MSQF Professor Jennifer N. Carpenter's article published on JFE - "The real value of China's stock market"

February 23, 2021

Professor Jennifer N. Carpenter from NYU Stern School of Business co-authored the article "The real value of China's stock market", which is recently published on the Journal of Financial Economics (JFE), the leading peer-reviewed academic journal covering theoretical and empirical topics in financial economics. Starting from Spring 2021, Professor Carpenter will be teaching Debt Instruments & Markets at MS in Quantitative Finance program.

prof jennifer

Jennifer N. Carpenter – Professor of Finance

Jennifer N. Carpenter is a professor of finance at New York University Stern School of Business. She is best known for her pioneering research on executive stock options and managerial risk incentives and is increasingly recognized for her developing expertise on China’s evolving financial system. She has published in numerous journals including the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies. Professor Carpenter is associate director of the Stern Center for Global Economy and Business and Coordinator of its China Initiative, where she runs a monthly China research seminar and organizes regular conferences. 

Research Interests

  • China's financial system
  • Managerial compensation
  • Fixed income

Courses Taught (at NYU Stern School of Business)

  • Debt Instruments and Markets
  • Financial Theory IV: Continuous-Time Finance
  • Social Impact Core: Business and Its Publics

"The real value of China’s stock market"

Counter to perception, stock prices in China have become as informative about future profits as they are in the US. This rise in stock price informativeness has coincided with an increase in investment efficiency among privately owned firms, suggesting the market is aggregating information and providing useful signals to managers. However, price informativeness and investment efficiency for state-owned enterprises fell below that of privately owned firms after the post-crisis stimulus, perhaps reflecting unpredictable subsidies and state-directed investment policy. Finally, evidence from realized returns suggests Chinese firms face a higher cost of equity capital than US firms. In this article, Professor Carpenter gave a thorough analysis of how China’s stock market plays a capital allocation role in the global market.

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