Annual Conference

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Economic Transformation of Asia

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May 2019

Government Credit and Trade War

Hong RU, Endong YANG, Yong LIU, Jinlu FENG, Ning CAI
By merging transaction-level trade data from China Customs and loan data from the China Development Bank (CDB), we analyze the effects of government credit on trade activities. We find that CDB credit mainly flows to SOEs in strategic industries at the top of the supply chain. These up-stream loans ...
Keywords: government credit, Export, supply chain, trade war
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Annual Conference

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Investment Finance

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May 2019

Cryptocurrency Pump-and-Dump Schemes

Baolian WANG, Donghwa SHIN, Tao LI
Pump-and-dump schemes (P&Ds) are pervasive in the cryptocurrency market. We study these events using trade-by-trade data and a sample of P&Ds with precisely identified starting times. We find that P&Ds lead to short-term cryptocurrency bubbles featuring dramatic increases in prices, volu...
Keywords: Pump-and-dump scheme, Manipulation, cryptocurrency, overconfidence, gambling
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Annual Conference

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Investment Finance

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May 2019

Rating on a Curve

Utpal BHATTACHARYA, Ariel Yu ZHANG, Janghoon SHON
We document that if an analyst is covering a strong pool, the best firm is rated less highly than it would be otherwise, and if the analyst is covering a weak pool, the worst firm is rated less badly than it would be otherwise. These relative ratings affect dispersion in recommendations. Blindly fol...
Keywords: analyst, recommendation, target price
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Annual Conference

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Investment Finance

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May 2019

Mispricing in the Global Market: A New Perspective

Hong ZHANG, Massimo MASSA, Yang (Gloria) YU
The determination of asset prices and the identification of related economic grounds are considerately more intricate in the global market due to the potential market segmentation and frictions. In this paper, we propose and test a novel intuition that cross-country mispricing can be identified when...
Keywords: Massimo MASSA, Yang Gloria YU, Hong ZHANG
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Annual Conference

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Investment Finance, Senior Fellows/Fellows

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May 2019

Hard to say goodbye to yesterday: war memories, patriotism, and individual investors’ investment preferences

Yupeng LIN, Bin KE, Weibiao XU, Hong TU
We examine whether memories of interstate wars that occurred long ago, transmitted across generations, affect the stock investment decisions of individuals who never experienced the wars themselves. Using the Second Sino-Japanese War over 1931-1945 as a setting, we find that war memories have a sign...
Keywords: Interstate war, stock investment, nonpecuniary preferences, intergenerational
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