{"id":{"repo_id":"cambridge","oai_identifier":"oai:www.repository.cam.ac.uk:1810/382853"},"canonical_url":"https://search.dev.ndltd.org/etd/cambridge/oai:www.repository.cam.ac.uk:1810/382853","repository":{"repo_id":"cambridge","name":"Cambridge University","base_url":"https://api.repository.cam.ac.uk/server/oai/request"},"display":{"title":"The Political Economy of Alternative Investments","abstract":"The growing concern surrounding modern political economy is especially evident as political uncertainty increasingly proves to be a critical factor in the global economy. Research on political uncertainty offers profound insights into organizational and human behavior, holding significant implications for policymaking and financial investment. Rather than viewing political uncertainty as mere chaos, a systematic review of its patterns can enhance my understanding of asset pricing and inform public policy development. Alternative assets, essential for mitigating systematic risk and promoting social welfare, are particularly vulnerable to political uncertainty due to their high heterogeneity and exposure to human behavior. These assets represent an emerging and increasingly significant investment market. By analyzing asset pricing trends and the contagion channels of uncertainty within alternative investment markets, I can gain a more comprehensive understanding of the impact of political uncertainty. This thesis investigates political uncertainty across two major alternative markets—real estate and carbon markets—exploring the link between market dynamics and human behavior, and assessing the tangible effects of political uncertainty. The first study examines the impact of anti-corruption measures on China's residential property market, focusing on condo sales data in Beijing from 2012 to 2018. While anti-corruption campaigns are intended to enhance social fairness and economic efficiency, they can also have unintended adverse effects on asset prices. The findings reveal that luxury condos, which previously commanded a 5% premium over standard condos, experienced a shift to a 10% discount following the anti-corruption announcement in December 2012, particularly in districts with significant government presence. This study adds to the political uncertainty literature by identifying waves of political shocks and linking them to asset price dynamics across different markets. The next two studies examine political uncertainty's influence on the carbon market—an area critical for climate policy given the global challenge of cooperation. The second study investigates the relationship between political uncertainty and both pricing and trading volume in China's carbon emissions trading systems (ETS) across four major markets (Beijing, Shanghai, Guangdong, and Hubei) between 2014 and 2022. Using logistic regression and AR(1)-GARCH estimations, the results show a negative relationship between political uncertainty and carbon trading volumes, with considerable variation in market responses. This study deepens my understanding of how ETS markets function amid complex and shifting political environments, offering valuable insights for policymakers working to design urban policies that promote sustainable development. Contrary to the view that alternative markets merely passively reflect political shocks, the third study demonstrates how market participants can actively influence political events through trading behavior. By focusing on the capacity of carbon markets to mitigate political uncertainty, this study explores how ETS addresses both government and market failures in emissions control. The findings suggest that cities tend to reduce emissions during inspections (“when the cat is around”) but relax their efforts during political leadership transitions (“when the cat is away”). However, cities with an ETS are less responsive to these political cycles, as the system imposes regulations on firms and curbs strategic behavior. Both theoretical and empirical evidence indicate that an efficient carbon market, characterized by a high carbon price, can simultaneously control emissions and dampen the effects of political shocks.","abstract_html":"The growing concern surrounding modern political economy is especially evident as political uncertainty increasingly proves to be a critical factor in the global economy. Research on political uncertainty offers profound insights into organizational and human behavior, holding significant implications for policymaking and financial investment. Rather than viewing political uncertainty as mere chaos, a systematic review of its patterns can enhance my understanding of asset pricing and inform public policy development. Alternative assets, essential for mitigating systematic risk and promoting social welfare, are particularly vulnerable to political uncertainty due to their high heterogeneity and exposure to human behavior. These assets represent an emerging and increasingly significant investment market. By analyzing asset pricing trends and the contagion channels of uncertainty within alternative investment markets, I can gain a more comprehensive understanding of the impact of political uncertainty. This thesis investigates political uncertainty across two major alternative markets—real estate and carbon markets—exploring the link between market dynamics and human behavior, and assessing the tangible effects of political uncertainty. The first study examines the impact of anti-corruption measures on China's residential property market, focusing on condo sales data in Beijing from 2012 to 2018. While anti-corruption campaigns are intended to enhance social fairness and economic efficiency, they can also have unintended adverse effects on asset prices. The findings reveal that luxury condos, which previously commanded a 5% premium over standard condos, experienced a shift to a 10% discount following the anti-corruption announcement in December 2012, particularly in districts with significant government presence. This study adds to the political uncertainty literature by identifying waves of political shocks and linking them to asset price dynamics across different markets. The next two studies examine political uncertainty's influence on the carbon market—an area critical for climate policy given the global challenge of cooperation. The second study investigates the relationship between political uncertainty and both pricing and trading volume in China's carbon emissions trading systems (ETS) across four major markets (Beijing, Shanghai, Guangdong, and Hubei) between 2014 and 2022. Using logistic regression and AR(1)-GARCH estimations, the results show a negative relationship between political uncertainty and carbon trading volumes, with considerable variation in market responses. This study deepens my understanding of how ETS markets function amid complex and shifting political environments, offering valuable insights for policymakers working to design urban policies that promote sustainable development. Contrary to the view that alternative markets merely passively reflect political shocks, the third study demonstrates how market participants can actively influence political events through trading behavior. By focusing on the capacity of carbon markets to mitigate political