The Joint Center initiates an annual call for proposals from University of Chicago and Tsinghua University faculty on a wide range of research topics. Initial findings from the first round of research grants will be submitted and posted summer 2022.

Research Grants To Date

Estimating Preferences of Venture Capitalists in China: Evidence from Three Field Experiments

Emanuele Colonnelli, Bo Li

How does government intervention affect early stage financing? To answer this question, we focus on China, where the government plays a major role as both a Limited Partner (LP) and a General Partner (LP), and has significant influence on the activity of investors and firms. Using rich administrative data and a unique agreement with the leading industry data platform Zero2IPO, we provide both descriptive and experimental evidence on how the involvement of government shapes the preferences of investors (GPs and LPs) and firms.


  • Emanuele Colonnelli, Assistant Professor Finance, Booth School of Business
  • Bo Li, Assistant Professor, Tsinghua University

Financing Privately-Owned Firms in China: Evidence from Equity Holdings in Small and Medium-Sized Banks

Zhiguo He, Zhuo Chen, Bibo Liu

By merging two unique datasets, one on the equity ownership of banks and one on the loans extended to privately-owned firms, we focus on city and rural commercial banks and investigate three questions: 1) whether private firm owners’ equity holdings in a bank increase the likelihood of receiving loans from the bank; 2) loan performance in such relationship lending; and 3) the real impacts on bank efficiency and firm behaviors. Our study sheds light on credit allocation in China with the rise of private ownership in the banking sector.


  • Zhiguo He, Fuji Bank and Heller Professor of Finance, Booth School of Business
  • Zhuo Chen, Assistant Professor of Finance, Tsinghua University
  • Bibo Liu, Assistant Professor, Tsinghua University

On the Collateral Value of Land

Zhiguo He, Min Ouyang, Yang Su

Merging three large data sets on land transactions, on land pledge, and on firm registry, we investigate how sharp rises in China’s land prices observed during the past two decades have influenced borrowing and lending when land is used as collateral.


  • Zhiguo He, Fuji Bank and Heller Professor of Finance, Booth School of Business
  • Min Ouyang, Associate Professor, Tsinghua University
  • Yang Su, PhD candidate, Booth School of Business

Conflicts of Interest and Acquisition Premium

Zhiguo He, Guoqing Ge, Jian Xue

This project focuses on the conflicts of interest between governmental venture capitals (GVCs hereafter) and other shareholders of their investees. In June 2009, Chinese authorities jointly issued a policy on the transfer of state-owned shares to social security funds, which are projected to be under funded for a long time. Among many far-reaching consequences of this policy, it affects the VC industry in China, as part of the IPO firm’s state-owned shares should be transferred to the social security funds if the firm has state-owned shares. We argue that after the aforementioned transfer policy, the decrease in GVCs’ potential IPO exit profit could make GVCs lower their required profit from acquisition exits, which induces conflicts of interest among GVC, other private VC investors, as well as entrepreneurial firms.

  • Zhiguo He, Fuji Bank and Heller Professor of Finance, Booth School of Business
  • Guoqing Ge, PhD Candidate, Tsinghua University
  • Jian Xue, Associate Professor of Accounting, Tsinghua University

How to Sell a City: Demand Dynamics and the Land Supply Decisions of Chinese Local Governments

Scott Nelson, Anthony Lee Zhang, Fudong Zhang

This project will use microdata on the recent land sales in China at the parcel level to study two broad classes of questions. First, what is the elasticity of demand for land that local governments face? How does this vary over time and across geographic regions, and how does the elasticity arise from economic fundamentals, such as demographic structure and industrial composition, as opposed to market structure in the land development industry? Second, how do Chinese local governments appear to trade off different incentives in their land supply decisions? Do local governments appear to maximize revenues?


