Welcome to my webpage!

I am an Assistant Professor of Finance at University of Missouri, Robert J. Trulaske, Sr. College of Business.

I graduated from Purdue University, Krannert School of Management with a PhD in Finance.

I conduct empirical research on corporate finance and financial intermediation.

Here is my CV.

Working papers:

• The Rise of Nonbanks and the Quality of Financial Services(with Ahmet Degerli)

We show that as nonbanks' market share increases in a local residential mortgage market, the quality of mortgage services in the market improves. 

Upcoming presentations: AFA (Jan 2024), FDIC Annual Bank Research Conference (Sep 2023)

• Social Connections and Bank Deposit Funding (with Sean J. Flynn Jr.)

We show that social connections transmit shocks that influence bank deposit funding.

Upcoming presentations: AFA (Jan 2024)

• Trade Credit in the Product Market Network (with John J. McConnell and Liying Wang)

We document that industry positions in the product market network–a feature exogenous to individual firms–significantly influences firms’ use and extension of trade credit.

• When Shareholders Cross-Hold Lenders’ Equity: The Effects on the Costs of Bank Loans (with Liying Wang)

We find that as borrowers’ institutional shareholders cross-hold more equity of the lenders, syndicated loan spreads are lower.

R&R requested: Journal of Banking and Finance

Publication:

1. Debt Covenant Renegotiations and Creditor Control Rights (with David J. Denis), 2014, Journal of Financial Economics, 113(3), pp.348-367

Abstract: Using a large sample of private debt renegotiations from 1996 to 2011, we report that, even in the absence of any covenant violation, debt covenants are frequently renegotiated. These renegotiations primarily relax existing restrictions and result in economically large changes in existing limits. Renegotiations of specific covenants are a response to both the distance the covenant variable is from its contractual limit and the firm׳s specific operating conditions and prospects. Moreover, the borrower׳s post-renegotiation investment and financial policies are strongly associated with the covenant changes resulting from the renegotiation. Overall, the findings imply that, even outside of default states, creditors have strong control rights over the borrower׳s operating and financial policies, and they exercise these rights in a state contingent manner through covenant renegotiations.

2. Debt Covenant Design and Creditor Control Rights: Evidence from the Tightest Covenant, 2017, Journal of Corporate Finance, 44, pp.331-352. 

Abstract: Within the same debt contract, some financial covenants are considerably more restrictive than others. I exploit this heterogeneity in covenant design and show that the design of the most restrictive covenant is systematically associated with covenant outcomes - compliance, violations, or renegotiations. Consistent with an alleviation of moral hazard problems, tighter capital expenditure restrictions (performance covenants) are more likely to facilitate ex post creditor control through covenant renegotiations (violations). By contrast, borrowers are more likely to comply with contracts with tighter capital covenants, suggesting that these covenants more effectively align shareholder-creditor interests ex ante to avoid adverse selection problems.

3. Bank Integration and the Market for Corporate Control: Evidence from Cross-State Acquisitions (with Kose John and Qianru Qi), 2020, Management Science, 66(7), pp.2801-3294.

Abstract: Using the staggered and reciprocal passage of interstate bank deregulation as an exogenous variation in the degree of bank integration, we investigate how and why bank integration influences the market for corporate control for nonfinancial firms. We posit that bank integration affects acquisitions either through reducing the information asymmetry between acquirers and targets or through increasing credit supply. Our evidence is more consistent with the former channel. Specifically, we document that (1) cross-state acquisitions are more likely to occur between reciprocally deregulated states, and (2) firms are more likely taken over by out-of-state acquirers after deregulation; this effect is stronger for a target who borrows from an out-of-state bank, whose local bank is acquired by an out-of-state bank, and who is informationally more opaque. Announcement returns for acquirers of out-of-state (particularly private) targets increase after deregulation, consistent with better identification of higher-valued targets by acquirers after deregulation.

4. Debt Structure Instability Using Machine Learning (with Qianru Qi), 2021, Journal of Financial Stability, 57(2021).

Abstract: Applying a machine-learning algorithm to a large sample of U.S. public firms, we document that more than 30% of the firms substantially alter debt structures in a year, even when leverage ratio is stable, when short-term debt is trivial, and when little cash outlay is required for operations. The instability of debt structure reveals new costs of financial constraints: compared to high-credit-quality firms, low-credit-quality firms have to change debt structure more frequently to accommodate their financing needs, even with increased borrowing costs; low-credit-quality firms lack the opportunity available to high-credit-quality firms to reduce borrowing costs through switching debt instruments.