derivatives expire and on days when large orders were submitted just before the market close.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The Hong Kong Stock Exchange adopted a standard closing call auction mechanism in 2008 but suspended its operation ten months later due to suspicion of widespread price manipulation. The Exchange revamped the mechanism with manipulation-deterrence enhancements and relaunched it in 2016. We exploit this unique setting to examine the effect of call auction design on closing price manipulation. Our results indicate that the standard call auction mechanism is vulnerable to closing price manipulation. Under this mechanism, overnight price reversal is more pronounced on days when derivatives expire and on days when large orders were submitted just before the market close. |
Park, SG; Wan, KM; Suen, WC Call Auction Design and Closing Price Manipulation: Evidence from the Hong Kong Stock Exchange Journal Article Journal of Financial Markets, 2021. @article{HKUHUB_10722_309302, title = {Call Auction Design and Closing Price Manipulation: Evidence from the Hong Kong Stock Exchange}, author = {SG Park and KM Wan and WC Suen}, url = {http://hdl.handle.net/10722/309302}, doi = {10.1016/j.finmar.2021.100700}, year = {2021}, date = {2021-01-01}, journal = {Journal of Financial Markets}, abstract = {The Hong Kong Stock Exchange adopted a standard closing call auction mechanism in 2008 but suspended its operation ten months later due to suspicion of widespread price manipulation. The Exchange revamped the mechanism with manipulation-deterrence enhancements and relaunched it in 2016. We exploit this unique setting to examine the effect of call auction design on closing price manipulation. Our results indicate that the standard call auction mechanism is vulnerable to closing price manipulation. Under this mechanism, overnight price reversal is more pronounced on days when derivatives expire and on days when large orders were submitted just before the market close.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The Hong Kong Stock Exchange adopted a standard closing call auction mechanism in 2008 but suspended its operation ten months later due to suspicion of widespread price manipulation. The Exchange revamped the mechanism with manipulation-deterrence enhancements and relaunched it in 2016. We exploit this unique setting to examine the effect of call auction design on closing price manipulation. Our results indicate that the standard call auction mechanism is vulnerable to closing price manipulation. Under this mechanism, overnight price reversal is more pronounced on days when derivatives expire and on days when large orders were submitted just before the market close. |
2020 |
Chen, Z Comparative performance of different civilizations in the history of the Maritime Silk Road Conference 2020. @conference{HKUHUB_10722_310732, title = {Comparative performance of different civilizations in the history of the Maritime Silk Road}, author = {Z Chen}, url = {http://hdl.handle.net/10722/310732}, year = {2020}, date = {2020-01-01}, journal = {量化历史系列在线讲座第六讲}, abstract = {今期的量化歷史網上講座中，借助現代經濟學，解讀各文明在資源整合和風險分攤能力上的不同特質與表現，尤其每種文明是如何解決逆向選擇、「搭便車」現象和道德風險問題，以鞏固其商幫信用網絡的可靠度、降低跨期交易成本。陳志武教授會於講座中為大家一一解構不同文明體系的優劣成敗：哪個文明體系能更好解決跨期信用與風險分攤問題，那個文明就能在海上貿易中制勝。海上絲路歷史所折射的不同文明之特質，不僅加深我們對今天世界格局背後來歷的認知，也有利於我們比較及研究制勝技巧，為把握未來作更好準備。}, keywords = {}, pubstate = {published}, tppubtype = {conference} } 今期的量化歷史網上講座中，借助現代經濟學，解讀各文明在資源整合和風險分攤能力上的不同特質與表現，尤其每種文明是如何解決逆向選擇、「搭便車」現象和道德風險問題，以鞏固其商幫信用網絡的可靠度、降低跨期交易成本。陳志武教授會於講座中為大家一一解構不同文明體系的優劣成敗：哪個文明體系能更好解決跨期信用與風險分攤問題，那個文明就能在海上貿易中制勝。海上絲路歷史所折射的不同文明之特質，不僅加深我們對今天世界格局背後來歷的認知，也有利於我們比較及研究制勝技巧，為把握未來作更好準備。 |
Chen, Z 2020. @conference{HKUHUB_10722_310733, title = {Comparative performance of different civilizations in the history of the Maritime Silk Road and Confucian virtue ethics}, author = {Z Chen}, url = {http://hdl.handle.net/10722/310733}, year = {2020}, date = {2020-01-01}, journal = {Webinar, SUS Business School, Southern University of Science and Technology}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
Lee, FX; Suen, W Credibility of Crime Allegations Journal Article American Economic Journal: Microeconomics, 2020, ISSN: 1945-7669. @article{HKUHUB_10722_281200, title = {Credibility of Crime Allegations}, author = {FX Lee and W Suen}, url = {http://hdl.handle.net/10722/281200}, doi = {10.1257/mic.20180231}, issn = {1945-7669}, year = {2020}, date = {2020-01-01}, journal = {American Economic Journal: Microeconomics}, abstract = {The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports. |
Lee, FX; Suen, W Credibility of Crime Allegations Journal Article American Economic Journal: Microeconomics, 2020, ISSN: 1945-7669. @article{HKUHUB_10722_281200c, title = {Credibility of Crime Allegations}, author = {FX Lee and W Suen}, url = {http://hdl.handle.net/10722/281200}, doi = {10.1257/mic.20180231}, issn = {1945-7669}, year = {2020}, date = {2020-01-01}, journal = {American Economic Journal: Microeconomics}, abstract = {The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports. |
Lee, FX; Suen, W Credibility of Crime Allegations Journal Article American Economic Journal: Microeconomics, 2020, ISSN: 1945-7669. @article{HKUHUB_10722_281200b, title = {Credibility of Crime Allegations}, author = {FX Lee and W Suen}, url = {http://hdl.handle.net/10722/281200}, doi = {10.1257/mic.20180231}, issn = {1945-7669}, year = {2020}, date = {2020-01-01}, journal = {American Economic Journal: Microeconomics}, abstract = {The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The lack of hard evidence in allegations about sexual misconduct makes it difficult to separate true allegations from false ones. We provide a model in which victims and potential libelers face the same costs and benefits from making an allegation, but the tendency for perpetrators of sexual misconduct to engage in repeat offenses allows semiseparation to occur, which lends credibility to such allegations. Our model also explains why reports about sexual misconduct are often delayed, and why the public rationally assigns less credibility to these delayed reports. |
2019 |
Chen, Z Confucianism as an economic institution and its enduring relevance Conference 2019. @conference{HKUHUB_10722_310745, title = {Confucianism as an economic institution and its enduring relevance}, author = {Z Chen}, url = {http://hdl.handle.net/10722/310745}, year = {2019}, date = {2019-01-01}, journal = {第二届 中国制度经济学论坛}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
Chen, Z Digital financial inclusion and its challenges Conference 2019. @conference{HKUHUB_10722_310746, title = {Digital financial inclusion and its challenges}, author = {Z Chen}, url = {http://hdl.handle.net/10722/310746}, year = {2019}, date = {2019-01-01}, journal = {第二届国际金融科技论坛 (SWUFE & CDAR 2019): 金融风险}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
2018 |
Chen, Z China’s financial sector and globalization Conference 2018. @conference{HKUHUB_10722_268774, title = {China’s financial sector and globalization}, author = {Z Chen}, url = {http://hdl.handle.net/10722/268774}, year = {2018}, date = {2018-01-01}, journal = {Caixin Summit Hong Kong}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
Chan, J; Lizzeri, A; Suen, WC; Yariv, L Deliberating Collective Decisions Journal Article The Review of Economic Studies, 2018, ISSN: 0034-6527. @article{HKUHUB_10722_263805b, title = {Deliberating Collective Decisions}, author = {J Chan and A Lizzeri and WC Suen and L Yariv}, url = {http://hdl.handle.net/10722/263805}, doi = {10.1093/restud/rdx028}, issn = {0034-6527}, year = {2018}, date = {2018-01-01}, journal = {The Review of Economic Studies}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
Chan, J; Lizzeri, A; Suen, WC; Yariv, L Deliberating Collective Decisions Journal Article The Review of Economic Studies, 2018, ISSN: 0034-6527. @article{HKUHUB_10722_263805c, title = {Deliberating Collective Decisions}, author = {J Chan and A Lizzeri and WC Suen and L Yariv}, url = {http://hdl.handle.net/10722/263805}, doi = {10.1093/restud/rdx028}, issn = {0034-6527}, year = {2018}, date = {2018-01-01}, journal = {The Review of Economic Studies}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
Chan, J; Lizzeri, A; Suen, W; Yariv, L Deliberating Collective Decisions Journal Article The Review of Economic Studies, 2018, ISSN: 0034-6527. @article{HKUHUB_10722_263805, title = {Deliberating Collective Decisions}, author = {J Chan and A Lizzeri and W Suen and L Yariv}, url = {http://hdl.handle.net/10722/263805}, doi = {10.1093/restud/rdx028}, issn = {0034-6527}, year = {2018}, date = {2018-01-01}, journal = {The Review of Economic Studies}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
