Webinar Series



Investing with the Government: A Field Experiment in China

The authors study the demand for government participation in financial markets. Focusing on the venture capital and private equity industry in China, the authors design a non-deceptive field experiment in collaboration with the leading industry organization, through which the authors conduct 1,000 experimental surveys of both capital investors (LPs) and private firms that manage the invested capital by deploying it to high-growth firms (GPs). Each respondent evaluates hypothetical profiles of potential partners, whose characteristics the authors randomize, under the real-stakes incentive that they will be matched with real partners based on their preferences. The authors document that the average GP dislikes government-connected LPs. Consistent with political views of government participation in finance, such dislike is not present for government-owned GPs. Qualitative surveys suggest the presence of political interference in decision-making by LPs with government ties is a leading mechanism why private GPs prefer capital from private LPs. On the other hand, the authors find that the average LP prefers GPs that have a government-connected LP as an investor. The authors combine their experimental estimates with administrative data on actual GP-LP matches, and develop a new two-sided search and matching model to show how government participation shapes market outcomes.


Session Chair: Michael SONG
Professor, Department of Economics, Chinese University of Hong Kong

10:00 am
Investing with the Government: A Field Experiment in China

Emanuele COLONNELLI, Assistant Professor of Finance; Liew Family Junior Faculty Fellow and Fama Faculty Fellow, University of Chicago

Bo LI, Assistant Professor at PBC School of Finance, Tsinghua University
Ernest LIU, Assistant Professor of Economics, Bendheim Center for Finance, Department of Economics, Princeton University
10:25 am
Sabrina T. HOWELL, Assistant Professor of Finance, NYU Stern School of Business, New York University
10:50 am
11:10 am

Updated 14 Dec 2021


  • Emanuele COLONNELLI

    Emanuele COLONNELLI


    Assistant Professor of Finance; Liew Family Junior Faculty Fellow and Fama Faculty Fellow, University of Chicago

    Emanuele Colonnelli is an Assistant Professor of Finance, Liew Family Junior Faculty Fellow, and Fama Faculty Fellow at The University of Chicago, Booth School of Business. Colonnelli’s research focuses on the intersection between finance and development, with a special interest in high-growth entrepreneurship and talent allocation in emerging markets, and in the interaction between governments, institutions, and firms. He is the recipient of a number of grants and awards, such as the AQR Top Finance Graduate Award. He has research and work experience in several emerging countries, including Bangladesh, Brazil, China, Ghana, India, Malawi, Myanmar, South Africa, and Uganda, and regularly conducts world-wide surveys of firms and investors. His research has been published in various top academic journals, such as the American Economic Review, the Journal of Finance, the Journal of Financial Economics, and the Review of Economic Studies. Colonnelli holds a PhD in Economics from Stanford University, an MSc in Economics from Bocconi University, a BSc in Economics from the University of Siena, and he spent an academic year visiting Pembroke College, Oxford University.

  • Sabrina T. HOWELL

    Sabrina T. HOWELL


    Assistant Professor of Finance, NYU Stern School of Business, New York University

    Sabrina Howell is an Assistant Professor of Finance at the New York University Stern School of Business. She is also a Faculty Research Fellow at the National Bureau of Economic Research and a Research Fellow at the Private Equity Research Consortium. Professor Howell’s research focuses on entrepreneurship, private equity, fintech, innovation, energy, and China.She is the recipient of the 2020 AQR Asset Management Institute Young Researcher Award and the 2020 Review of Financial Studies Referee of the Year Award, among other prizes. She also serves as an Associate Editor at Management Science. Professor Howell received her B.A. from Yale University and her Ph.D. from Harvard University. She previously worked as an energy consultant for Charles River Associates in Houston, and on energy security policy for Securing America’s Future Energy (SAFE) in Washington DC.

  • Michael SONG

    Michael SONG


    Professor, Department of Economics, Chinese University of Hong Kong

    Michael Song is a professor at the Department of Economics, Chinese University of Hong Kong (CUHK), an outstanding fellow of the Faculty of Social Science at CUHK, a co-director of CUHK-Tsinghua Joint Research Center for Chinese Economy and a distinguished visiting professor at the School of Economics and Management, Tsinghua University. His research focuses onChinese economy and macroeconomics. He published papers on leading academic journals including American Economic Review and Econometrica. His paper “Growing like China” won Sunyefang Economic Science Award and the Best Paper Award for Chinese Young Economists. Before joining CUHK, Prof. Song was an associate professor of economics at Chicago Booth. Prof. Song is also a co-editor of China Economic Review, an associate editor of Econometrica and Journal of European Economic Association and an academic committee member of China’s Economics Foundation.

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Session Format

Each session lasts for 1 hour 10 minutes (25 minutes for the author, 25 minutes for the discussant and 20 minutes for participants' Q&A). Sessions will be recorded and posted on ABFER's web, except in cases where speakers or discussants request us not to.


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