Suspension 2.0: Segregated Development, Financial Speculation, and Waiting among Resettled Peasants in Urban China

Since the late 2000s, many rural-to-urban migrants in China have lost their rural land to development plans, resettled in designated areas, and acquired formal urban residency. They stopped migrating, and have apparently ended their life of "suspension," namely protracted mobility. While most existing research literature on this population foregrounds the issue of land dispossession, this article argues that, following resettlement, these former migrants' lives can be more accurately characterized as a state of suspension instead of dispossession. Many resettled young adults, while having secured livelihood thanks to state compensation, are excluded from the technology- and capital-intensive developments to which they have lost their land. Some of these young people instead became petty speculators and rentier capitalists by liquidating their compensated assets through mortgages, private lending, rent, and other financial means. They are constantly waiting for the next investment opportunity and windfall gain. Although physically settled down and economically secure, they remain anxious and unsettled. They continue to orient their lives towards an elusive future rather than striving to transform the here and now, thus living in a state that I call "suspension 2.0."

Political Cycles in Bank Lending to the Government

We study how political party turnover after German state elections affects banks’ lending to the regional government. We find that between 1992 and 2018, party turnover at the state level leads to a sharp and substantial increase in lending by local savings banks to their home-state government. This effect is accompanied by an equivalent reduction in private lending. A statistical association between political party turnover and government lending is absent for comparable cooperative banks that exhibit a similar regional organization and business model. Our results suggest that political frictions may interfere with government-owned banks’ local development objectives.

Earnings management prior to private debt issuance

Purpose The purpose of this paper is to evaluate the extent to which firms manage earnings prior to private debt issuance. Design/methodology/approach This is an empirical archival research paper using financial statement data and data related to private debt issuance. Findings The results indicate that, on average, firms engage in income-increasing earnings management in the period prior to a new private debt issuance. In addition, it was found that this income-increasing earnings management is limited to firms which have engaged in income-increasing earnings management to a greater extent in prior years. Research limitations/implications This paper provides insight into how managers’ balance competing incentives to use income-increasing earnings management to obtain more favorable lending terms, and to use income-decreasing earnings management to reduce the risk of a future debt covenant violation. The results indicate that firms’ incentive to use income-increasing earnings management dominates. However, reputational concerns significantly constrain firms’ earnings management decisions prior to private debt issuance. Originality/value The paper fills a notable void in the literature by investigating firms’ earnings management activity prior to private lending agreements, and thereby provides new insights into both the relation between private debt and accounting quality, and the literature investigating the use of earnings management to avoid debt covenant violations.

Dynamic Cross-Correlations between Participants’ Attentions to P2P Lending and Offline Loan in the Private Lending Market

In this paper, we examine the dynamic cross-correlations between participants’ attentions to the P2P lending and offline loan (lending) with the method of multifractal detrended cross-correlation analysis (MF-DCCA). The empirical result mainly shows that (1) the power-law cross-correlation exists between participants’ attentions to the P2P lending and offline loan and is persistent, (2) the cross-correlation is more stable in the short term, and (3) the relation subjected to a small fluctuation is more cross-correlated than that under larger ones. Furthermore, we carry out the robustness test to verify the result. The Granger causality test indicates that participants’ attentions to P2P lending and offline loan Granger cause each other in the short term.