​This paper investigates if relationship lending and bank market concentration permit informational rent extraction through collateral. We use equity IPOs as informational shocks that erode rent seeking opportunities. Using unique loan data from China, we find collateral incidence increases...

China has a dual-track interest-rate system: bank deposit and lending rates are regulated while money and bond rates are market-determined. The central bank also imposes an indicative target, which may not be binding at all times, for total credit in the banking system. We develop and calibrate...

The conventional wisdom that housing prices are the present value of future rents ignores the fact that unlike dividends on stocks, rent is not discretionary. Housing price uncertainty can affect household property investments, which in turn affect rent. By extending the theory of investment...

By allowing large classes of movable assets to be used as collateral, the Property Law reform trans-formed the secured transactions in China. Difference-in-differences tests show firms operating with ex-ante more movable assets expand access to bank credit and prolong debt maturity. However, the...

The financial market provides a mechanism for aggregating information of heterogeneous traders, who have different beliefs, knowledge and trading strategies. This paper studies the interactions between heterogeneous traders and their impacts on price discovery by developing a pricing model for...