Wenxuan Hou

Wenxuan Hou
The University of Edinburgh | UoE · Business School

PhD

About

169
Publications
20,358
Reads
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1,961
Citations
Citations since 2017
69 Research Items
1641 Citations
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20172018201920202021202220230100200300400500
20172018201920202021202220230100200300400500
20172018201920202021202220230100200300400500

Publications

Publications (169)
Article
In this study we investigate the effect of female director on corporate social responsibility (CSR) by taking the advantage of the introduction of legal gender quota that led to the exogenous change in the female representation in corporate board around the world. We find that the “gender quote” reforms effectively increase gender diversity and imp...
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This study revisits the question of “whether firms are doing well by doing good?”. We examine shareholders-sponsored corporate socially responsible (CSR) proposals related to Environmental, Social, and Governance (ESG) that are voted to pass or fail by a small margin. The adoption of those “close call” proposals is regarded as equivalent to a rando...
Article
This paper examines the impact of anti-market culture on a firm's environmental and social (E&S) outcomes. We use the varying degree of intensity of historical anti-Jewish pogroms in 20 European countries as a quasi-exogenous measure of anti-market sentiment. We show that the historical occurrence of anti-Jewish pogroms in Eastern Europe during the...
Article
Rumors are common in capital markets and firms face a strategic decision of whether or not to respond to them. This research explores the implications of official response to rumors and find that responded firms tend to experience enforcement actions against corporate fraud and lawsuits. The results are concentrated on private firms. Our results ar...
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As fundamental data, gross domestic product (GDP) and electricity consumption can be used to effectively evaluate economic status and living standards of residents. Some scholars have estimated gridded GDP and electricity consumption. However, such gridded data have shortcomings, including overestimating real GDP growth, ignoring the heterogeneity...
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Global warming is one of the largest challenges humankind is facing in this century, and how to achieve low-carbon economy has become one of the most attractive topics of global concern. However, evaluations of the low-carbon economy are insufficient due to limited methodologies and data availability. In this study, satellite data (i.e., night-time...
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A decade after the 2007–2009 financial crisis, the covid-19 pandemic causes disruptive economic conditions and its uncertain nature makes the formulation of macroeconomic policy response challenging. Meanwhile, extreme weather and natural disasters linked to climate change become more frequent and adversely affect the economy. These challenges high...
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Achieving carbon neutrality depends on carbon emission reduction and sequestration. However, research on vegetative carbon sequestration in China remains preliminary. In this study, we calculated the total carbon sequestration of terrestrial vegetation and that of different vegetation types in China from 2001–2019 using satellite data. Total vegeta...
Article
Firms in transition economies often suffer financial constraints. In initial public offerings (IPOs), however, many newly listed Chinese firms raise funds in excess of what is originally planned. This paper examines whether these excess IPO funds are wasted on value-destroying spending or enable firms to take growth opportunities. After controlling...
Article
This paper examines the impact of historical endowment on the Initial Coin Offering (ICO) market. Leveraging a sample of 1,617 hand collected ICOs over 2015-2019 and regressions models, we find that a country's legal origin, disease environment, exposure to slave trade, and proximity to ancient trade routes are important determinants of the total a...
Article
We study the impact of an epidemic disease on modern financial development by exploiting geographic variations in the precolonial survival conditions of the TseTse fly, which transmits an epidemic disease that is harmful to humans and fatal to livestock in Africa. Using newly georeferenced data, we discover that firms and households in regions hist...
Article
There is a global consensus that carbon dioxide and other greenhouse gas emissions must be reduced as a response to global climate change. Remote sensing satellite data have become an important means of monitoring carbon emission due to its unique advantages such as availability, high resolution, and wide coverage, and remote sensing data are playi...
Article
Research and development (R&D)-intensive firms have strong incentives to maintain a smooth path for their R&D investments; otherwise, they will incur high adjustment costs. Examining data covering 2009 to 2016, we find that Chinese R&D-intensive firms, especially those with high innovation efficiency, tend to sell operating and financial assets to...
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Accurate, long-term, full-coverage carbon dioxide (CO 2 ) data in units of prefecture-level cities are necessary for evaluations of CO 2 emission reductions in China, which has become one of the world’s largest carbon-emitting countries. This study develops a novel method to match satellite-based Defense Meteorological Satellite Program’s Operation...
Article
This paper reviews the growing literature on initial coin offerings (ICOs) and provides original evidence of the investor protection on ICOs from 37 countries. We show that the anti-director rights and anti-self-dealing index are positively associated with the country-level raised fund of ICOs after controlling for economic and culture factors. The...
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The diseases does not only affect development through contemporaneous impacts on health but also through its historical effect on shaping culture and institutions. By drawing the experience from historical pandemics, we argue that some stringent approaches to combat Covid-19 are at the expense of social capital (trust) and institutions (checks agai...
Article
Although energy technological progress has been regarded as an important driver for reducing carbon emissions, the existence of carbon rebound effect prevents a portion of the potential carbon reductions to be realized. Compared with the energy rebound effect, research on the carbon rebound effect is scarce because it is always equated with the ene...
