Tetyana Balyuk

1. The Effects of Cryptocurrency Wealth on Household Consumption
with Darren Aiello, Scott Baker, Marco Di Maggio, Mark Johnson, and Jason Kotter

R&R at Journal of Finance (JF)

We use transaction-level bank and credit card data to examine how cryptocurrency wealth affects household consumption. We estimate a marginal propensity to consumer (MPC) of 9.7% from crypto gains-roughly twice most previous estimates from unrealized equity gains. The higher MPC primarily reflects investor characteristics rather than asset type, as crypto investors also exhibit greater MPCs from equity gains. Consumption responses are symmetric for gains and losses and concentrated in discretionary spending. Our findings suggest that crypto wealth meaningfully influences the real economy, with households broadly treating crypto and equity wealth in similar ways.

Select conferences:  NBER TRIO Conference, NBER Summer Institute HF, Cambridge Alternative Finance Conference, RCFS Winter Conference

2. Who Invests in Crypto? Wealth, Financial Constraints, and Risk Attitudes
with Darren Aiello, Scott Baker, Marco Di Maggio, Mark Johnson, and Jason Kotter

R&R at Review of Financial Studies (RFS)

We provide a first look into the drivers of household cryptocurrency investing. Analyzing consumer transaction data for millions of U.S. households, we find that, except for high-income early adopters, cryptocurrency investors resemble the general population. These investors span all income levels, with most dollars coming from high-income individuals, similar to equity investors. High past crypto returns and personal income shocks lead to increased cryptocurrency investments. Higher household-level inflation expectations also correlate with greater crypto investments, aligning with hedging motives. For most U.S. households, cryptocurrencies are treated like traditional assets.

Select conferences:  AEA, NBER TRIO Conference, SFS Cavalcade, EFA, CEPR

3. Friends and Family Money: P2P Transfers and Financially Fragile Consumers
with Emily Williams (HBS)

We assess the impact that real time money transfer technology has on consumer outcomes, particularly during periods of financial fragility. We do this by developing a new data set that documents use of Zelle - the most widely used P2P money transfer technology in the U.S. today - constructed from transaction level data from a large data aggregator for millions of U.S. consumers. We combine these data with a hand-collected data set on Zelle partnerships for 1,113 financial institutions. Finally, we introduce a novel instrument by identifying the location of consumers' close social circle using transactions data. We find that Zelle use results in fewer overdrafts and higher consumption by financially fragile consumers. Consumers substitute away from traditional methods of transferring cash towards Zelle, an effect that is more pronounced for smaller transfer sizes and low-income consumers who are more price-sensitive. 

Select conferences:  NBER Innovative Data in Household Finance, SFS Cavalcade, ECWFC, Colorado Boulder Summer Conference

4. Small Bank Financing and Funding Hesitancy in a Crisis: Evidence from the Paycheck Protection Program
with Nagpurnanand Prabhala (JHU Carey) and Manju Puri (Duke Fuqua)

- Most Significant Contribution to Banking Research Award, Community Banking in the 21st Century Conference, 2021
- Testimony before the Committee on Small Business of U.S. House of Representatives, US Congress, 2022 (by co-author)
- Previous title: "Indirect Costs of Government Aid and Intermediary Supply Effects: Lessons From the Paycheck Protection Program"

We study the delivery of subsidized financing to small firms through the Paycheck Protection Program (PPP). Smaller firms are less likely to gain early PPP access, an effect attenuated in small banks and firms with prior lending relationships. Their more even treatment offers a new rationale, beyond traditional soft information arguments, for why small businesses pair with small banks. We also detect a “funding hesitancy” in PPP uptake by small businesses, partly reflecting their wariness of the extensive, subjective government powers to investigate PPP recipients. We discuss the implications of the results for research and policies on small business financing. 

Select conferences:  Community Banking Conference, NFA, EFA, NY Fed/NYU Financial Intemediation Conference

5. An Empirical Study of Related-Party Lending

Related-party transactions, where one of the parties is owned or controlled by the other, are often regarded as a way to tunnel funds out of firms. This paper provides the first empirical evidence on related-party lending benefiting borrowers through its ability to ease financing frictions. The incidence of related-party loans is positively linked to financing constraints and lack of transparency. Interest rates on loans from related parties (management) are 1.9% (2.6%) higher compared to loans from unrelated parties. The likelihood of obtaining additional debt increases by 32.8% in the quarter following a related-party loan. Collectively, this evidence suggests that borrowers "invest" in an expensive loan from related parties to increase their chances of obtaining debt financing in the future. 

6. Effects of E-Commerce on Small Business Credit
with Zhishuo Han (Emory Goizueta)

We study how e-commerce affects equilibrium credit provided to small businesses. Theoretical predictions are ambiguous as e-commerce can affect credit supply and demand in opposite directions. We find that small businesses have higher sales, larger orders, and more stable revenue after e-commerce adoption, suggesting that online sales are more efficient than offline sales. Lower cash flow volatility should reduce credit demand, because small businesses often borrow to finance liquidity shortfalls. Yet, we find that businesses obtain more credit after e-commerce adoption, even after controlling for higher efficiency. Our results are consistent with e-commerce relieving credit constraints both directly by increasing expected payoffs to lenders due to higher sales and indirectly by lowering lending costs due to hard data generated in e-commerce. We also find re-distributional effects of e-commerce on credit across industries in local credit markets.

