Research Interests:
Corporate Finance, Innovation, Labor and Finance, Banking, ESG
Email: hejing0116@ruc.edu.cn
This study examines how trade protectionism influences corporate tax avoidance. Exploiting the 2018 U.S. tariff increases as a natural experiment, we show that higher import tariffs, by reducing foreign competition, lead to a decline in tax avoidance among U.S. firms.
This decline stems from two key mechanisms:
(1) tariff protection eases financial constraints, reducing the marginal value of cash saved via tax avoidance;
(2) heightened regulatory scrutiny prompts firms to scale back avoidance to lower enforcement risk.
Overall, weaker import competition reduces both the incentive and necessity for aggressive tax avoidance. Cross-sectional tests reveal stronger effects among product market leaders, firms with high managerial stock-based incentives, and those with historically aggressive tax planning.
Affected firms primarily reduce permanent book–tax differences and tax-haven usage rather than timing or R&D-related strategies.
In 2018, the United States imposed multiple waves of import tariff increases, generating exogenous shocks to firms’ input costs and supplier competition. Using these tariff increases as a quasi-natural experiment, we examine how changes in upstream competition affect the use of trade credit by U.S. manufacturing firms.
We find that firms more exposed to input tariff shocks significantly reduce their reliance on trade credit.
The effect is stronger for smaller firms, firms operating in highly competitive downstream industries, financially constrained firms, and firms with greater pre-existing trade credit reliance.
Moreover, the reduction is more pronounced when upstream supplier markets are concentrated, consistent with a bargaining power channel.
Overall, our results provide causal evidence that reductions in supplier competition weaken downstream firms’ access to trade credit.
Global climate policy has become increasingly uneven, with many host countries of U.S. multinationals adopting stricter climate laws than the United States. We show that:
(1) Greater foreign regulatory exposure leads U.S. firms to re-shore pollution-intensive activity, increasing domestic greenhouse-gas emissions by 0.8% and toxic releases by 7%.
(2) Firms headquartered in Democratic-leaning states further redirect this activity to plants in Republican-leaning states, where regulatory pressure is weaker.
(3) Managers simultaneously greenwash by downplaying overseas climate risks in earnings calls, and well-intentioned sustainable lenders and financial analysts inadvertently amplify both reshoring and opacity.
(4) The resulting domestic pollution worsens air quality and elevates respiratory disease rates, highlighting the substantial public-health costs created by fragmented global climate policy.
Presented at: University of Maryland, Renmin University of China, MFA 2026, WFA 2026 (scheduled), AIB 2026 (scheduled)
We examine whether banks' adoption of artificial intelligence (AI) widens racial disparities in mortgage lending. Using 2022-2024 HMDA data merged with a bank-year AI adoption measure from job postings, we exploit within-bank variation with rich fixed effects.
Higher AI adoption raises the denial-rate gap by 0.75 percentage points and the interest-rate gap by roughly 4 basis points.
IV estimates exploiting banks' historical exposure to local AI labor supply support causality.
The effects are concentrated in purchase loans, and are absent for GSE-backed loans and refinance loans.
Our findings suggest that AI adoption amplifies racial disparities in mortgage lending, with implications for bank governance and financial regulation.
Local city commercial banks in China are controlled by local governments, which leads to potential deviations from profit-maximizing objectives in favor of political considerations.
We find that these banks preferentially extend credit to government-affiliated firms when those firms underperform, particularly during periods of workforce layoffs, heightened social instability, and times when local officials face strong political incentives.
While such related lending raises employment levels, it does not enhance firms’ operating performance.
Conversely, they weaken the financial performance of the lending banks.