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With the implementation of China’s top-down CO2 emissions reduction strategy, the regional differences should be considered. As the most basic governmental unit in China, counties could better capture the regional heterogeneity than provinces and prefecture-level city, and county-level CO2 emissions could be used for the development of strategic po...
Article
This paper examines the impact of cyber risks on ventures’ initial coin offerings (ICOs) results. We match novel data on national cybersecurity with hand collected characteristics of 1,654 ICO projects and discover that cyber risks are negatively associated ICO success. We further find that institutional quality, such as the protection of investor...
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This paper studies the impact on firm value of tighter checks on bureaucrats’ behaviour. We use as a natural experiment the revision in 2015 by the Communist Party of China (CPC) of its regulations on disciplinary actions. We document a positive and substantial market reaction following this unexpected policy change that tightened and formalised co...
Article
Theoretical work suggests an ambiguous relationship between the strength of institutions and the distribution of access to finance. Using a sample of listed firms from 70 countries, this study constructs country-level measures of inequality in access to external finance, and explores its relation to institutions. We show that inequality of access i...
Article
Shadow prices of undesirable outputs assess the opportunity costs of emissions reduction and provide a comprehensive measuring indicator for the overall environmental regulation stringency. Shadow prices of industrial air pollutant emissions in China for 2006–2016 have been estimated by different nonparametric models, and their determinants, as wel...
Article
This study estimates the effects of wars on countries and firms. We first show immediate negative effects of wars on economic and financial development as well as legal institutions. Using a cross-country sample of 93,697 firm-year observations, we further argue and show that (i) wars increase the supply of military directors in corporate boards; a...
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This paper examines listing location as a managerial decision by using a sample of IPOs of Chinese entrepreneurial firms in mainland China, the United States and Hong Kong. We find that Chinese entrepreneurial firms managed by CEOs with international experience are more likely to undertake foreign IPOs, especially those returned from countries with...
Article
This study proposes a new approach to analyse the effects of an overlap term on the calculation of the overall Gini coefficient and estimates China’s Gini ratios since the adoption of the economic reform and open-door policies. A decomposition of the Chinese Gini coefficient for 1978–2010 reveals that the key factor contributing to income inequalit...
Article
China’s financial development and economic growth is achieved under weak legal institutions. The literature attributes this counterexample of law–finance–growth nexus to (a) alternative mechanisms in China such as incentives, reputation and relationships and (b) a well-functioning xinfang system with common law features. In recent years, China has...
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Based on the turnover data of provincial party committee secretaries in China between 2000 and 2008, we find that the loan increment of local SOEs (state-owned enterprises) decreases by 18.9% in turnover years. We also document increased efficiency of long-term loans in turnover years. The effects of provincial leader turnover on bank loans only ex...
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Informal finance plays an important role in transitional economies with weak legal institutions, such as China. As a major informal finance instrument, trade credit relies on informal institutions and enforcement. The paper argues that religion enhances the ethical climate in which firms do business, and it predicts that religiosity increases trade...
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The role of board secretaries is a unique institutional feature in China. Individuals in this senior executive role are responsible for coordinating information disclosure. We study the impact of board secretaries on management earnings forecasts and find that their legal expertise, accounting expertise and foreign experience help improve managemen...
Article
This study examines the relation between the athletic experience of board directors and corporate outcomes. We predict that athletes’ attributes, such as physical fitness, mental resilience, leadership, and team-working skills, enhance their monitoring role. Using a large sample from 71 countries, we find that athletic experience is associated with...
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This paper investigates the integrity of financial analysts by examining their recommendation responses to large quarterly earnings surprises. Although there is no significant difference in recommendation changes between affiliated and unaffiliated analysts in response to positive earnings surprises, affiliated analysts are more reluctant than unaf...
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Based on the data of the BP Statistical Review of World Energy, this paper constructs the consumption and import–export of natural gas identities. It discusses the drivers of changes in global natural gas consumption and trade flows from 2008 to 2015 using the extended logarithmic mean Divisia index. The results show that differences in the natural...
Article
We use search volume index (SVI) for a CEO's name and stock ticker from Google Trends to measure CEO publicity, and examine the competing hypotheses on its relation to tax avoidance. On the one hand, CEOs who receive more attention from retail investors may engage in tax evasion activities to meet investors' performance expectations; on the other h...
Article
This paper studies the price implication of media censorship in the context of the long-standing foreign share discount puzzle in China. We conjecture that the government censors negative news and promotes positive news in Chinese media, leading to the premium on A-shares, which are mainly traded by domestic investors. We find that the ratio of pos...
Article
Prior research documents that nonfinancial firms resort to more real activities management when their ability to manage accruals is constrained by specialist auditors (e.g., Chi, Lisic, and Pevzner 2011; Burnett, Cripe, Martin, and McAllister 2012). Within the context of banks’ real activities management through repurchase agreements (repos), we ar...
Book
