Browsing by Author "Xie, Ru"

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  • Hasan, Iftekhar; Xie, Ru (2012)
    BOFIT Discussion Papers 8/2012
    Published in Emerging Markets Finance and Trade, Volume 49, Issue 2, 1 March 2013, Pages 4-18 as Foreign bank entry and bank corporate governance in China
    China employs a unique foreign bank entry model. Instead of allowing full foreign control of domestic banks, foreign investors are only permitted to be involved in the local banks as minority shareholders. At the same time, foreign strategic investors are expected to commit to bank corporate governance improvement and new technology support. In this context, the paper examines the effect of foreign strategic investors on Chinese bank performance. Based on a unique data set of bank ownership, performance, corporate governance and stock returns from 2003 to 2007, our regression and event study analysis results suggest that active involvement of foreign strategic investors in bank management have improved the corporate governance model of Chinese banks from a control based model to a market oriented model, and accordingly have promoted bank performance. JEL Classification Code: G21, G28, G34, F23 Keywords: China, Foreign Market Entry, Corporate Governance
  • Newton, David P.; Ongena, Steven; Xie, Ru; Zhao, Binru (2022)
    BOFIT Discussion Papers 5/2022
    Is bank- versus market-based financing different in its attitudes towards Environmental, Social, and Governance (ESG) risk? Using a novel sample covering 3,783 U.S. public firms from 2007 to 2020, we study how firm-level ESG risk affects its financing outcomes. We find that companies with higher ESG risk borrow less from banks than from markets, potentially to avoid bank monitoring and scrutiny. The Social and Governance components, in particular, matter. Furthermore, firms suffering higher numbers of negative ESG reputation shocks are less likely to continue to rely on bank credit in response to lenders' threats to end the lending arrangements. Finally, our results indicate that firms' ESG risk reduces after borrowing from banks but increases after bond issuance, suggesting that banks are more effective than public bond markets in shaping borrowers' ESG performance.
  • Gwilym, Owain Ap; Wang, Qvigwei; Hasan, Iftekhar; Xie, Ru (2013)
    Bank of Finland Research Discussion Papers 10/2013
    Published in European Financial Management, Volume 22, Issue 3, 1 June 2016: 427-449
    Using a novel proxy of investors' speculative demand constructed from online search interest in "concept stocks", we examine how speculative demand affects the returns and trading volume of Chinese stock indices. We find that returns and trading volume increase with the contemporaneous speculative demand. In addition, the high speculative demand causes lower near future returns, while recent high past returns cause the high speculative demand. Moreover, the speculative demand explains more variation in returns and trading volume of A shares (more populated by retail investors) than B shares (less populated by retail investors). Our findings support the attention theory of Barber and Odean (2008). Keywords: Investor Attention, Speculative Demand, Concept Stock, Market Returns, Trading Volume JEL: G02, G12, G14
  • Hasan, Iftekhar; Molyneux, Phil; Xie, Ru; Hakenes, Hendrik (2014)
    Bank of Finland Research Discussion Papers 5/2014
    Published in Review of Finance, Volume 19, Issue 2, 1 March 2015: 653-683
    This paper discusses the effects of small banks on economic growth. We first theoretically show that small banks operating at a regional level can spur local economic growth. As compared with big interregional banks, small regional banks are more effective in promoting local economic growth, especially in regions with lower initial endowments and severe credit rationing. We then test the model predictions using a sample of German banks and corresponding regional statistics. We find that small regional banks are more important funding providers in regions with low access to finance. The empirical results support the theoretical hypotheses. JEL Classification: G21, O16, R11. Keywords: small banks, regional economic growth.