uncertainty, this study explores how ETS addresses both government and market failures in emissions control. The findings suggest that cities tend to reduce emissions during inspections (“when the cat is around”) but relax their efforts during political leadership transitions (“when the cat is away”). However, cities with an ETS are less responsive to these political cycles, as the system imposes regulations on firms and curbs strategic behavior. Both theoretical and empirical evidence indicate that an efficient carbon market, characterized by a high carbon price, can simultaneously control emissions and dampen the effects of political shocks.","abstract_has_math":false,"creators":["Tang, He"],"institution":"University of Cambridge","degree_name":"Doctor of Philosophy (PhD)","degree_level":"Doctoral","degree_discipline":null,"degree_department":null,"school":null,"contributors":[],"advisors":["Bao, Helen"],"committee_chairs":[],"committee_members":[],"year":2024,"date_issued":"2024-12-06","date_published":"2024-12-06","updated_at":"2026-07-22T22:24:24Z","subjects":["Political Economy","Alternative Investments"],"languages":["eng"],"rights":[],"rights_urls":["https://apollo8-f-pro.lib.cam.ac.uk/bitstreams/0e3c72c1-7657-4e13-8822-a333438cc124/download","http://purl.org/NET/rdflicense/allrightsreserved"],"identifier_entries":[]},"links":{"outbound_url":"https://doi.org/10.17863/CAM.117462","outbound_label":"DOI","outbound_source":"dc:identifier.doi"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor.advisor","label":"Advisor","values":["Bao, Helen"]},{"key":"dc:contributor.sponsor","label":"Sponsor","values":["CSC Cambridge Scholarship"]},{"key":"dc:creator","label":"Author","values":["Tang, He"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date.issued","label":"Date","values":["2024-12-06"]},{"key":"dc:publisher.institution","label":"Dc Publisher Institution","values":["University of Cambridge"]},{"key":"dc:relation.isreferencedby.uri","label":"Dc Relation Isreferencedby URI","values":["https://www.repository.cam.ac.uk/handle/1810/382853"]},{"key":"dc:type","label":"Dc Type","values":["Thesis"]},{"key":"dc:type.qualificationlevel","label":"Dc Type Qualificationlevel","values":["Doctoral"]},{"key":"dc:type.qualificationname","label":"Dc Type Qualificationname","values":["Doctor of Philosophy (PhD)"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Political Economy","Alternative Investments"]}]},{"id":"language_rights","label":"Language and Rights","entries":[{"key":"dc:language","label":"Dc Language","values":["eng"]},{"key":"dc:rights","label":"Dc Rights","values":["https://apollo8-f-pro.lib.cam.ac.uk/bitstreams/0e3c72c1-7657-4e13-8822-a333438cc124/download","http://purl.org/NET/rdflicense/allrightsreserved"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.doi","label":"DOI","values":["https://doi.org/10.17863/CAM.117462"]},{"key":"dc:identifier.uri","label":"Identifier URI","values":["https://apollo8-f-pro.lib.cam.ac.uk/bitstreams/ede2732d-51b0-4af6-b1f0-69bc22671dc2/download"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["The growing concern surrounding modern political economy is especially evident as political uncertainty increasingly proves to be a critical factor in the global economy. 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The next two studies examine political uncertainty's influence on the carbon market—an area critical for climate policy given the global challenge of cooperation. The second study investigates the relationship between political uncertainty and both pricing and trading volume in China's carbon emissions trading systems (ETS) across four major markets (Beijing, Shanghai, Guangdong, and Hubei) between 2014 and 2022. Using logistic regression and AR(1)-GARCH estimations, the results show a negative relationship between political uncertainty and carbon trading volumes, with considerable variation in market responses. This study deepens my understanding of how ETS markets function amid complex and shifting political environments, offering valuable insights for policymakers working to design urban policies that promote sustainable development. Contrary to the view that alternative markets merely passively reflect political shocks, the third study demonstrates how market participants can actively influence political events through trading behavior. By focusing on the capacity of carbon markets to mitigate political uncertainty, this study explores how ETS addresses both government and market failures in emissions control. The findings suggest that cities tend to reduce emissions during inspections (“when the cat is around”) but relax their efforts during political leadership transitions (“when the cat is away”). However, cities with an ETS are less responsive to these political cycles, as the system imposes regulations on firms and curbs strategic behavior. 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The first study examines the impact of anti-corruption measures on China's residential property market, focusing on condo sales data in Beijing from 2012 to 2018. While anti-corruption campaigns are intended to enhance social fairness and economic efficiency, they can also have unintended adverse effects on asset prices. The findings reveal that luxury condos, which previously commanded a 5% premium over standard condos, experienced a shift to a 10% discount following the anti-corruption announcement in December 2012, particularly in districts with significant government presence. This study adds to the political uncertainty literature by identifying waves of political shocks and linking them to asset price dynamics across different markets. The next two studies examine political uncertainty's influence on the carbon market—an area critical for climate policy given the global challenge of cooperation. The second study investigates the relationship between political uncertainty and both pricing and trading volume in China's carbon emissions trading systems (ETS) across four major markets (Beijing, Shanghai, Guangdong, and Hubei) between 2014 and 2022. Using logistic regression and AR(1)-GARCH estimations, the results show a negative relationship between political uncertainty and carbon trading volumes, with considerable variation in market responses. This study deepens my understanding of how ETS markets function amid complex and shifting political environments, offering valuable insights for policymakers working to design urban policies that promote sustainable development. Contrary to the view that alternative markets merely passively reflect political shocks, the third study demonstrates how market participants can actively influence political events through trading behavior. By focusing on the capacity of carbon markets to mitigate political uncertainty, this study explores how ETS addresses both government and market failures in emissions control. The findings suggest that cities tend to reduce emissions during inspections (“when the cat is around”) but relax their efforts during political leadership transitions (“when the cat is away”). However, cities with an ETS are less responsive to these political cycles, as the system imposes regulations on firms and curbs strategic behavior. 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