Publications
Publications
Journal of Financial Economics, 175, 104192, January 2026.
with Matteo Crosignani, Marco Macchiavelli, and Andr´e F. Silva
Abstract: To safeguard its technological leadership, the U.S. has restricted domestic suppliers from exporting cutting-edge technologies to selected Chinese firms. Domestic firms affected by these export controls halt sales to Chinese customers, as intended, but struggle to establish new relations with alternative customers domestically or in politically aligned regions. Consequently, domestic suppliers experience sizable losses in market capitalization, along with reductions in profitability, employment, and bank lending. Chinese firms are more proactive in reconfiguring supply chains, though not without costs. Overall, export controls impose larger costs on U.S. firms developing the very technologies these policies aim to protect.
Media Coverage: The Liberty Street, Financial Times, New York Times, Bloomberg, CNN, Barron's, CSIS, CFR , Marginal Revolution
Working Papers
Revise and Resubmit, The Review of Financial Studies
with Xing Huang, Ohad Kadan, and Jimmy Wu
Abstract: We examine the role of race and ethnicity in the mutual fund context at two distinct levels. At the fund manager level, we document a co-racial tilt---funds managed by minority-dominant (White-dominant) teams allocate larger portfolio weights to minority-led (White-led) firms. This tilt is not associated with superior performance. It diminishes as fund managers gain experience, suggesting the presence of inaccurate statistical discrimination. At the investor level, we find that minority-led funds are penalized similarly to White-dominant funds for poor performance, but are not rewarded as much for superior performance. Overall, our results uncover race-related investment choices at both levels.
2025 Kroner Center for Financial Research Grant
with Matteo Crosignani, and Marco Macchiavelli
Abstract: Firm-level geoeconomic risk can affect even broadly diversified mutual fund portfolios. We study U.S. export controls that restrict sales of cutting-edge technology to selected Chinese firms for national security reasons. The stock prices of affected domestic suppliers drop immediately after the policy introduction. Mutual funds holding these stocks experience increased volatility and lower returns. Fund managers respond by selling stocks of exporters to China, buying lottery-like stocks, and increasing portfolio concentration. While stock-picking and market-timing skills do not help, specialist and high-fee funds are better at navigating geoeconomic risk.
with Stacey E. Jacobsen, Jayoung Nam and Veronika Krepely Pool
Abstract: We examine cross-trading by mutual funds in corporate bonds. Because internally matched trades are not observable, we construct two measures that rely on reported trade volume and opposite-signed trades within a family. We find that cross-trading is common--more than 5% of bond-family-quarters have positive indicators. There is large variation across families and higher crossing activity for illiquid and hard-to-obtain bonds. Cross-trading is particularly elevated around demand shocks (e.g., maturity cutoffs and credit rating changes), indicating that cross-trading is beneficial in times of stress. We document large transaction cost savings, although these savings have diminished following a new regulation that significantly limits cross trading in corporate bonds.
Solo-authored
Abstract: This paper documents that mutual fund managers who experience distress in one fund subsequently take on more risk in other funds they manage. Specifically, portfolio managers actively reallocate more stocks with higher systematic risk and lottery-like features in their linked funds. This increased risk-taking appears to be primarily motivated by managers' compensation contracts and is value-destroying for fund investors. The response to the distress shock is smaller for portfolio managers with long-term incentive compensation contracts, longer-tenured managers, and female managers. These results highlight fund spillover effects through common portfolio managers and agency conflicts in the mutual fund industry.
with Xuan Luo and Shumiao Ouyang
Abstract: This paper examines how individual investors respond to the market price fluctuations, using unique individual-level transaction data from a trading experiment and the same individuals' real trading history on the Alipay app. We find that, in response to exogenous price movements in the experiment, investors tend to be contrarian traders. Sophisticated investors tend to be more contrarian than the less sophisticated ones. We further document that investors' real trading styles can be highly predicted with their behaviors in the experiment. The results imply that investors use simple heuristics from the price movements when they make investment decisions in the real world.