2017 |
Chen, Z Challenges for business corporations Conference 2017. @conference{HKUHUB_10722_268775, title = {Challenges for business corporations}, author = {Z Chen}, url = {http://hdl.handle.net/10722/268775}, year = {2017}, date = {2017-01-01}, journal = {The 16th China Entrepreneurs Summit 2017}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
Chen, Z Dealing with a changing environment: consequences of technology and globalization Conference 2017. @conference{HKUHUB_10722_268777, title = {Dealing with a changing environment: consequences of technology and globalization}, author = {Z Chen}, url = {http://hdl.handle.net/10722/268777}, year = {2017}, date = {2017-01-01}, journal = {Integral Conversation Forum, 2017}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
2015 |
Chen, Z; Lin, ZHAN Class Status, Interlinkage, Seasonality in Private Lending Journal Article 清华大学学报：哲学社会科学版 = Journal of Tsinghua University (Philosophy and Social Sciences), 2015, ISSN: 1000-0062. @article{HKUHUB_10722_263445, title = {Class Status, Interlinkage, Seasonality in Private Lending}, author = {Z Chen and ZHAN Lin}, url = {http://hdl.handle.net/10722/263445}, issn = {1000-0062}, year = {2015}, date = {2015-01-01}, journal = {清华大学学报：哲学社会科学版 = Journal of Tsinghua University (Philosophy and Social Sciences)}, abstract = {1930年代49个村庄3 555件借贷交易合约表明,地主阶级的剥削不是高利贷产生的原因。贷方是地主时的借贷交易,相对于贷方不是地主时的交易,利率会更低;地主放贷给他的佃农、雇农、雇工时(互联性交易),利率比其他情况下要低;在特殊季节,即在年关和准备春耕的时候,上述两类借贷交易中,利率都没有比其他时间更高。高利贷的存在不能归因于地主阶级的剥削。这有助于我们更好地理解高利贷的真实成因、近代民间借贷的运行机制和正在进行中的民间金融改革。}, keywords = {}, pubstate = {published}, tppubtype = {article} } 1930年代49个村庄3 555件借贷交易合约表明,地主阶级的剥削不是高利贷产生的原因。贷方是地主时的借贷交易,相对于贷方不是地主时的交易,利率会更低;地主放贷给他的佃农、雇农、雇工时(互联性交易),利率比其他情况下要低;在特殊季节,即在年关和准备春耕的时候,上述两类借贷交易中,利率都没有比其他时间更高。高利贷的存在不能归因于地主阶级的剥削。这有助于我们更好地理解高利贷的真实成因、近代民间借贷的运行机制和正在进行中的民间金融改革。 |
Luo, J; Chen, Z Discounts and Investment Performance of Chinese PIPEs Journal Article Journal of Portfolio Management, 2015, ISSN: 0095-4918. @article{HKUHUB_10722_264713, title = {Discounts and Investment Performance of Chinese PIPEs}, author = {J Luo and Z Chen}, url = {http://hdl.handle.net/10722/264713}, doi = {10.3905/jpm.2015.41.5.041}, issn = {0095-4918}, year = {2015}, date = {2015-01-01}, journal = {Journal of Portfolio Management}, abstract = {The Chinese private investment in public equity (PIPE) market offers a unique window into China’s capital markets and their regulatory environment and culture. Chinese PIPEs share many common features with their counterparts in other countries, such as price discounts relative to their publicly traded sister share prices, lock-ups creating illiquidity and incentive distortions, concentrated positions with a few buyers, and a preferred financing tool for companies without other options. But some characteristics of this market are specific to China. Since the regulatory guidelines were introduced in 2006, PIPEs have become the main and, most of the time, the only available equity financing option for listed companies. PIPE applications with the China Securities Regulatory Commission (CSRC) are often approved within a few months, whereas IPOs and seasoned equity offerings can take a couple of years to approve (if they’re ever approved at all) and are subject to much tougher requirements. In recent years, the IPO option was simply closed most of the time by the CSRC. As a result, PIPE offerings are, on average, more than 35% of the total shares outstanding and can be as high as 90% or more. PIPE deals are distributed across industries, much like the structure of the Chinese economy: PIPE financing is dominated by firms in industries that have experienced the worst capacity overexpansion, with relatively few deals done in industries that have minimal overcapacity issues. The authors analyze determinants of PIPE discounts, post-PIPE financial performance changes, and post-PIPE excess stock returns. They discuss and design optimal investment strategies to take advantage of PIPE offerings in China and backtest the strategies. The authors conclude that on a risk-adjusted basis, Chinese PIPEs present attractive opportunities.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The Chinese private investment in public equity (PIPE) market offers a unique window into China’s capital markets and their regulatory environment and culture. Chinese PIPEs share many common features with their counterparts in other countries, such as price discounts relative to their publicly traded sister share prices, lock-ups creating illiquidity and incentive distortions, concentrated positions with a few buyers, and a preferred financing tool for companies without other options. But some characteristics of this market are specific to China. Since the regulatory guidelines were introduced in 2006, PIPEs have become the main and, most of the time, the only available equity financing option for listed companies. PIPE applications with the China Securities Regulatory Commission (CSRC) are often approved within a few months, whereas IPOs and seasoned equity offerings can take a couple of years to approve (if they’re ever approved at all) and are subject to much tougher requirements. In recent years, the IPO option was simply closed most of the time by the CSRC. As a result, PIPE offerings are, on average, more than 35% of the total shares outstanding and can be as high as 90% or more. PIPE deals are distributed across industries, much like the structure of the Chinese economy: PIPE financing is dominated by firms in industries that have experienced the worst capacity overexpansion, with relatively few deals done in industries that have minimal overcapacity issues. The authors analyze determinants of PIPE discounts, post-PIPE financial performance changes, and post-PIPE excess stock returns. They discuss and design optimal investment strategies to take advantage of PIPE offerings in China and backtest the strategies. The authors conclude that on a risk-adjusted basis, Chinese PIPEs present attractive opportunities. |
2013 |
Chen, Z Capital freedom in china as viewed from the evolution of the stock market Journal Article The Cato Journal, 2013, ISSN: 0273-3072. @article{HKUHUB_10722_222286, title = {Capital freedom in china as viewed from the evolution of the stock market}, author = {Z Chen}, url = {http://hdl.handle.net/10722/222286}, issn = {0273-3072}, year = {2013}, date = {2013-01-01}, journal = {The Cato Journal}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
Lu, Y; Tao, Z; NI, J; YU, L City-industry Growth in China Journal Article China Economic Review, 2013. @article{HKUHUB_10722_205988, title = {City-industry Growth in China}, author = {Y Lu and Z Tao and J NI and L YU}, url = {http://hdl.handle.net/10722/205988}, doi = {10.1016/j.chieco.2013.08.004}, year = {2013}, date = {2013-01-01}, journal = {China Economic Review}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
2012 |
Li, H; Damiano, E; Suen, W Competing for talents Journal Article Journal of Economic Theory, 2012, ISSN: 0022-0531. @article{HKUHUB_10722_177805, title = {Competing for talents}, author = {H Li and E Damiano and W Suen}, url = {http://hdl.handle.net/10722/177805}, doi = {10.1016/j.jet.2012.09.002}, issn = {0022-0531}, year = {2012}, date = {2012-01-01}, journal = {Journal of Economic Theory}, abstract = {Two organizations compete for high quality agents from a fixed population of heterogeneous qualities by designing how to distribute their resources among members according to their quality ranking. The peer effect induces both organizations to spend the bulk of their resources on higher ranks in an attempt to attract top talents that benefit the rest of their membership. Equilibrium is asymmetric, with the organization with a lower average quality offering steeper increases in resources per rank. High quality agents are present in both organizations, while low quality agents receive no resources from either organization and are segregated by quality into the two organizations. A stronger peer effect increases the competition for high quality agents, resulting in both organizations concentrating their resources on fewer ranks with steeper increases in resources per rank, and yields a greater equilibrium difference in average quality between the two organizations. © 2012 Elsevier Inc. All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Two organizations compete for high quality agents from a fixed population of heterogeneous qualities by designing how to distribute their resources among members according to their quality ranking. The peer effect induces both organizations to spend the bulk of their resources on higher ranks in an attempt to attract top talents that benefit the rest of their membership. Equilibrium is asymmetric, with the organization with a lower average quality offering steeper increases in resources per rank. High quality agents are present in both organizations, while low quality agents receive no resources from either organization and are segregated by quality into the two organizations. A stronger peer effect increases the competition for high quality agents, resulting in both organizations concentrating their resources on fewer ranks with steeper increases in resources per rank, and yields a greater equilibrium difference in average quality between the two organizations. © 2012 Elsevier Inc. All rights reserved. |
