Working papers

SPACs Boom, Bust, and Structural Failures with Fangjian Fu and Dan Ma 

• Presented at FMA Europe, ENTFIN, SMU, Singapore Rising Scholar Conference

• Abstract: Special Purpose Acquisition Companies (SPACs) experienced a skyrocket rise in 2020-2021 but rapidly collapsed in 2022, raising concerns about their long-term viability. This paper explores the structural flaws that underlie the SPAC boom-and-bust cycle. Three key issues emerge: (1) the misalignment between risk and return, which turns SPACs into speculative instruments rather than investment vehicles; (2) agency problems, where sponsors have distorted incentives with limited governance; and (3) the failure of traditional market gatekeepers – such as underwriters and M&A advisors – in certifying deal quality. Empirical evidence from updated data on redemption rates, deal performance, and the role of financial intermediaries, supports the need for regulatory and structural reforms to make SPACs a viable alternative to traditional IPOs and venture capital.

Salient Signals of Economic Transitions in Analyst Forecasting: Evidence from the Electric Vehicle Era with Jarrad Harford, Weikai Li, and Yonghao Zhai

• Presented at FMA (scheduled), ABR-Fuan Joint Conference (scheduled), SMU

• Abstract: We examine how salient signals of broad economic trends shape financial analysts’ forecasting, using U.S. MSA-level electric vehicle (EV) adoption as a proxy for local environmental salience. After controlling for MSA, analyst, and firm characteristics, analysts in high-EV areas make more accurate forecasts for green firms. This improvement reflects not a net gain in forecasting ability, but a reallocation of limited attention and effort towards green firms. The effect is stronger among male, younger, and less busy analysts, in climate-conscious regions, and for harder-to-value firms, and is accompanied by more frequent forecast revisions, greater climate-related engagement during earnings calls, and increased use of opportunity-oriented climate language in analysts’ reports. Markets respond more strongly to forecast revisions by these analysts, and the information environment of green firms improves under their coverage.

Work in Progress

Employee Whistleblowing on Glassdoor and Consumer Purchasing Behavior: Evidence from Machine Learning Analysis with Rencheng Wang and Yonghao Zhai 

Ideology Alignment and the US Government Foreign Procurement