Biography

Jianxin (Donny) Zhao completed his PhD in business administration at the University of North Carolina at Chapel Hill in 2017. His primary research interests include debt markets, financial accounting, distributional forecasting, and social networks. Professor Zhao's work has appeared in premier academic journals such as the Journal of Financial Economics, the Journal of Accounting and Economics, and Management Science.

Education

  • PhD in Business Administration
    University of North Carolina at Chapel Hill
  • B in Commerce
    University of Melbourne
  • B in Commerce
    Curtin University of Technology
  • B in Management
    Dongbei University of Finance & Economics

The Rise of U.S. - Listed VIEs from China: Balancing State Control and Access to Foreign Capital

CLS Blue Sky Blog
March 6, 2018
We investigate Chinese firms’ use of variable interest entities (VIEs) to evade Chinese regulation on foreign ownership and list in the U.S. We find that the use of VIEs for such ends is widespread, growing, and associated with valuation discounts of as much as 30 percent relative to Chinese non-VIE firms listed in the U.S. The discount varies predictably with events that change the risk of government intervention and managerial malfeasance, and is tempered by better oversight and lower regulatory risk. To protect shareholders, VIE firms are more likely to have these characteristics as well as to curry government favor by contributing to disaster relief and hiring excess employees.