Li, H; Damiano, E; Suen, W Competing for talents Journal Article Journal of Economic Theory, 2012, ISSN: 0022-0531. @article{HKUHUB_10722_177805b, title = {Competing for talents}, author = {H Li and E Damiano and W Suen}, url = {http://hdl.handle.net/10722/177805}, doi = {10.1016/j.jet.2012.09.002}, issn = {0022-0531}, year = {2012}, date = {2012-01-01}, journal = {Journal of Economic Theory}, abstract = {Two organizations compete for high quality agents from a fixed population of heterogeneous qualities by designing how to distribute their resources among members according to their quality ranking. The peer effect induces both organizations to spend the bulk of their resources on higher ranks in an attempt to attract top talents that benefit the rest of their membership. Equilibrium is asymmetric, with the organization with a lower average quality offering steeper increases in resources per rank. High quality agents are present in both organizations, while low quality agents receive no resources from either organization and are segregated by quality into the two organizations. A stronger peer effect increases the competition for high quality agents, resulting in both organizations concentrating their resources on fewer ranks with steeper increases in resources per rank, and yields a greater equilibrium difference in average quality between the two organizations. © 2012 Elsevier Inc. All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Two organizations compete for high quality agents from a fixed population of heterogeneous qualities by designing how to distribute their resources among members according to their quality ranking. The peer effect induces both organizations to spend the bulk of their resources on higher ranks in an attempt to attract top talents that benefit the rest of their membership. Equilibrium is asymmetric, with the organization with a lower average quality offering steeper increases in resources per rank. High quality agents are present in both organizations, while low quality agents receive no resources from either organization and are segregated by quality into the two organizations. A stronger peer effect increases the competition for high quality agents, resulting in both organizations concentrating their resources on fewer ranks with steeper increases in resources per rank, and yields a greater equilibrium difference in average quality between the two organizations. © 2012 Elsevier Inc. All rights reserved. |
Lu, Y; Du, J; Tao, Z Contracting institutions and vertical integration: Evidence from China's manufacturing firms Journal Article Journal of Comparative Economics, 2012, ISSN: 0147-5967. @article{HKUHUB_10722_145968, title = {Contracting institutions and vertical integration: Evidence from China's manufacturing firms}, author = {Y Lu and J Du and Z Tao}, url = {http://hdl.handle.net/10722/145968}, doi = {10.1016/j.jce.2011.10.002}, issn = {0147-5967}, year = {2012}, date = {2012-01-01}, journal = {Journal of Comparative Economics}, abstract = {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 Bank data set of manufacturing firms in China, we find that poorer contracting institutions cause firms to be more vertically integrated. Our results are robust to various checks, especially the inclusion of the quality of financial institutions. © 2011 Association for Comparative Economic Studies.}, keywords = {}, pubstate = {published}, tppubtype = {article} } 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 Bank data set of manufacturing firms in China, we find that poorer contracting institutions cause firms to be more vertically integrated. Our results are robust to various checks, especially the inclusion of the quality of financial institutions. © 2011 Association for Comparative Economic Studies. |
Fernandes, Ana P; Tang, Heiwai Determinants of vertical integration in export processing: Theory and evidence from China Journal Article Journal of Development Economics, 2012, ISSN: 0304-3878. @article{HKUHUB_10722_273523, title = {Determinants of vertical integration in export processing: Theory and evidence from China}, author = {Ana P Fernandes and Heiwai Tang}, url = {http://hdl.handle.net/10722/273523}, doi = {10.1016/j.jdeveco.2012.05.004}, issn = {0304-3878}, year = {2012}, date = {2012-01-01}, journal = {Journal of Development Economics}, abstract = {This paper examines the determinants of vertical integration versus outsourcing in export processing, by exploiting the coexistence of two export processing regimes in China, which designate by law who owns and controls the imported components. Based on a variant of the Antràs-Helpman (2004) model, we show theoretically that control over imported components for assembly can affect firm integration decisions. Our empirical results show that when Chinese plants control the use of components, the export share of foreign-owned plants is positively correlated with the intensity of inputs provided by the headquarter (capital, skill, and R&D). These results are consistent with the property-rights theory of intra-firm trade. However, when foreign firms own and control the components, there is no evidence of a positive relationship between the intensity of headquarters' inputs and the prevalence of vertical integration. The results are consistent with our model that considers control over imported components as an alternative to asset ownership to alleviate hold-up by export-processing plants. © 2012 Elsevier B.V.}, keywords = {}, pubstate = {published}, tppubtype = {article} } This paper examines the determinants of vertical integration versus outsourcing in export processing, by exploiting the coexistence of two export processing regimes in China, which designate by law who owns and controls the imported components. Based on a variant of the Antràs-Helpman (2004) model, we show theoretically that control over imported components for assembly can affect firm integration decisions. Our empirical results show that when Chinese plants control the use of components, the export share of foreign-owned plants is positively correlated with the intensity of inputs provided by the headquarter (capital, skill, and R&D). These results are consistent with the property-rights theory of intra-firm trade. However, when foreign firms own and control the components, there is no evidence of a positive relationship between the intensity of headquarters' inputs and the prevalence of vertical integration. The results are consistent with our model that considers control over imported components as an alternative to asset ownership to alleviate hold-up by export-processing plants. © 2012 Elsevier B.V. |
2010 |
