- "Subscribing to Transparency", w/ Yinghua He, Hong Guo and Jiong Yang, Journal of Banking and Finance, vol. 44, 2014.
The empirical relationship between trade transparency and liquidity is non-monotonic, explaining why transparency effects vary in existing empirical literature.
- "The Cost of Political Tension: An Anatomy" w/ Yinghua He (Toulouse School of Economics) and Yonglei Wang (Toulouse School of Economics).
Political conflicts causing diplomatic
tension and political unrest rarely escalate into direct violence or war. This
paper identifies the financial effects of such non-violent political tension by
examining Taiwan’s sovereignty debate. Non-violent events harming the
relationship with mainland China lead to an average daily drop of 200 basis
points in Taiwanese stock returns. The impact is more severe on firms openly
supporting the Taiwanese pro-independence party. Through a series of tests we
identify this economic penalty as initiated by mainland authorities, who specifically
target political opponents that are economically exposed to mainland China via
either investments or exports.
- "Proximity and IPO Underpricing" w/ Dariusz Wójcik (University of Oxford)
The paper analyses the relationship between issuers’ location
and IPO underpricing in the U.S. in the period 1985-2011. Issuers headquartered
in rural areas are associated with approximately seven percentage points lower
underpricing compared to urban firms. This finding is consistent with recent
literature indicating strong local bias in rural areas, accompanied by superior
local information and monitoring intensity, which results in more accurate
pricing and less ‘money left on the table’. The paper further finds that
proximity to finance professionals and density of financial expertise affects IPO underpricing more than proximity to large cities.