Jianxin (Donny) Zhao completed his PhD in business administration at the University of North Carolina at Chapel Hill in 2017. Before coming to Emory, Zhao held positions at the University of North Carolina. His primary research interests include debt markets, financial accounting, social networks, and corporate governance.
PhD in Business AdministrationUniversity of North Carolina at Chapel Hill
B in CommerceUniversity of Melbourne
B in CommerceCurtin University of Technology
B in ManagementDongbei 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.