Lu, J; Bai, CE; Tao, Z Capital or knowhow: The role of foreign multinationals in Sino-foreign joint ventures Journal Article China Economic Review, 2010, ISSN: 1043-951X. @article{HKUHUB_10722_145959, title = {Capital or knowhow: The role of foreign multinationals in Sino-foreign joint ventures}, author = {J Lu and CE Bai and Z Tao}, url = {http://hdl.handle.net/10722/145959}, doi = {10.1016/j.chieco.2010.06.007}, issn = {1043-951X}, year = {2010}, date = {2010-01-01}, journal = {China Economic Review}, abstract = {China's success in attracting foreign direct investment has been cast in doubt as mainly a transfer of capital, not knowhow, because its financial system is incapable of allocating domestic savings and hard-earned foreign reserves to domestic enterprises. To shed light on this debate, we examine the determinants of equity sharing in Sino-foreign joint ventures with the premise that the roles of foreign direct investment (in transferring capital or knowhow) should be reflected in equity sharing between multinational firms and local firms. Our empirical analysis offers strong evidence for foreign direct investment as a transfer of knowhow, but limited support for foreign direct investment as a transfer of capital, which points to the need for further reform in China's financial system. © 2010 Elsevier Inc.}, keywords = {}, pubstate = {published}, tppubtype = {article} } China's success in attracting foreign direct investment has been cast in doubt as mainly a transfer of capital, not knowhow, because its financial system is incapable of allocating domestic savings and hard-earned foreign reserves to domestic enterprises. To shed light on this debate, we examine the determinants of equity sharing in Sino-foreign joint ventures with the premise that the roles of foreign direct investment (in transferring capital or knowhow) should be reflected in equity sharing between multinational firms and local firms. Our empirical analysis offers strong evidence for foreign direct investment as a transfer of knowhow, but limited support for foreign direct investment as a transfer of capital, which points to the need for further reform in China's financial system. © 2010 Elsevier Inc. |
Tao, Z; Lu, J Determinants of entrepreneurial activities in China Journal Article Journal of Business Venturing, 2010, ISSN: 0883-9026. @article{HKUHUB_10722_85756, title = {Determinants of entrepreneurial activities in China}, author = {Z Tao and J Lu}, url = {http://hdl.handle.net/10722/85756}, doi = {10.1016/j.jbusvent.2008.10.005}, issn = {0883-9026}, year = {2010}, date = {2010-01-01}, journal = {Journal of Business Venturing}, abstract = {The institutional environment - including protection of private properties and contract enforcement - has been rather unfavorable for the emergence and development of China's private enterprises. This is in sharp contrast to the case of the developed economies where the institutional environment is conductive to the entrepreneurial activities and only the personal attributes of would-be entrepreneurs determine their entrepreneurship decision. We thus propose a theoretical framework for the entrepreneurship decision in China with a focus on the role of the institutional environment. Using a life-histories survey data of 2854 respondents from twenty cities in China, we find strong support for the impacts of the institutional environment and its interactions with other determinants of entrepreneurship decision. © 2008 Elsevier Inc. All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The institutional environment - including protection of private properties and contract enforcement - has been rather unfavorable for the emergence and development of China's private enterprises. This is in sharp contrast to the case of the developed economies where the institutional environment is conductive to the entrepreneurial activities and only the personal attributes of would-be entrepreneurs determine their entrepreneurship decision. We thus propose a theoretical framework for the entrepreneurship decision in China with a focus on the role of the institutional environment. Using a life-histories survey data of 2854 respondents from twenty cities in China, we find strong support for the impacts of the institutional environment and its interactions with other determinants of entrepreneurship decision. © 2008 Elsevier Inc. All rights reserved. |
2009 |
Lu, Y; Du, J; Tao, Z China as a regulatory state Journal Article BOFIT Discussion Papers, 2009, ISSN: 1456-5889. @article{HKUHUB_10722_200280, title = {China as a regulatory state}, author = {Y Lu and J Du and Z Tao}, url = {http://hdl.handle.net/10722/200280}, doi = {10.2139/ssrn.1489412}, issn = {1456-5889}, year = {2009}, date = {2009-01-01}, journal = {BOFIT Discussion Papers}, abstract = {Market economy models differ in the degree of the power of the government vis-à-vis the market in the economy. Under the classifications set forth by Glaeser and Shleifer (2002, 2003), and Djankov et al. (2003), these market models range from those emphasizing low government intervention in the market (private orderings and private litigation through courts) to those where the state is an active participant (regulatory state). This paper, using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of the government vis-à-vis the market. Regional government power is found to vary considerably across China's regions. Notably, enterprises located in regions where government exerts more power in the market perform better, suggesting that the regulatory state model of the market economy is appropriate for China.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Market economy models differ in the degree of the power of the government vis-à-vis the market in the economy. Under the classifications set forth by Glaeser and Shleifer (2002, 2003), and Djankov et al. (2003), these market models range from those emphasizing low government intervention in the market (private orderings and private litigation through courts) to those where the state is an active participant (regulatory state). This paper, using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of the government vis-à-vis the market. Regional government power is found to vary considerably across China's regions. Notably, enterprises located in regions where government exerts more power in the market perform better, suggesting that the regulatory state model of the market economy is appropriate for China. |
Lu, Y; Tao, Z Contract enforcement and family control of business: Evidence from China Journal Article Journal of Comparative Economics, 2009, ISSN: 0147-5967. @article{HKUHUB_10722_145962, title = {Contract enforcement and family control of business: Evidence from China}, author = {Y Lu and Z Tao}, url = {http://hdl.handle.net/10722/145962}, doi = {10.1016/j.jce.2009.06.002}, issn = {0147-5967}, year = {2009}, date = {2009-01-01}, journal = {Journal of Comparative Economics}, abstract = {Family control of business is prevalent in developing economies, and one of the leading theories suggests that it is a response to weak contract enforcement in such economies. In this paper, we investigate the impacts of contract enforcement on the degree of family control of business using a sample of China's private enterprises. It is found that weaker contract enforcement is associated with the higher degree of family control of business. Our results are robust to the control for omitted variables and reserve causality issues, to the adjustment for the sample attrition bias, to the use of a sub-sample, and to the inclusion of other explanations for the family control of business. © 2009 Association for Comparative Economic Studies.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Family control of business is prevalent in developing economies, and one of the leading theories suggests that it is a response to weak contract enforcement in such economies. In this paper, we investigate the impacts of contract enforcement on the degree of family control of business using a sample of China's private enterprises. It is found that weaker contract enforcement is associated with the higher degree of family control of business. Our results are robust to the control for omitted variables and reserve causality issues, to the adjustment for the sample attrition bias, to the use of a sub-sample, and to the inclusion of other explanations for the family control of business. © 2009 Association for Comparative Economic Studies. |
2008 |
