Publications:

1. Securities Auctions with Pre-project Information Management, with Ho-Po Crystal Wong, 2023, International Journal of Industrial Organization, 88, 102929. [Online Appendix][Slides] 

Performance-sensitive securities distort incentives to acquire information to address cost overruns and false cancellations. As pre-project information is essential for success, a debt auction is optimal for selling the right to develop a project.

2. Optimal Short-Termism, with Dirk Hackbarth and Alejandro Rivera, 2022, Management Science, 68(9), 6477-6505. 

[Slides][ECGI][VoxEU]
Debt-equity conflicts induce excessive short-termism, which is a substantial part of the agency cost of debt quantitatively. Levered firms with impatient shareholders and grim growth prospects endogenously shorten the horizon of investment policies.

3. Credit Default Swaps and Debt Overhang, with Jin Yu, 2022, Management Science, 68(3), 2069-2097.
   Debt investors who have hedged with CDS and benefit from firm bust are empty creditors. CDS protection implies negative real effects through the empty-creditor channel: it delays project investment, reduces asset growth, and increases levered equity return volatility.

4. Dynamic Agency and Endogenous Risk-Taking, 2019, Management Science, 65(9), 4032-4048.
   High-powered incentives motivate effort as well as risk-taking. In a dynamic contracting model, I show that inefficient downside risk-taking emerges as an optimal outcome when the agent has insufficient skin in the game.

Working Papers:

1. Intermediary Capital and Financing Sustainable Investment, with Jin Yu. [Slides]
   - Manulife Investment Bank X Aberdeen ESG-Sustainable Investment and Development Paper Award
   Socially responsible funds promote sustainable investment by actively monitoring and providing green firms with cheaper financing. Market competition for social capital limits pledgeability, and carbon taxes and green subsidies may backfire.

2. Present Bias: Understanding Zero Leverage Policy and Unstable Capital Structure, with Yuan Li and Siqi Zhao. R&R at the Journal of Mathematical Economics.

3. Agency, Corporate Liquidity, and Optimal Investment Horizon, with Siqi Zhao

4. Leverage Dynamics under Managerial Discretion, Jan 2021. [Slides]

5. Long-Term Capital Budgeting and Incentive Mechanism, with Buqu Gao, Oct 2017.

Commentaries:

• Assessing the Optimality of Corporate Short-Termism, with Dirk Hackbarth and Alejandro Rivera, VoxEU CEPR's Policy Portal, Dec 2018.