Welcome

I am an Associate Professor of Finance at UNC Greensboro. I obtained my PhD degree in Finance from University of Texas at Dallas and was a faculty member at City University of Hong Kong before joining UNCG. My research is in the areas of corporate finance, financial intermediation, product market, and climate finance.  

PUBLICATIONS

“Product Market Competition with CDS”, 2022, with Dragon Tang, Journal of Corporate Finance  73

Firms grow faster than their industry rivals if there are credit default swaps (CDS) referencing their debt, as inefficient bankruptcy associated with CDS induces shareholders to take more risk while creditors monitor less. CDS firms achieve growth by reducing markups, developing products, and encroaching on rivals’ product space. 

• Hong Kong Research Grants Council funded project (#11503114)

• CICF 2018, FMA 2018

“He who lends knows” , 2022, with Shuyi Jiang, Journal of Banking and Finance 138

Firms borrow more from banks with expertise in their industries. Relationships with expert banks also cushion firms against credit supply shocks. We identify a new dimension of information advantage of financial intermediaries.  

“The effect of oil supply shocks on industry returns ”, 2021, with Dayong Huang and Kai Wu, Journal of Commodity Markets 24 

Oil supply shocks matter as much, if not more, as oil demand and economic activity shocks in driving industry returns. Our finding makes a timely contribution to the debate on the transition of energy supply from fossil fuel to renewable sources. 

“The value of access to finance: Evidence from M&A”, 2019, with Jess Cornaggia, Journal of Financial Economics 131, 232-250  

Using interstate banking deregulation as a natural experiment, we find greater access to bank finance increases firms’ attractiveness as acquisition targets. Targets’ comparative advantage in bank finance improves bank credit supply and reduces financing costs for the merged firms. This is novel evidence that targets, not just acquirers, contribute to financial synergies.

• Best paper semifinalist, Financial Management Association 2017 Asia/Pacific Meeting 

• Auckland Finance Meeting 2016, China International Conference in Finance 2015, FMA 2015

“The leverage externalities of credit default swaps”, 2016, with Dragon Tang, Journal of Financial Economics 120, 491-513.

Firms use less leverage when their major customers are referenced by CDS, because customers’ CDS (1) alleviate suppliers’ information asymmetry, making equity financing cheaper, and (2) may signal potentially unfavorable risk outlook, inducing suppliers’ conservative financial policies. We are the first to show externalities of credit derivatives through real economic links.

• Best paper semifinalist, FMA  2014

• CICF 2015

“Financing uncertain growth”, 2016, with David Mauer, Journal of Corporate Finance 41, 241-261.

In a dynamic model, firms’ optimal financial strategy in a fast-changing technology and competition environment can give rise to debt conservatism, large leverage jumps without investment needs, stock underperformance after equity offerings, and observational equity market timing.

• Hong Kong Research Grants Council funded project (#199013)

• FMA 2010, Southern Finance Association Annual Meeting 2010

WORKING PAPERS

“Climate Risk, Capital, and Food Security with Jess Cornaggia

Anticipation of climate risk curbs financing and stunts productivity of climate-sensitive producers. We are the first to measure the simultaneous yet independent effects of dynamic and static effects of climate risk and provide the first evidence that anticipation of climate anomalies has significant impacts on economic activity, beyond the direct, physical effects of climate shocks.

“Partners in wine: Entertainment and credit ratings” with Jess Cornaggia, Feifan Jiang, Chenyu Shan, and Dragon Tang 

Firms that spend more on relationship building such as gifts and entertainment in rating years receive higher credit ratings . We identify a new channel of rating inflation that works regardless of who pays for ratings.

"Can environmental regulation enhance firm performance? Evidence from a natural experiment", with Hunter An, Ruixue Li, and Xiangyi Zhou 

Stringent environmental regulations benefit firms with high environmental standards, enhancing their profitability and stock valuation. We provide novel evidence of the bright side of environmental regulation by highlighting the importance of industry dynamics.