Bakshi, G; Chen, Z Cash Flow Risk, Discounting Risk, and the Equity Premium Puzzle Book Chapter 2008. @inbook{HKUHUB_10722_222283, title = {Cash Flow Risk, Discounting Risk, and the Equity Premium Puzzle}, author = {G Bakshi and Z Chen}, url = {http://hdl.handle.net/10722/222283}, doi = {10.1016/B978-044450899-7.50018-X}, year = {2008}, date = {2008-01-01}, journal = {Handbook of the equity risk premium}, abstract = {This article investigates the impact of cash flow risk and discounting risk on the aggregate equity premium. Our approach is based on the idea that consumption is hard to measure empirically, so if we substitute out an empirically difficult-to-estimate marginal utility by a pricing kernel of observables, we can evaluate the empirical performance of an equilibrium asset pricing model in a different way. Once the pricing-kernel process is specified, we can endogenously solve for the equity premium, the price of the market portfolio, and the term structure of interest rates within the same underlying equilibrium. Embedded in the closed-form solution are compensations for cash flow risk and discounting risk. With the solution for the risk premium explicitly given, we then calibrate the model to evaluate its empirical performance. This approach allows us to avoid the impact of the unobservable consumption or market portfolio on inferences regarding the model's performance. Our illustrative model is based on the assumption that aggregate dividend equals a fixed fraction of aggregate earnings plus noise, and the expected aggregate earnings growth follows a mean-reverting stochastic process. Moreover, the economy-wide pricing kernel is chosen to be consistent with (1) a constant market price of aggregate risk and (2) a mean-reverting interest rate process with constant volatility. Estimation results show that the framework can mimic the observed market equity premium.}, keywords = {}, pubstate = {published}, tppubtype = {inbook} } This article investigates the impact of cash flow risk and discounting risk on the aggregate equity premium. Our approach is based on the idea that consumption is hard to measure empirically, so if we substitute out an empirically difficult-to-estimate marginal utility by a pricing kernel of observables, we can evaluate the empirical performance of an equilibrium asset pricing model in a different way. Once the pricing-kernel process is specified, we can endogenously solve for the equity premium, the price of the market portfolio, and the term structure of interest rates within the same underlying equilibrium. Embedded in the closed-form solution are compensations for cash flow risk and discounting risk. With the solution for the risk premium explicitly given, we then calibrate the model to evaluate its empirical performance. This approach allows us to avoid the impact of the unobservable consumption or market portfolio on inferences regarding the model's performance. Our illustrative model is based on the assumption that aggregate dividend equals a fixed fraction of aggregate earnings plus noise, and the expected aggregate earnings growth follows a mean-reverting stochastic process. Moreover, the economy-wide pricing kernel is chosen to be consistent with (1) a constant market price of aggregate risk and (2) a mean-reverting interest rate process with constant volatility. Estimation results show that the framework can mimic the observed market equity premium. |
Du, J; Tao, Z; Lu, Y China as a regulatory state Conference 2008. @conference{HKUHUB_10722_63299, title = {China as a regulatory state}, author = {J Du and Z Tao and Y Lu}, url = {http://hdl.handle.net/10722/63299}, year = {2008}, date = {2008-01-01}, journal = {RES Young Economist of the Year 2008}, abstract = {This paper, by using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of government vis-à-vis market, which is the distinguishing feature of various models of a market economy including private orderings, private litigations through courts, and regulatory state (Glaeser and Shleifer, 2002, 2003; Djankov et al., 2003). It is found that enterprises located in regions with greater powers of government vis-à-vis market enjoy better performance, suggesting that regulatory state is an appropriate model of a market economy for China. Evidence is also presented to rule out the concern that these results are driven by rent-seeking activities.}, keywords = {}, pubstate = {published}, tppubtype = {conference} } This paper, by using data from a survey of 3,073 private enterprises in China, constructs an index to quantify the power of government vis-à-vis market, which is the distinguishing feature of various models of a market economy including private orderings, private litigations through courts, and regulatory state (Glaeser and Shleifer, 2002, 2003; Djankov et al., 2003). It is found that enterprises located in regions with greater powers of government vis-à-vis market enjoy better performance, suggesting that regulatory state is an appropriate model of a market economy for China. Evidence is also presented to rule out the concern that these results are driven by rent-seeking activities. |
Song, FM; Tao, Z; Zhou, L; Xie, D Contributions to Modern Economics Research: in honor of Professor Gregory Chow Book 2008. @book{HKUHUB_10722_123431, title = {Contributions to Modern Economics Research: in honor of Professor Gregory Chow}, author = {FM Song and Z Tao and L Zhou and D Xie}, url = {http://hdl.handle.net/10722/123431}, year = {2008}, date = {2008-01-01}, keywords = {}, pubstate = {published}, tppubtype = {book} } |
Damiano, E; Li, H; Suen, W Credible Ratings Journal Article Theoretical Economics, 2008, ISSN: 1933-6837. @article{HKUHUB_10722_60160, title = {Credible Ratings}, author = {E Damiano and H Li and W Suen}, url = {http://hdl.handle.net/10722/60160}, issn = {1933-6837}, year = {2008}, date = {2008-01-01}, journal = {Theoretical Economics}, abstract = {This paper considers a model of a rating agency with multiple clients, in which each client has a separate market that forms a belief about the quality of the client after the agency issues a rating. When the clients are rated separately (individual rating), the credibility of a good rating in an inflationary equilibrium of the signaling game is limited by the incentive of the agency to exaggerate the quality of the client. With a centralized rating, the agency rates all clients together and shares the rating information among all markets. This allows the agency to coordinate the ratings and achieve a higher average level of credibility for its good ratings than with individual rating. Under decentralized rating, the ratings are again shared among all markets, but each client is rated by a self-interested rater of the agency with no access to the quality information of other clients. When the underlying qualities of the clients are correlated, decentralized rating leads to a smaller degree of rating inflation and hence a greater level of credibility than under individual rating. Comparing centralized rating with decentralized rating, we find that centralized rating dominates decentralized rating for the agency when the underlying qualities are weakly correlated, but the reverse holds when the qualities are strongly correlated.}, keywords = {}, pubstate = {published}, tppubtype = {article} } This paper considers a model of a rating agency with multiple clients, in which each client has a separate market that forms a belief about the quality of the client after the agency issues a rating. When the clients are rated separately (individual rating), the credibility of a good rating in an inflationary equilibrium of the signaling game is limited by the incentive of the agency to exaggerate the quality of the client. With a centralized rating, the agency rates all clients together and shares the rating information among all markets. This allows the agency to coordinate the ratings and achieve a higher average level of credibility for its good ratings than with individual rating. Under decentralized rating, the ratings are again shared among all markets, but each client is rated by a self-interested rater of the agency with no access to the quality information of other clients. When the underlying qualities of the clients are correlated, decentralized rating leads to a smaller degree of rating inflation and hence a greater level of credibility than under individual rating. Comparing centralized rating with decentralized rating, we find that centralized rating dominates decentralized rating for the agency when the underlying qualities are weakly correlated, but the reverse holds when the qualities are strongly correlated. |
