Publications

Academic Publications

1. Macroeconomic Risk and Idiosyncratic Risk-Taking, joint with Ilya A. Strebulaev, online appendix

     --  Review of Financial Studies, Volume 32, Issue 3, March 2019, Pages 1148–1187 .

   -- In repeated games, equity holders with Epstein-Zin preferences increase their taking of idiosyncratic risk substantially than they do in standard models, because they perceive the arrival probability of bad states higher than the actual probability and prefer an early resolution of  macroeconomic uncertainty.

       --  Conferences: the 2018 American Financial Association meetings. 

2. Operating Leverage, Profitability and Capital Structure, joint with Jarrad Harford and Avraham Kamara

   --  Journal of Financial and Quantitative Analysis, Volume 54, Issue 1 February 2019 , Pages 369-392.

   -- Operating leverage increases profitability and reduces optimal financial leverage,  generating a negative relation between profitability and financial leverage. 

   --  Conferences: the 2013 European Finance Association Annual Meetings (EFA, Cambridge, UK), the 24th Conference on Financial Economics and Accounting (University of North Carolina, Kenan-Flagler Business School), and the 2013 China International  Conference in Finance (Shanghai).

3. Strategic Risk Shifting and the Idiosyncratic Volatility Puzzle: An Empirical Investigation, joint with Ilya A. Strebulaev, Xiaoyan Zhang, and Yuhang Xing

--  Management Science,  Vol. 67, No. 5 May 2021, Pages 2657-3320. 

 --  Conferences: the 2015 Western Finance Association Annual Meetings (Seattle), the 2015 European Finance Association Annual Meetings (EFA, Vienna), the 2014 North American Summer Meeting of the Econometric Society (Minnesota), the 2014 Jerusalem Finance Conference (Hebrew University), the 2014 Frontiers of Finance Conference (Warwick Business School), the 2014 China International Conference in Finance (Chengdu).

4. A Unified Model of Distress Risk Puzzles, joint with Dirk Hackbarth and Ilya A. Strebulaev.  

-- Journal of Financial Economics, Volume 146, Issue 2, Nov 2022 Pages 357-384. 

-- Lead article

-- Endogenous debt financing explains the negative failure probability-return relation (Campbell, Hilscher, and Szilagyi, JF, 2008) , and endogenous distress status explains the positive distress risk premium-return relation (Friewald, Wagner, and Zechner, JF, 2014) .

--  Conferences: American Finance Association meetings (San Diego),  SFS Cavalcade North America (CMU),  European Finance Association meetings (Lisbon),  Corporate Finance Theory Symposium (Cambridge), Corporate Policies and Asset Prices (COAP) Conference, Great Bay Area Finance Conference, 2nd World Symposium on Investment Research*,  CAFIN Finance Workshop , CUHK Business School, and Shanghai University of Finance and Economics. 

5.  What is the Value of a Bidder Termination Provision in a Takeover?,  joint with Hamed Mahmudi, Aazam Virani and Xiaofei Zhao

-- Journal of Financial and Quantitative Analysis, Nov 2022.

--   Conferences: the 2016 Journal of Law, Accounting, and Finance (JLFA) Conference* (Northwestern), the 2016 conference on Empirical Legal Studies (Duke)*,  2013 Northern Finance Association*,  2013 Midwest Finance Association*

6.  Do Nonfinancial Firms Use Financial Assets to Take Risk?, joint  with Ran Duchin (Boston College)

-- Distressed firms, with high debt rollover risk proxied by short-term liabilities, substantially increase their investments in risky financial assets, including corporate debt, equity, and mortgage-backed securities, because financial assets are less visible and carry lower transaction costs and accelerated payoffs. 

--  Conferences and Seminars:  Western Finance Association meetings (San Francisco), OU Energy and Commodities Finance Research Conference, Case Western Reserve University*, University of Oklahoma*, University of Toronto *(Rotman), and Chinese University of Hong Kong.

-- Review of Corporate Finance Studies, Feb 2024

-- Editor's choice

Other Publications

 Is the size premium really driven by firm size? joint with Jun Li (UT-Dallas) and Huijun Wang (Auburn).

--  Not really! Size does not explain the size premium, but the change in size does. 

-- Journal of Investing

-- Conferences:  China International Conference in Finance, Midwest Finance Association meetings*, and SGF Conference* .