The Chinese banking sector is one crucial factor of the countrys transition towards a market economy. Financial intermediation - the channelling of bank deposits into investment projects - is one of its main tasks. Economic theory finds that without a hard budget constraint for banks the efficient monitoring of credit users implementing such investments is not assured. In China, however, the legacy of socialist directed lending practices still impacts the risk taking of financial intermediaries. Major banks expect government to bail them out in case of financial failure. Such bail-out...

Socially desirable responding (SDR) is an often-reported source of bias in survey interviews. It describes the tendency of a respondent to answer in a way that is socially desirable rather than to answer truthfully. This response bias also threatens the reliability and validity of survey-based environmental valuation techniques such as the Contingent Valuation Method (CVM). Therefore, the study deals with the assessment of the conditions for the occurrence of SDR in CVM interviews. A behavioral model is devised to take into account a set of factors triggering SDR responses. The impact of...