Damiano, E; Li, H; Suen, W Credible Ratings Journal Article Theoretical Economics, 2008, ISSN: 1933-6837. @article{HKUHUB_10722_60160b, title = {Credible Ratings}, author = {E Damiano and H Li and W Suen}, url = {http://hdl.handle.net/10722/60160}, issn = {1933-6837}, year = {2008}, date = {2008-01-01}, journal = {Theoretical Economics}, abstract = {This paper considers a model of a rating agency with multiple clients, in which each client has a separate market that forms a belief about the quality of the client after the agency issues a rating. When the clients are rated separately (individual rating), the credibility of a good rating in an inflationary equilibrium of the signaling game is limited by the incentive of the agency to exaggerate the quality of the client. With a centralized rating, the agency rates all clients together and shares the rating information among all markets. This allows the agency to coordinate the ratings and achieve a higher average level of credibility for its good ratings than with individual rating. Under decentralized rating, the ratings are again shared among all markets, but each client is rated by a self-interested rater of the agency with no access to the quality information of other clients. When the underlying qualities of the clients are correlated, decentralized rating leads to a smaller degree of rating inflation and hence a greater level of credibility than under individual rating. Comparing centralized rating with decentralized rating, we find that centralized rating dominates decentralized rating for the agency when the underlying qualities are weakly correlated, but the reverse holds when the qualities are strongly correlated.}, keywords = {}, pubstate = {published}, tppubtype = {article} } This paper considers a model of a rating agency with multiple clients, in which each client has a separate market that forms a belief about the quality of the client after the agency issues a rating. When the clients are rated separately (individual rating), the credibility of a good rating in an inflationary equilibrium of the signaling game is limited by the incentive of the agency to exaggerate the quality of the client. With a centralized rating, the agency rates all clients together and shares the rating information among all markets. This allows the agency to coordinate the ratings and achieve a higher average level of credibility for its good ratings than with individual rating. Under decentralized rating, the ratings are again shared among all markets, but each client is rated by a self-interested rater of the agency with no access to the quality information of other clients. When the underlying qualities of the clients are correlated, decentralized rating leads to a smaller degree of rating inflation and hence a greater level of credibility than under individual rating. Comparing centralized rating with decentralized rating, we find that centralized rating dominates decentralized rating for the agency when the underlying qualities are weakly correlated, but the reverse holds when the qualities are strongly correlated. |
2006 |
Siu, AKF; Wong, RYC Counting the Cost: The Economic and Social Cost of SARS Book Chapter 2006. @inbook{HKUHUB_10722_121082, title = {Counting the Cost: The Economic and Social Cost of SARS}, author = {AKF Siu and RYC Wong}, url = {http://hdl.handle.net/10722/121082}, year = {2006}, date = {2006-01-01}, journal = {Severe Acute Respiratory Syndrome, A Clinical Guide}, keywords = {}, pubstate = {published}, tppubtype = {inbook} } |
Chen, Z Development prospects of China's industries Book Chapter 2006. @inbook{HKUHUB_10722_222281, title = {Development prospects of China's industries}, author = {Z Chen}, url = {http://hdl.handle.net/10722/222281}, year = {2006}, date = {2006-01-01}, journal = {Emerging economies and the transformation of international business : Brazil, Russia, India and China (BRICs)}, keywords = {}, pubstate = {published}, tppubtype = {inbook} } |
2004 |
Li, H; Suen, W Delegating decisions to experts Journal Article Journal of Political Economy, 2004, ISSN: 0022-3808. @article{HKUHUB_10722_42280b, title = {Delegating decisions to experts}, author = {H Li and W Suen}, url = {http://hdl.handle.net/10722/42280}, doi = {10.1086/379941}, issn = {0022-3808}, year = {2004}, date = {2004-01-01}, journal = {Journal of Political Economy}, abstract = {We present a model of delegation with self-interested and privately informed experts. A team of experts with extreme but opposite biases is acceptable to a wide range of decision makers with diverse preferences, but the value of expertise from such a team is low. A decision maker wants to appoint experts who are less partisan than he is in order to facilitate information pooling by the expert team. Selective delegation, either by controlling the decision-making process or by conditioning the delegation decision on his own information, is an effective way for the decision maker to safeguard own interests while making use of expert information. © 2004 by The University of Chicago. All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } We present a model of delegation with self-interested and privately informed experts. A team of experts with extreme but opposite biases is acceptable to a wide range of decision makers with diverse preferences, but the value of expertise from such a team is low. A decision maker wants to appoint experts who are less partisan than he is in order to facilitate information pooling by the expert team. Selective delegation, either by controlling the decision-making process or by conditioning the delegation decision on his own information, is an effective way for the decision maker to safeguard own interests while making use of expert information. © 2004 by The University of Chicago. All rights reserved. |
Li, H; Suen, W Delegating decisions to experts Journal Article Journal of Political Economy, 2004, ISSN: 0022-3808. @article{HKUHUB_10722_42280, title = {Delegating decisions to experts}, author = {H Li and W Suen}, url = {http://hdl.handle.net/10722/42280}, doi = {10.1086/379941}, issn = {0022-3808}, year = {2004}, date = {2004-01-01}, journal = {Journal of Political Economy}, abstract = {We present a model of delegation with self-interested and privately informed experts. A team of experts with extreme but opposite biases is acceptable to a wide range of decision makers with diverse preferences, but the value of expertise from such a team is low. A decision maker wants to appoint experts who are less partisan than he is in order to facilitate information pooling by the expert team. Selective delegation, either by controlling the decision-making process or by conditioning the delegation decision on his own information, is an effective way for the decision maker to safeguard own interests while making use of expert information. © 2004 by The University of Chicago. All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } We present a model of delegation with self-interested and privately informed experts. A team of experts with extreme but opposite biases is acceptable to a wide range of decision makers with diverse preferences, but the value of expertise from such a team is low. A decision maker wants to appoint experts who are less partisan than he is in order to facilitate information pooling by the expert team. Selective delegation, either by controlling the decision-making process or by conditioning the delegation decision on his own information, is an effective way for the decision maker to safeguard own interests while making use of expert information. © 2004 by The University of Chicago. All rights reserved. |
2003 |
Chen, Z Capital markets and legal development: The China case Journal Article China Economic Review, 2003, ISSN: 1043-951X. @article{HKUHUB_10722_222289, title = {Capital markets and legal development: The China case}, author = {Z Chen}, url = {http://hdl.handle.net/10722/222289}, doi = {10.1016/j.chieco.2003.09.016}, issn = {1043-951X}, year = {2003}, date = {2003-01-01}, journal = {China Economic Review}, abstract = {Recent research establishes a significant positive correlation between law and finance (and hence economic growth), restarting a debate on the 'law matters' thesis. However, which way the causality goes is still not clear. The purpose of this paper is to use the ongoing reform experience of China, especially its capital market experience, to examine the direction of causality. First, we show that China's recent experience is largely consistent with Coffee's [Yale Law Journal 111 (2001, October)] 'crash-then-law' interpretation of this correlation. Indeed, it is the large and clearly defined constituency of investors that has been a key driving force behind much of the recent legal progress. The rights and economic interests of this constituency have fundamentally challenged the traditional emphasis of the Chinese legal culture on administrative and criminal sanctions, but not on civil litigation law. Second, we compare the different contributions to legal change made by the stock market and the consumer product markets. We argue that capital markets are perhaps the most conducive to the formation of a politically powerful constituency and hence more aggressive legal change, because of (1) the higher degree of commonality among interested parties and (2) immediately measurable and tangible damages. These two characteristics not only allow investors to identify with each other more easily, but also create an ideal basis for more debate in the media, which in turn promotes the development of a legal culture. © 2003 Elsevier Inc.All rights reserved.