  • Scott Nelson, Assistant Professor Finance, Booth School of Business
  • Anthony Lee Zhang, Assistant Professor Finance, Booth School of Business
  • Fudong Zhang, Assistant Professor, Tsinghua University

The Chinese Production Network and the Incidence of the 2018-19 US-China Trade Conflict

Felix Tintelnot, Yi Lu

In this project we use firm-to-firm transaction data from VAT declarations to document new facts about the firm-to-firm production network in China. We examine the connections of local Chinese firms to foreign-owned firms and firms in export processing zones in China. Furthermore, we trace the indirect participation of firms in foreign trade through the firm-to-firm transaction data.


  • Felix Tintelnot, Assistant Professor, Kenneth C. Griffin Department of Economics
  • Yi Lu, Professor, Tsinghua University

Cross Subsidies on Electricity Use in China: Theory and Empirical Evidence

Shaoda Wang, Jing Cao

Cross-subsides on energy use is a unique phenomenon for some developing countries such as China. With over-capacity in electricity sector and on-going market reform on electricity pricing, such a cross-subsidy policy may be gradually phasing out. In this study, we propose to examine the behavior responses of households and plants under such a potential policy shock, and examine the likely welfare changes. Using China’s unique micro-level data on household electricity use collected by NBS, we will conduct a Jorgenson-Slesnick demand estimation, and De Loecker type of production function, to combine with structural modeling approach to examine the behavior elasticities of both households and firms. Finally, we will use a Chinese CGE model to examine the economy-wide impacts of the policy and estimate the welfare effects and policy incidents across households and firms.

  • Shaoda Wang, Incoming Assistant Professor, Harris School of Public Policy
  • Jing Cao, Associate Professor, Tsinghua University

Judicial Independence, Local Protectionism, and Economic Prosperity

Shaoda Wang, Yi Lu, Wenwei Peng

This project plans to provide the first rigorous empirical evidence on whether judicial independence could reduce local protectionism and foster economic growth. Specifically, we intend to answer four broad questions: (1) whether these two judicial independence reforms could indeed reduce local protectionism in local court rulings (increase the likelihood of winning lawsuits for firms from other cities); (2) how does winning a civil lawsuit (due to reduced local protectionism) affect firm performance; (3) whether a reduction in local protectionism makes firms from other cities more willing to press charges against local firms; (4) whether a reduction in local protectionism makes firms from other cities more willing to trade with the local firms, and to what extent would such increased firm-to-firm trade contribute to the entire Chinese economy.


  • Shaoda Wang, Incoming Assistant Professor, Harris School of Public Policy
  • Yi Lu, Professor, Tsinghua University
  • Wenwei Peng, PhD Candidate, Hong Kong University of Science and Technology

Regulatory Arbitrage and Shadow Central Banking

Michael Weber, Zhishu Yang, Qi Zhang

This project aims to document the regulatory arbitrage activities by large national commercial banks via the interbank market after the the People’s Bank of China (PBC) shifted the main channel of issuing M0 from foreign exchange collateral to open market operation in 2013. Furthermore, we plan to examine the impact of the stricter regulatory environment regarding interbank markets on the real economy in 2017.


  • Michael Weber, Associate Professor Finance, Booth School of Business
  • Zhishu Yang, Professor of Finance, Tsinghua University
  • Qi Zhang, Professor in Accounting and Finance, Durham University

Financial Behavior of College Students in China

Constantine Yannelis, Bibo Liu, Binzhen Wu, Ning Neil Yu

This project will utilize a unique opportunity to design and conduct a large-scale administrative survey to study the financial behavior of college students in China. In order to understand mechanisms behind financial decisions and assess the short-term and long-term impacts of those decisions, we plan to link survey data to other administrative data from both colleges and financial service providers, and study several prominent questions in household and behavioral finance. In particular, we seek to study whether college students make optimal borrowing choices, how social network influences leverage choices, and how student debt impacts career planning, among others.


  • Constantine Yannelis, Assistant Professor of Finance, Booth School of Business
  • Bibo Liu, Assistant Professor, Tsinghua University
  • Binzhen Wu, Associate Professor, Tsinghua University
  • Ning Neil Yu, Professor, Nanjing Audit University