Job Market Paper:
Biased Bank Loan Expansion and Firm Political Connection: Evidence from China's 2009 Stimulus Program
Summary: This paper provides empirical evidence on the effects of China's stimulus package on firm bank loan financing, with a particular focus on the role of political connections. Based on Chinese listed firm data from 2003 to 2018 and the government working experience of their CEOs/chairpersons, the results find that politically connected firms, particularly those enjoying close ties with the local authorities and having lower levels of probity, tended to receive larger bank loans during the stimulus period. A series of additional tests based on Instrumental Variables (IVs) addressed endogeneity concerns. Furthermore, it examined two potential processes to explain the findings: the Self Selection Process and the Bank Selection Process. The Self Selection Process suggests that political connections boost firms' confidence in applying for bank loans, while the Bank Selection Process highlights how these connections serve as an implicit guarantee, enabling politically connected firms to obtain and maintain favourable treatment from banks. The subsequent analysis supports the Bank Selection Process, indicating that politically connected firms face more granted announcements and incur lower borrowing costs compared to their non-connected counterparts.
Presentations: 2024 RES (Belfast, UK); 2023 ESEWM (Manchester, UK).
Acceptance: 2024 FMA Europe; Southwestern Finance Association Annual Conference.
Working Papers:
The Impact of China's Stimulus-driven Credit Expansion on Industrial Investment
Summary: The stimulus-driven credit expansion experienced in China directs resource allocation to industries with weaker growth prospects, thereby worsening the aggregate growth potential.
Presentations: 2023 EEA & ESEM (Barcelona, Spain); Spanish Finance Association Ph.D. Mentoring Day (Malaga, Spain); RES & SES (Glasgow, UK); 2022 CEA (Durham, UK); PhD-EVS.
Acceptance: 2023 World Finance Conference; FMA Europe; MMF Ph.D. Conference.
The Impact of The Economic Stimulus Package on China's Economic Growth
Summary: China's 4-trillion Yuan stimulus package temporarily boosted GDP growth, at the expense of long-term economic slowdown.
Presentations: 2022 Cornell University, 100 Years of Economic Development Conference (Ithaca, U.S; Virtual); Shanghai Jiaotong University, Antai College of Economics-Management Doctoral Students Forum (Shanghai, China; Virtual); Aix-Marseilles School of Economic Summer School Presentation (Aix-en-Provence, France); CES (Guiyang, China; Virtual); SES (Glasgow, UK); MMF Ph.D. Conference (Edinburgh, UK); University of Glasgow, PGR Symposium (Glasgow, UK); Nankai University, School of Finance (Tianjin, China; Virtual); 2021 CEA (Edinburgh, UK; Virtual); University of Glasgow, Economic Ph.D. workshop (Glasgow, UK; Virtual).
Acceptance: 2022 North East Universities Development Consortium Conference.