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Recent research establishes a significant positive correlation between law and finance (and hence economic growth), restarting a debate on the 'law matters' thesis. However, which way the causality goes is still not clear. The purpose of this paper is to use the ongoing reform experience of China, especially its capital market experience, to examine the direction of causality. First, we show that China's recent experience is largely consistent with Coffee's [Yale Law Journal 111 (2001, October)] 'crash-then-law' interpretation of this correlation. Indeed, it is the large and clearly defined constituency of investors that has been a key driving force behind much of the recent legal progress. The rights and economic interests of this constituency have fundamentally challenged the traditional emphasis of the Chinese legal culture on administrative and criminal sanctions, but not on civil litigation law. Second, we compare the different contributions to legal change made by the stock market and the consumer product markets. We argue that capital markets are perhaps the most conducive to the formation of a politically powerful constituency and hence more aggressive legal change, because of (1) the higher degree of commonality among interested parties and (2) immediately measurable and tangible damages. These two characteristics not only allow investors to identify with each other more easily, but also create an ideal basis for more debate in the media, which in turn promotes the development of a legal culture. © 2003 Elsevier Inc.All rights reserved. |
2001 |
Wong, MLS; Wong, YCR Competition in China's domestic banking industry Journal Article Cato Journal, 2001, ISSN: 0273-3072. @article{HKUHUB_10722_86044, title = {Competition in China's domestic banking industry}, author = {MLS Wong and YCR Wong}, url = {http://hdl.handle.net/10722/86044}, issn = {0273-3072}, year = {2001}, date = {2001-01-01}, journal = {Cato Journal}, keywords = {}, pubstate = {published}, tppubtype = {article} } |
Li, H; Rosen, S; Suen, W Conflicts and common interests in committees Journal Article American Economic Review, 2001, ISSN: 0002-8282. @article{HKUHUB_10722_48713b, title = {Conflicts and common interests in committees}, author = {H Li and S Rosen and W Suen}, url = {http://hdl.handle.net/10722/48713}, issn = {0002-8282}, year = {2001}, date = {2001-01-01}, journal = {American Economic Review}, abstract = {Committees improve decisions by pooling members' independent information, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. Committee decision procedures transform continuous data into ordered ranks through voting. This coarsens the transmission of information, but controls strategic manipulations and allows some degree of information sharing. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for members than does delegation. (JEL D71, D82, C72).}, keywords = {}, pubstate = {published}, tppubtype = {article} } Committees improve decisions by pooling members' independent information, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. Committee decision procedures transform continuous data into ordered ranks through voting. This coarsens the transmission of information, but controls strategic manipulations and allows some degree of information sharing. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for members than does delegation. (JEL D71, D82, C72). |
Li, H; Rosen, S; Suen, W Conflicts and common interests in committees Journal Article American Economic Review, 2001, ISSN: 0002-8282. @article{HKUHUB_10722_48713, title = {Conflicts and common interests in committees}, author = {H Li and S Rosen and W Suen}, url = {http://hdl.handle.net/10722/48713}, issn = {0002-8282}, year = {2001}, date = {2001-01-01}, journal = {American Economic Review}, abstract = {Committees improve decisions by pooling members' independent information, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. Committee decision procedures transform continuous data into ordered ranks through voting. This coarsens the transmission of information, but controls strategic manipulations and allows some degree of information sharing. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for members than does delegation. (JEL D71, D82, C72).}, keywords = {}, pubstate = {published}, tppubtype = {article} } Committees improve decisions by pooling members' independent information, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. Committee decision procedures transform continuous data into ordered ranks through voting. This coarsens the transmission of information, but controls strategic manipulations and allows some degree of information sharing. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for members than does delegation. (JEL D71, D82, C72). |
2000 |
Tso, PS; Luk, YF; Siu, AKF; Chang, EC; Wong, RYC; Kwan, WC 2000. @book{HKUHUB_10722_123437, title = {Causes and Development of the Asian Financial and Economic Crisis: With Special Emphasis on China and the Hong Kong SAR}, author = {PS Tso and YF Luk and AKF Siu and EC Chang and RYC Wong and WC Kwan}, url = {http://hdl.handle.net/10722/123437}, year = {2000}, date = {2000-01-01}, keywords = {}, pubstate = {published}, tppubtype = {book} } |
Bai, CE; Tao, Z Contract mixing in franchising as a mechanism for public-good provision Journal Article Journal of Economics and Management Strategy, 2000, ISSN: 1058-6407. @article{HKUHUB_10722_85794, title = {Contract mixing in franchising as a mechanism for public-good provision}, author = {CE Bai and Z Tao}, url = {http://hdl.handle.net/10722/85794}, doi = {10.1162/105864000567800}, issn = {1058-6407}, year = {2000}, date = {2000-01-01}, journal = {Journal of Economics and Management Strategy}, abstract = {This paper is concerned with the coexistence of company-owned units and franchised units in business format franchising and their different contractual arrangements. Drawing insights from case studies that indicate both the development and the maintenance of company-wide brand names and unit-specific sales activities are crucial to a franchise company, we construct a multitask model to account for such contract mixing in franchising. Intuitively, low-powered contracts are offered to some managers to induce effort for brand-name development and maintenance, while high-powered contracts are offered to the remaining managers to elicit sales activity and capture the beneficial effect of the company brand name. Franchising can thus be viewed as an organizational agreement for production involving brand-name products and services.}, keywords = {}, pubstate = {published}, tppubtype = {article} } This paper is concerned with the coexistence of company-owned units and franchised units in business format franchising and their different contractual arrangements. Drawing insights from case studies that indicate both the development and the maintenance of company-wide brand names and unit-specific sales activities are crucial to a franchise company, we construct a multitask model to account for such contract mixing in franchising. Intuitively, low-powered contracts are offered to some managers to induce effort for brand-name development and maintenance, while high-powered contracts are offered to the remaining managers to elicit sales activity and capture the beneficial effect of the company brand name. Franchising can thus be viewed as an organizational agreement for production involving brand-name products and services. |
Wong, RYC Cyberport and IT Financing Conference 2000. @conference{HKUHUB_10722_112410, title = {Cyberport and IT Financing}, author = {RYC Wong}, url = {http://hdl.handle.net/10722/112410}, year = {2000}, date = {2000-01-01}, journal = {Hong Kong Singapore Business Association Lunch}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
1999 |