This edited collection presents recent developments, practical innovations, and policy reforms in the realm of microfinance in emerging markets. Microfinance has been hotly debated by ever-colliding camps of ardent supporters, who believe that microfinance addresses credit market failures and provides a durable answer to the problem of the poverty,...
Article
This paper investigates the impact of legal institutions on the external governance role of equity analysts in enhancing the corporate information environment. By analysing a sample of Chinese listed firms between 2003 and 2013, we find that analyst coverage is positively related to stock price informativeness. Firms located in provinces where lega...
Article
This paper investigates the short-run price performance of venture capital trust (VCT) initial public offerings (IPOs). We find a very small positive first-day market-adjusted average abnormal return of 0.056% for VCT IPOs. This positive return is non-existent at the end of the seventh and twenty-first trading days. The abnormal returns for VCT IPO...
Chapter
Microfinance drew attention to itself beginning the day it was born. From day one, its fate was hotly debated by ever-colliding camps of ardent supporters and staunch critics. In this chapter, we provide an in-depth discussion on microfinance revolution and promise. We summarize the highlights of the growing literature on microfinance that have acc...
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This paper examines the role of cross-listing in stock return dynamics with particular reference to feedback trading based on a sample of five most frequently traded cross-listed shares. We find that a long-run equilibrium relationship among the cross-listed share prices exists, but find no evidence of long-run co-movements among different shares t...
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Following the financial crisis and recent recession, the center of gravity of global economic growth and competitiveness is shifting toward emerging economies. As a leading and increasingly influential emerging economy, China is currently attracting the attention of academics, practitioners, and policy makers. There has been an increase in research...
Article
This paper examines the impact of analyst coverage on the financial reporting quality of firms as reflected by modified audit opinions (MAOs). Using a sample of Chinese listed firms between 2003 and 2009, we find that analyst coverage, which serves as an external governance mechanism, helps to enhance the financial reporting quality of Chinese list...
Article
The pay-performance sensitivity (PPS) of managers of closed-end funds is explicitly specified in their contracts as the marginal rate of the funds' net asset value. Using a sample of US closed-end funds from 2006 to 2009, this paper investigates the relationship between the PPS and risk-taking behaviors of fund managers. After controlling for endog...
Article
This paper examines the cost and profit efficiency of four types of Chinese commercial banks over the period from 2002 to 2013. We find that the cost and profit efficiencies improved across all types of Chinese domestic banks in general and the banks are more profit-efficient than cost efficient. Foreign banks are the most cost efficient but the le...
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The split share structure reform in China enables state shareholders of listed firms to trade their restricted shares. This renders the wealth of state shareholders more strongly related to share price movements. We predict that this reform will create remuneration arrangements that strengthen the relationship between Chinese firms’ executive pay a...
Article
Venture capital trusts (VCTs) were introduced to provide private equity capital for small expanding companies and to promote innovation. Investors in initial public offerings are rewarded with tax relief on the cost of lock-up provisions to stabilize the market. This paper examines the market reaction and trading activity around the expiration of l...
Article
This study reviews family business in mainland China from 1872 to 1949 and provides evidence of its early development and its origins in 1872 when the first modern manufacturing firm was founded. We analyse the social, economic, and political environment in which family firms in mainland China were embedded to improve our understanding of how this...
Book
Developments in Chinese Entrepreneurship offers empirical evidence from cutting-edge research into the experiences and challenges of entrepreneurial activities and small business issues within China. As a leading emerging country, the entrepreneurial landscape in China provides useful insight for other developing economies in the areas of:• Entrepr...
Article
When systematic risk is high, or the market crashes, most risk-averse investors choose to exit the market; however, there are some contrarian investors who opt to make investments. We model such contrarian behaviors by incorporating investors' expectations of government policies into the conventional risk–return trade-off framework. We show that wh...
Chapter
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Banks play a central role in the financial system and also in the real economy, as the 2008 financial crisis has vividly illustrated. The measurement of banking performance has gained importance for both policy makers and practitioners in relation to their decision making. Hence, empirical assessment of the efficiency of banking institutions has re...
Chapter
The media, such as newspapers and TV broadcasting, serves as an important outlet for disseminating information to the general public. Because information covered in the media could be obtained from other sources, such information is regarded as “stale information” (Tetlock, 2008) or “second-hand information” (Davies and Canes, 1978). According to t...
Chapter
Rent-seeking behavior is prevalent around the world, especially in emerging markets where the governance institution is weak. Although political rent-seeking behavior imposes negative effects on the national economy and the total wealth, firms still enjoy benefits derived directly from political connections. Previous literature provides evidence th...
Chapter
This study aims to introduce and investigate the different aspects and influences of the split-share-structure reform (SSSR) of China’s stock market so as to draw a complete picture of this important event in contemporary China, the largest transition economy in the world. Before the SSSR in 2005, there were two types of shares, namely tradable sha...
Article
Full-text available
We use the search volume index (SVI) of the stock ticker provided by Google Trends to capture the active attention that retail investors pay to stocks. Based on the analysis of S&P 500 stocks from 2004 to 2009, we show that the majority of the variation in SVI cannot be explained by passive attention measures, including Google News coverage and adv...