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Deciphering Chinese Financing To African Countries

By Gwen Geng

The paper considers what attracts Chinese aid and Chinese investment to African countries and what kinds of Chinese financing projects are more likely to have unrevealed financing amount. The main database used is AidData: China’s Official Finance to Africa 2000-2012. It contains 2356 Chinese financing projects to 50 African countries. The results suggest that Chinese aid supports less developed economies, while Chinese investment favors countries with resource abundance and political conditions conducive to profit-making. The findings show that projects with unrevealed funding amounts tend to fall under investment and the government sector among other categories, raising questions on financing secrecy.

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Advisors: Robert Garlick and Michelle Connolly | JEL Codes: F13, F54, N47, N57, O24, R11, R15

Government Allocation of Import Quota Slots to US Films in China’s Cinematic Movie Market

By Sabrina McCutchan

The Chinese government implements a complex regulatory system to decrease the market share of imported Hollywood films for theatrical release. The import quota, censorship, and competitive release-scheduling policies in particular severely limit Hollywood’s access to the Chinese market. However, because the government has a monopoly on film distribution and receives nearly half of all box office receipts from Hollywood films, I expect that the profit incentive is comparatively more important than protectionist motives in the decision to import a Hollywood film or grant it a revenue-sharing quota slot. This paper’s findings support this hypothesis. Using a probit model, I find that three strong predictors of Chinese box office, namely US box office, Hong Kong box office, and the action genre, positively predict entry to the Chinese market and the allocation of a revenue-sharing quota slot for US-movies released in 2012.

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Advisor: Edward Tower | JEL Codes: F14, F19 | Tagged: China, Hollywood, Motion Pictures, Protectionism, Quota

Taming the Dragon: The Modernization of the Chinese Equity Markets and its Effects on IPO Underpricing

By William Benesh

The extreme underpricing of Chinese Initial Public Offerings in the early days of the Chinese equity markets was reduced by several reforms instituted by the Chinese government from around 2000 to 2002. These reforms reduced 1-day returns on IPOs from 295% to 72%. The reforms reduced IPO underpricing by decreasing the inequality between IPO supply and demand. These reforms, while announced between 2000 and 2002, likely took until around 2004 to take full effect. In addition to inequality between supply and demand, other factors such as information asymmetry and government/quality signaling contributed to underpricing both before and after the reforms.

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JEL Codes: G14, G15, G28, G30 | Tagged: China, Initial Public Offerings, Regulation, Stock Markets, Underpricing

 

 

 

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