1. FinTech Lending and Bank Credit Access for Consumers
Management Science (MS), 2023, 69 (1): 555-575

- Best Paper on FinTech Award, Northern Finance Association Meeting, 2016
- Previous title: "Financial Innovation and Borrowers: Evidence from Peer-to-Peer Lending"

Using a unique setting of an online peer-to-peer lender, I show that banks expand credit access for consumers who obtain FinTech loans. Consistent with FinTech relieving information frictions, this effect is stronger for more credit-constrained consumers. Many borrowers, especially higher-quality ones, use peer-to-peer loans to repay expensive revolving debt. Yet, debt financing and credit score changes cannot fully explain higher bank credit. The increase in bank credit access is stronger when information sets between banks and peer-to-peer lenders diverge more. These results highlight information spillovers as a novel mechanism through which FinTech lending can relieve financial constraints for consumers.

Select conferences: WFA, AFA, NFA, FDIC/Duke FinTech Conference

2. Divesting under Pressure: U.S. Firms' Exit in Response to Russia's War against Ukraine

with Anastassia Fedyk (UC Berkeley)
Journal of Comparative Economics (JCE), 2023, 51 (4): 1253-1273

- Solicited to special issue “Ukraine: war, resilience, and future developments”

We explore the determinants and consequences of U.S. corporations limiting their business operations in Russia in the immediate aftermath of the 2022 Russian invasion of Ukraine. Firms with Russian exposure experience slightly worse stock market returns when the invasion begins on February 24, 2022. Russia-exposed firms with the worst stock-price reactions to the war are more likely to subsequently withdraw or suspend their Russian operations, whereas firms that experience mild initial effects are more likely to remain. When U.S. firms announce exits from Russia in the aftermath of the invasion, there are no adverse announcement effects on their returns. Instead, exit announcements are preceded by a negative trend in abnormal returns that ends immediately on the day after the announcement. In regression analyses, immediately-preceding negative stock returns are the strongest predictor of firms' decisions to exit Russia. These results are consistent with firms choosing to limit their Russian presence in response to operational impact and reputational effects, and the damage to stock returns stops immediately after the exit announcements. 

3. Reintermediation in FinTech: Evidence from Online Lending
with Sergei Davydenko (UofT Rotman)
Journal of Financial and Quantitative Analysis (JFQA), 2024, 59 (5): 1997-2037

We document the unique structure of the peer-to-peer lending market. Originally designed as decentralized, the market has become highly, but not fully, reintermediated. The platforms’ software now performs essentially all tasks related to loan evaluation, whereas most lenders are passive and automatically fund most applications on offer. Yet unlike banks, and in contrast to theories predicting full reintermediation, the platforms provide detailed loan information, and some active loan pickers coexist with passive investors. We argue that while intermediation attracts unsophisticated passive investors, transparency in the presence of active investors resolves the lending platform’s moral hazard problem inherent in intermediated markets. 

Select conferences: NFA, CIFC, Toronto FinTech Conference

4. What is Fueling FinTech Lending? The Role of Banking Market Structure

with Allen N. Berger (U of SC Moore) and John Hackney (U of SC Moore)
Review of Corporate Financial Studies (RCFS), 2025, forthcoming

- Solicited for publication

We study the broad question about the sources of FinTech lending growth by examining a specific representative product for which the technologies of both FinTech and the incumbent competitors can be identified and compared - small business lending. We test whether the presence of incumbents employing different technologies affects FinTech penetration, and find more FinTech lending where large/out-of-market banks are more prevalent. Using stress test exposures and Community Reinvestment Act examinations as instruments, we find that FinTech credit more often substitutes for loans by large/out-of-market banks than small/in-market banks. Results are consistent with FinTech advantages in processing hard information, rather than hardening soft information.

Select conferences:  AFA, Community Banking Research Conference, ECWFC

1. Intra-Firm Transactions of TNCs in Ukraine: Empirical Investigation
with Alexander Rogach (IIR)
Transition Studies Review 18 (3), 2012, 586-600

2. Transfer Pricing in Transition Economies: Evidence from Ukraine
with Alexander Rogach (IIR)
Transition Studies Review 16 (1), 2009, 20-33

In 2022, I co-founded Economists for Ukraine (www.econ4ua.org), a group of economists working to help stop Russian war on Ukraine and rebuild the country. Check us out and sign up to join our efforts. Share our work. 

Selected op-eds (with Y. Gorodnichenko, T. Babina, A. Fedyk, J. Hodson, I. Sologoub, and others): 

-        “What is Driving Western Firms to Leave Russia?” The FinReg Blog, Jun 2022

-        “Putin Wants Ukrainian Land, Not Land with Ukrainian People,” VoxUkraine, Apr 2022

-        “Hard Truths about Likely Outcomes of Russia’s Attack on Ukraine,” VoxUkraine, Apr 2022

-        “Stop Imagining Putin’s Overthrow. Fantasies Won’t Help Ukraine,” Washington Post, Mar 2022

-        “Sanctions on Energy: To Russia with Love Now,” Emory Business, Mar 2022

-        “The Face of Escalation: Putin Has Already Escalated the War. Semantics Won’t Stop Him from Going Further,”
  VoxUkraine, Mar 2022

-        “The Moral Bankruptcy of Buying Russian Energy,” Emory Business, Mar 2022

-        “Stop the Corruption of Russian Money,” Berkeley Blog, Mar 2022

-        “The West's Three Major Miscalculations in Putin's War on Ukraine,” LinkedIn, Mar 2022

-        “Ukraine’s Nuclear Plants: How Can We De-escalate Russia’s Real Nuclear Threat?” Emory Business, Mar 2022

-        “Why We Need a No-Fly Zone over Ukraine,” Berkeley Blog, Mar 2022

Multiple publications in non-peer reviewed Ukrainian research outlets.