Essays on tunneling, investor protection, and ownership concentration

Tunneling behavior, which is defined as the transfer of assets and profits out of a firm for the benefit of the firm's controlling shareholders, has become the focus of increasing attention in the theoretical and empirical literature. There are some corporate governance procedures, however, that help to protect investors against tunneling. This paper applies agency theory to study how the two basic mechanisms - legal protection on investor rights and ownership concentration - work together to constrain tunneling in a system of corporate governance. Analytical results in this paper show that tunneling is negatively related to the effectiveness of investor protection, while the relation between tunneling and ownership concentration is non-monotonic because both outcomes are determined by fundamentals including the effectiveness of investor protection, firm return and volatility of return, firm size, controllers' attitude towards risk, etc.After describing the theoretical framework in detail, the rest of the dissertation is taken up in assembling and assessing various pieces of evidence to see whether or not the predictions from the model are consistent with empirical evidence. I discuss several well-known cases of tunneling in the U.S. and Western European countries to show how tunneling happens in developed countries with good law enforcement and how tunneling is treated differently by different legal systems.The model makes several predictions about the determinants of corporate ownership concentration that are examined empirically. I study both cross-country and within-country variations in corporate ownership concentration with two newly constructed data sets. The first dataset contains 3875 public companies across states in the U.S. over a 10-year period (1992~2002) and the second dataset covers 1070 stock companies across 45 countries (regions) in a 10-year period (1992~2002). I find that corporate ownership concentration varies systematically with the effectiveness of investor protection and with firm-specific fundamentals such as firm size, firm return, and volatility of firm return in ways that are consistent with the model's predictions.JEL classification: G34; G32; D23; K49; L25; O5

Do bank loans and local amenities explain Chinese urban house prices?

Using Chinese city-level data from 1999 to 2012 and considering geological, environmental, and social diversity, this study suggests that credit plays a significant role in driving up house prices after the Great Recession, whereas property prices only influence bank lending before 2008. Besides, local amenities such as higher education, green infrastructure, healthcare, and climate also positively affect house prices. Moreover, the impacts of bank loans and amenities on housing prices are interacted rather than isolated

Judicial quality, contract intensity and trade: Firm-level evidence from developing and transition countries

Using firm-level data from 28 developing and transition countries, we investigate how judicial quality affects firm exports through relationship-specific investment. We find that a good legal system significantly increases exports among firms that use more customized goods as intermediate inputs. We control for potential reverse causality using propensity score matching. Our main results are robust to the use of different econometric methods.Contract intensity Institutions International trade

Do bank loans and local amenities explain Chinese urban house prices?

Based on Chinese city-level data from 1999 to 2012 and controlling for geological, environmental, and social diversity, our multi-step estimation suggests that credit plays a significant role in driving up house prices after the Great Recession, whereas property prices only influence bank lending before 2008. Local amenities such as higher education, green infrastructure, healthcare, and climate also positively affect house prices. Moreover, the impacts of bank loans on housing prices tend to be related to the level of amenities, suggesting that pooling macroeconomic and urban economic data may be important for housing market research in the future. (C) 2015 Elsevier Inc. All rights reserved

Evidence of Construct Validity of Computer-Based Tests for Clinical Reasoning: Instrument Validation Study

BackgroundClinical reasoning (CR) is a fundamental skill for all medical students. In our medical education system, however, there are shortcomings in the conventional methods of teaching CR. New technology is needed to enhance our CR teaching, especially as we are facing an influx of new health trainees. China Medical University (CMU), in response to this need, has developed a computer-based CR training system (CMU-CBCRT). ObjectiveWe aimed to find evidence of construct validity of the CMU-CBCRT. MethodsWe recruited 385 students from fifth year undergraduates to postgraduate year (PGY) 3 to complete the test on CMU-CBCRT. The known-groups technique was used to evaluate the construct validity of the CBCRT by comparing the test scores among 4 training levels (fifth year MD, PGY-1, PGY-2, and PGY-3). ResultsWe found that test scores increased with years of training. Significant differences were found in the test scores on information collection, diagnosis, and treatment and total scores among different training years of participants. However, significant results were not found for treatment errors. ConclusionsWe provided evidence of construct validity of the CMU-CBCRT, which could determine the CR skills of medical students at varying early stage in their careers