We study information acquisition and subsequent price competition in an environment where the cost of each firm is initially unknown and composed of two components, private costs specific to the firm and costs common to all firms in the industry. In this setting, firms choose high initial prices to soften future competition. Moreover, this pricing distortion is exacerbated when firms only posse...

We exploit rich information on the geographic, product and trader characteristics of Chinese exports between 1997-2003 to examine how evolution in the city-industry presence of multinational firms influenced the quality, frequency and survival of new export transactions by private Chinese firms. Our analysis finds that increased contact with own-industry multinational firms was associated with ...

different levels of predisclosure information production and dissemination. Empirical evidence supports this size-related information Accordingly, because information search activities yield higher expected hypothesis. The magnitude of abnormal returns associated trading profits for larger firms, prices are “more informative” for larger with both good and bad earnings information has been shown...

Private equity firms are drivers of the ongoing international restructuring process. Extensive use of leverage gives private equity firms a tax advantage in the market for corporate control. We show that with limited deductibility of acquisition costs, these tax advantages will affect the efficiency of the market for corporate control: a private equity firm can outbid more efficient incumbent b...

Using a rich panel data set, we provide a rigorous analysis of the relationship between access to external finance, foreign direct investment and the exports of private enterprises in China. We conclude that, in order to foster the exports of indigenous enterprises, the elimination of financial discrimination against private firms is likely to be a more effective policy tool than the reliance o...

This paper deals with corporate governance issues and competition policy. The impact of private benefits extraction on the values of oligopolistic firms is analyzed. Private benefits are assumed to generate costs which create price distortion on the product market. For a wide range of industry concentrations, we prove that this may affect the profit (i.e. the value) of the firms in a positive s...

The fact that China is the second largest recipient of FDI in the world has been heralded by economists and government officials alike as one of the crowning achievements of Chinese economy. This paper questions this perspective. The paper focuses on FDI from ethnically Chinese economies (ECEs), which has financed China’s labor-intensive industries and its export growth. First, the paper shows ...

Literature on public and private firms has traditionally focused on the efficiency effects of differing firm ownership, although the literature has been largely dormant since the 1980s. State-led development models in Asia and Latin America warrant continued analysis of this fundamental issue in International Political Economy. This paper attempts to frame debate on natural resource governance ...

This study examines the corporate investment behavior during China’s reform era. We apply the Generalized Method of Moments (GMM) estimation to the investment Euler equation models that characterize the Chinese firms’ investment decisions. Based on the estimated structural parameters, we derive the effective discount rate (“implied” cost of capital) perceived by the firm managers to decide inve...