Refine
Document Type
- Working Paper (2)
Language
- English (2)
Has Fulltext
- yes (2)
Is part of the Bibliography
- no (2)
Keywords
- property rights (2) (remove)
Resolving financial distress where property rights are not clearly defined: the case of China
(2022)
We use data on financially distressed Chinese companies in order to study a debt market where property rights are crudely defined and poorly enforced. To help with identification we use an event where a business-friendly province published new guidelines regarding the administration and enforcement of assets pledged as collateral. Although by no means a comprehensive reform of bankruptcy law or property rights, by instructing courts to enforce existing, albeit rudimentary, contractual rights the new guidelines virtually eliminated creditors runs and produced a sharp increase in the survival rate of financially-distressed companies. These changes illustrate how piecemeal reforms of property rights and their enforcement may have a significant impact on economic outcomes. Our analysis and results challenge the view that a fully fledged system of private property is a precondition for economic development.
While record-making prices at art auctions receive headline news coverage, artists typically do not receive any direct proceeds from those sales. Early-stage creative work in any field is perennially difficult to value, but the valuation, reward, and incentivization for artistic labor are particularly fraught. A core challenge in studying the real return on artists’ work is the extreme difficulty accessing data from when an artwork was first sold. Galleries keep private records that are difficult to access and to match to public auction results. This paper, for the first time, uses archivally sourced primary market records, for the artists Jasper Johns and Robert Rauschenberg. Although this approach restricts the size of the data set, this innovative method shows much more accurate returns on art than typical regression and hedonic models. We find that if Johns and Rauschenberg had retained 10% equity in their work when it was first sold, the returns to them when the work was resold at auction would have outperformed the US S&P 500 by between 2 and 986 times. The implication of this work opens up vast policy recommendations with regard to secondary art market sales, entrepreneurial strategies using blockchain technology, and implications about how we compensate creative work.