Felix Zhiyu Feng

Visiting Assistant Professor

Department of Finance and Business Economics

Michael G. Foster School of Business

University of Washington

Tel: 206-616-4319 Email: ffeng@uw.edu

Assistant Professor of Economics (on leave)

University of Notre Dame

My main area of research is corporate finance, with specific interests in dynamic agency, contract theory, corporate governance, and institutional investment. I received a PhD in Economics from Duke University in 2014 and am a member of the Finance Theory Group.

Published and Forthcoming Articles

Dynamic Resource Allocation with Hidden Volatility, with Mark Westerfield (2021), Journal of Financial Economics, 140(2). 560-581

  • We study a firm's internal resource allocation problem in a dynamic principal-agent model with endogenous cash flow volatility. The optimal contract can be implemented with a constant pricing schedule -- a static, decentralized, linear mechanism -- that rationalizes the use of hurdle rates above firms’ cost of capital and transfer prices above the marginal cost.

Dynamic Compensation under Uncertainty Shocks and Limited Commitment (2021), Journal of Financial and Quantitative Analysis. Forthcoming.

  • Excessive risk-taking, lower bonus hurdles, and substantial compensation to corporate managers during a financial crisis? They can be part of an optimal contract when firms face systemic uncertainty shocks but cannot fully commit to long-term contracts.

Productivity and Liquidity Management Under Costly Financing, with Jianyu Lu and Jing Wang (2020), Journal of Corporate Finance, 63: 88-117

  • More productive firms could demand less capital assets and hold more liquid assets compared to less productive firms when financing costs are sufficiently high.

Working Papers

Setbacks, Shutdowns, and Overruns, with Curtis Taylor, Mark Westerfield, and Feifan Zhang

  • Although overruns and cancellations are commonly viewed as failures of project governance, such outcomes are necessary features of the optimal project management when random setbacks arise naturally during development.

Looking the Other Way: The Screening Role of (Weak) Internal Monitoring, with Wenyu Wang and Yufeng Wu

  • Firms may attract better managers with weaker internal monitoring when managerial ability is not directly observable, suggesting an optimal level of monitoring intensity even when monitoring is intrinsically costless and can be made arbitrarily strong.

Financing a Black Box: Dynamic Investment with Persistent Private Information

  • What happens when agency frictions in a dynamic investment model have persistent effects?

Renegotiation and Dynamic Inconsistency: Contracting with Non-Exponential Discounting, with Doruk Cetemen and Can Urgun

  • We introduce dynamic inconsistency into a Sannikov (2008)-style optimal contracting problem and provide a novel argument for the existence and characteristics of the solution.
  • Revise & Resubmit, Journal of Economic Theory

Foreign Competition and CEO Risk-Incentive Compensation, with Tor Erik-Bakke, Hamed Mahmudi, and Caroline Zhu

  • How do firms optimally adjust CEO risk-incentive compensation in response to increased foreign competition? The answer is theoretically ambiguous but can be empirically identified through a quasi-natural experiment.
  • Revise & Resubmit, Journal of Corporate Finance

Caught in the Crossfire: How the Threat of Hedge Fund Activism Affects Creditors, with Qiping Xu and Caroline Zhu

  • Firms under the threat of hedge fund activism on average experience significant losses of outstanding bondholder wealth and receive inferior terms when initiating new loans.
  • Revise & Resubmit, Journal of Empirical Finance

Teaching Experience

University of Washington: Financial Theory and Analysis, Financial Strategy and Planning, Business Finance (Global EMBA)

University of Notre Dame: Intermediate Microeconomic Theory, Asset Pricing Theory

Duke University: Advanced Microeconomic Analysis, Advanced Topics in Financial Economics, Introduction to Econometrics, Time Series Analysis

Seminars and Conferences

Duke University (Finance, Economics), University of Notre Dame (Finance, Economics), Oxford University, University of Washington, Georgia State University, Loyola University Chicago, Boston University*, Cornell University*, New York University*, Princeton University*, University of British Columbia*, University Kansas*, University of Michigan*, University of Minnesota*, University of Oklahoma*, University of Texas - Dallas*, Yale University*, Bikent University*, Collegio Carol Alberto*, London School of Economics*, Queen Mary University of London*, University of Bristol*, University of Warwick*, CUHK*, HKUST*,CKGSB*, PBC Tsinghua*, SUFE*, SWUFE*.

Finance Theory Group Members Meeting (MIT), AFA, SFS Cavalcade (North America, Asia Pacific), Econometric Society (North American Summer Meeting, European Winter Meeting, China Meeting), Annual Workshop on Relational Contract (Northwestern), MIT Asia Conference in Accounting, SAIF Summer Institute of Finance, AMU Entrepreneurial Finance Conference, SUNY Albany Financial Market Symposium, USTC-UW Workshop on Fintech and Management Innovation, Society for Institutional & Organizational Economics Conference, Industrial Organization Society IIOC, AEFIN Finance Forum, ISEAPA North American Productivity Workshop, DSE Winter School, Conference on Markets and Economies with Information Frictions, Midwest Economic Theory Conference, CIRF, EARIE, EEA-ESEM, FMCG, NFA, RES, SED, SWFA, WERI, NBER (organizational economics)*, SITE*, SAET*, ESSET(Gerzensee)*, Manchester University The Role of Hedge Funds Conference*, APAD*, FMA*, ICCEF*

* Co-author presentations