Wong, RYC Challenges in Housing Development' Conference 1999. @conference{HKUHUB_10722_112261, title = {Challenges in Housing Development'}, author = {RYC Wong}, url = {http://hdl.handle.net/10722/112261}, year = {1999}, date = {1999-01-01}, journal = {Housing Conference 'Better Homes in the Next Millennium'}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
1998 |
Tao, Z; Dasgupta, S Contractual incompleteness and the optimality of equity joint ventures Journal Article Journal of Economic Behavior and Organization, 1998, ISSN: 0167-2681. @article{HKUHUB_10722_85912, title = {Contractual incompleteness and the optimality of equity joint ventures}, author = {Z Tao and S Dasgupta}, url = {http://hdl.handle.net/10722/85912}, doi = {10.1016/S0167-2681(98)00117-6}, issn = {0167-2681}, year = {1998}, date = {1998-01-01}, journal = {Journal of Economic Behavior and Organization}, abstract = {Firms engaged in the pooling of complementary skills often choose the Equity Joint Venture (EJV) over alternative profit-sharing arrangements. This paper addresses the issue of how equity shares are different from profit shares. It is shown that, in settings of contractual incompleteness, marketable equity ownership, when compared to non-transferable profit-sharing contracts, provides better ex ante incentives to the parties involved by mitigating ex post hold-up problems. Among other things, the prevalence of the 51-49 or 50-50 EJV in which one party has 51 percent (or 50 percent) equity shares is explained.}, keywords = {}, pubstate = {published}, tppubtype = {article} } Firms engaged in the pooling of complementary skills often choose the Equity Joint Venture (EJV) over alternative profit-sharing arrangements. This paper addresses the issue of how equity shares are different from profit shares. It is shown that, in settings of contractual incompleteness, marketable equity ownership, when compared to non-transferable profit-sharing contracts, provides better ex ante incentives to the parties involved by mitigating ex post hold-up problems. Among other things, the prevalence of the 51-49 or 50-50 EJV in which one party has 51 percent (or 50 percent) equity shares is explained. |
1997 |
Suen, W Decomposing wage residuals: Unmeasured skill or statistical artifact? Journal Article Journal of Labor Economics, 1997, ISSN: 0734-306X. @article{HKUHUB_10722_42277, title = {Decomposing wage residuals: Unmeasured skill or statistical artifact?}, author = {W Suen}, url = {http://hdl.handle.net/10722/42277}, issn = {0734-306X}, year = {1997}, date = {1997-01-01}, journal = {Journal of Labor Economics}, abstract = {The decomposition of wage residuals into standard deviation and percentile ranks can be misleading because the two measures are not necessarily independent. With rising wage inequality, the mean percentile rank of low-wage groups will rise simply because more dispersed distributions have thicker tails. This interpretation is consistent with the observed stability of gender and racial wage gaps. In contrast, the unmeasured skill interpretation of wage residuals would predict widening wage gaps in the face of rising wage inequality, unless one posits an increase in the level of unobserved skill for women and blacks.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The decomposition of wage residuals into standard deviation and percentile ranks can be misleading because the two measures are not necessarily independent. With rising wage inequality, the mean percentile rank of low-wage groups will rise simply because more dispersed distributions have thicker tails. This interpretation is consistent with the observed stability of gender and racial wage gaps. In contrast, the unmeasured skill interpretation of wage residuals would predict widening wage gaps in the face of rising wage inequality, unless one posits an increase in the level of unobserved skill for women and blacks. |
Suen, W Decomposing wage residuals: Unmeasured skill or statistical artifact? Journal Article Journal of Labor Economics, 1997, ISSN: 0734-306X. @article{HKUHUB_10722_42277b, title = {Decomposing wage residuals: Unmeasured skill or statistical artifact?}, author = {W Suen}, url = {http://hdl.handle.net/10722/42277}, issn = {0734-306X}, year = {1997}, date = {1997-01-01}, journal = {Journal of Labor Economics}, abstract = {The decomposition of wage residuals into standard deviation and percentile ranks can be misleading because the two measures are not necessarily independent. With rising wage inequality, the mean percentile rank of low-wage groups will rise simply because more dispersed distributions have thicker tails. This interpretation is consistent with the observed stability of gender and racial wage gaps. In contrast, the unmeasured skill interpretation of wage residuals would predict widening wage gaps in the face of rising wage inequality, unless one posits an increase in the level of unobserved skill for women and blacks.}, keywords = {}, pubstate = {published}, tppubtype = {article} } The decomposition of wage residuals into standard deviation and percentile ranks can be misleading because the two measures are not necessarily independent. With rising wage inequality, the mean percentile rank of low-wage groups will rise simply because more dispersed distributions have thicker tails. This interpretation is consistent with the observed stability of gender and racial wage gaps. In contrast, the unmeasured skill interpretation of wage residuals would predict widening wage gaps in the face of rising wage inequality, unless one posits an increase in the level of unobserved skill for women and blacks. |
1996 |
Wong, RYC Cross Border Crime Conference 1996. @conference{HKUHUB_10722_114917, title = {Cross Border Crime}, author = {RYC Wong}, url = {http://hdl.handle.net/10722/114917}, year = {1996}, date = {1996-01-01}, journal = {Conference on Ideas and Change in the Modern World, Mont Pelerin Society General Meeting}, keywords = {}, pubstate = {published}, tppubtype = {conference} } |
1995 |
Wong, RYC China's economic reform: the next step Journal Article Contemporary Economic Policy, 1995, ISSN: 1074-3529. @article{HKUHUB_10722_85629, title = {China's economic reform: the next step}, author = {RYC Wong}, url = {http://hdl.handle.net/10722/85629}, doi = {10.1111/j.1465-7287.1995.tb00708.x}, issn = {1074-3529}, year = {1995}, date = {1995-01-01}, journal = {Contemporary Economic Policy}, abstract = {China's economic reforms succeeded in decentralizing decision making power down to the local and enterprise level. This decentralization has permitted a vibrant non-state sector to emerge alongside the state sector. Growing out of the state plan accounts for much of China's spectacular economic growth. However, productivity in the state sector has experienced little improvement. One can trace recurrent macroeconomic imbalances and inflation to the state policy to provide cheap credit to cover the huge losses sustained by state-owned enterprises. Attempts to reimpose controls to cool down an overheated economy repeatedly have halted the momentum for economic reform. Failure to introduce banking and financial reforms threatens future growth of the non-state sector. The success of such reforms depends critically on efforts to restructure and privatize state-owned enterprises. Growing out of the state plan requires officials to adopt an explicit policy to stop supporting the losses in the state owned enterprises.}, keywords = {}, pubstate = {published}, tppubtype = {article} } China's economic reforms succeeded in decentralizing decision making power down to the local and enterprise level. This decentralization has permitted a vibrant non-state sector to emerge alongside the state sector. Growing out of the state plan accounts for much of China's spectacular economic growth. However, productivity in the state sector has experienced little improvement. One can trace recurrent macroeconomic imbalances and inflation to the state policy to provide cheap credit to cover the huge losses sustained by state-owned enterprises. Attempts to reimpose controls to cool down an overheated economy repeatedly have halted the momentum for economic reform. Failure to introduce banking and financial reforms threatens future growth of the non-state sector. The success of such reforms depends critically on efforts to restructure and privatize state-owned enterprises. Growing out of the state plan requires officials to adopt an explicit policy to stop supporting the losses in the state owned enterprises. |