BNU Business School Young Teachers Xu Hui, Xu Minbo, Dai Mi and Chen Jidong have published papers in top international academic journals: “Economic Development and Cultural Change”, “Review of Industrial Organization”, “Journal of Development Economics” and the “American Journal of Political Science”. See following for details.

Trust under the Prospect Theory and Quasi-Hyperbolic Preferences: A Field Experiment in Vietnam

Quang Nguyen, Marie Claire Villeval, Xu Hui

Economic Development and Cultural Change

Vol 64(3): 545–572, 2016

Abstract:

We conduct a field experiment in Vietnamese villages to explore the effect of the prospect theory and of quasi-hyperbolic time preferences parameters on trust and trustworthiness. We find that risk aversion, loss aversion, and present bias do not influence trustors’ decisions, but higher time discounting increases the amount sent to trustees in the south of Vietnam and probability weighting decreases it in the north. If time discounting and loss aversion do not influence trustworthiness, we show that more risk-averse and less present-biased trustees return a higher share of their wealth to the trustors. These results suggest that adopting a perspective other than the expected utility theory and the exponential-discounting approach of time preferences enables one to uncover some channels by which risk and intertemporal time preferences influence trusting behavior in societies.

Empirical Evidence on Competition and Revenue in an All-Pay Contest

Zhongmin Wang, Xu Minbo

Review of Industrial Organization

pp 1-20

First online: 23 March 2016

Abstract:

The total revenue from an “all-pay contest” is the sum of expenditures from all individual players, so it is important to ask whether it increases with the number of actual players—which is our definition of competition. This is the first paper to use field data to study this question empirically. Using novel instrumental variables, we document strong empirical evidence that the revenue of a penny auction—which is a form of all-pay contest that recently emerged on the Internet—increases with the number of bidders. Our findings cast doubt on the standard model of all-pay contests that presumes that all bidders are fully informed.

Unexceptional Exporter Performance in China? The Role of Processing Trade

Dai Mi, Madhura Maitra, Miaojie Yu

Forthcoming, Journal of Development Economics

Abstract:

The firm level trade literature finds that exporters are exceptional performers for a wide range of countries and measures. Paradoxically, the one documented exception is the world's largest exporter, China. This paper shows that this puzzling finding is entirely driven by firms that engage only in export processing---the activity of assembling tariff-exempted imported inputs into final goods for resale in foreign markets. We find that processing exporters are less productive than non-processing exporters and non-exporters, and have poor performance in many other aspects, such as profitability, wages, R&D, and skill intensity. Accounting for processing exporters explains the abnormality in exporter performance in China that has been documented in the previous literature. Low fixed costs of processing exporting and the trade and industrial policies favoring processing exporters are responsible for the low productivity of processing exporters. Our findings suggest that distinguishing between processing and non-processing exporters is crucial for understanding firm-level exporting behavior in China. The findings also provide caveats in analyzing exporter performance in other developing countries that are highly integrated into global value chains.

Sources of Authoritarian Responsiveness: A Field Experiment in China.

Chen Jidong, Jennifer Pan and Yiqing Xu

American Journal of Political Science

Vol 60(2): 383-400, 2016

Abstract:

A growing body of research suggests that authoritarian regimes are responsive to societal actors, but our understanding of the sources of authoritarian responsiveness remains limited because of the challenges of measurement and causal identification. By conducting an online field experiment among 2,103 Chinese counties, we examine factors that affect officials' incentives to respond to citizens in an authoritarian context. At baseline, we find that approximately one-third of county governments respond to citizen demands expressed online. Threats of collective action and threats of tattling to upper levels of government cause county governments to be considerably more responsive, whereas identifying as loyal, long-standing members of the Chinese Communist Party does not increase responsiveness. Moreover, we find that threats of collective action make local officials more publicly responsive. Together, these results demonstrate that top-down mechanisms of oversight as well as bottom-up societal pressures are possible sources of authoritarian responsiveness.

(Article submission: Bao Wen)