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Welcome! My name is Naide Ye. I am a Ph.D. Candidate in Shanghai Advanced Institute of Finance (SAIF), Shanghai Jiao Tong University. I am on the job market for 2025-2026.
My research lies at the intersection of Corporate finance, Organizational and Political Economics. I study how institutional frictions rooted in politicians’ incentives and judicial systems shape firm behavior and capital markets. I also examine how incentive misalignments and information frictions within China’s multi-layered government structure distort policy implementation and influence economic outcomes. A third line of my research, in the area of Finance and Development, explores how frictions in financial intermediation, particularly within the banking system, affect resource allocation, industrial structure, and long-term growth.
Organizational and Political Economics
Third-party monitors are commonly deployed to mitigate agency problems in multi-layered organizations. Yet these third-party relationships may themselves be subject to agency concerns. We examine how third-party monitoring can be undermined by collusion between monitor and agent, in monitoring air pollution in China. We exploit an outsourcing reform that transferred control of pollution monitoring stations from local governments to third-party firms selected by the central government. We find that local governments significantly increased procurement transactions with their assigned monitor post-reform. Additionally, following these transactions, reported air pollution from monitoring stations declined, as did enforcement actions against nearby polluting firms.
Citizen Participation through Courts: Pollution Accountability after Judicial Centralization, with Yongxiang Wang
CICF 2024
Previously Circulated as "Toxic Political Capture at Local Courts"
We investigate how changes in the structure of local judicial sytems shape citizen participation through civil environmental litigation and its impact on industrial pollution. A judicial centralization reform in China removed local governments’ influence over local courts. Exploiting its staggered rollout, we uncover that the reform increased the number of environmental civil lawsuits filed by citizens and raised their success rate against influential polluters. Judicial reasoning became more extensive and less biased toward politically connected firms. The reform also strengthened the deterrent effect of litigation: non-sued polluters reduced emissions when lawsuits were heard in reformed local courts, especially when the defendants were state-owned or economically important. This response was more pronounced when lawsuits attracted greater public attention. At the city level, the reform amplified the pollution reducing effect of citizen litigation. This paper reveals that centralizing control over local courts improves the provision of environmental public goods by strengthening citizen-led accountability through civil environmental litigation.
Leveraging a reform that assigns central inspectorates to local units in China to oversee industrial land transactions, this study examines the effects of unleashing the local government's influence on land prices using a difference-in-differences design. Our research provides compelling evidence that the reform leads to an additional 50% increase in industrial land prices and significantly enhances the productivity of local industrial firms. The rise in land prices can be attributed to an increase in market-oriented transactions. Additionally, we discover an improvement in the quality of new entrants and a reduction in resource misallocation following the reform. By demonstrating the positive externalities of central supervision on local government intervention in the industrial land market, our findings suggest that, in certain cases, central inspection can mitigate distorting behaviors of the local government in input markets. This, in turn, facilitates the screening of productive entrants and hinders investments by unproductive incumbents, thereby improving the overall productivity of economic entities.
Corporate Finance and Institutions
Contracting with Government: Judicial Constraints and Expropriation Risk in the Capital Market, solo authored
SFS Cavalcade Asia-Pacific 2025 (Scheduled); AFR International Conference of Economics and Finance 2025
This paper examines how strengthening judicial constraints on local governments reduce expropriation risk in public procurement contracts, drawing inference from capital market responses. I exploit the staggered rollout of a judicial reform in China that curtailed local governments’ control over court adjudication. I construct a dataset of firm-government contract disputes, over 99% of which stem from delayed payments by local governments, and find that the reform significantly increased firms’ win rates in litigation against local governments. Government suppliers exhibit a sharp increase in financial distress following disputes with local governments, but this effect is significantly attenuated after reform, suggesting that delayed payments are more likely to be settled under reformed courts. Turning to capital markets, event studies show more positive bond CARs around procurement announcements post-reform for private-owned enterprises (POEs), but not for state-owned enterprises (SOEs). At the issuer-quarter level, an exposure measure–the share of a firm’s government contract value coming from reformed jurisdictions–predicts improved receivable liquidity and lower credit spreads among POEs. Overall, the findings suggest that enhanced judicial independence constrains expropriation risks in government contracts and alleviates financial frictions for private suppliers engaged in public procurement.
Court Enforcement and Corporate Innovation: Evidence from China, Joint with Dongmin Kong and Yanan Wang
3rd round R&R at Journal of Banking and Financce
This paper investigates how enhanced bankruptcy enforcement affects corporate innovation, leveraging the staggered introduction of specialized bankruptcy tribunals in China as a natural experiment. The reform increases patent applications by 11%, driven primarily by explorative patents. Firms' financing constraints ease following the establishment of specialized tribunals, suggesting the central role of credit supply channels. The credit supply channel operates through two mechanisms: heightened innovation among firms facing greater ex ante bankruptcy risk (creditor incentive effect), and the reallocation of credit and innovation away from subsidy-seeking and zombie firms toward more productive firms (credit reallocation effect). The reform's impact is amplified in regions with greater banking competition.
Finance and Development
Banking Integration and Capital Misallocation: Evidence from China, Joint with Dongmin Kong
Review of Corporate Finance Studies, 2025
Using the staggered intercity but within-province deregulation of local banks in China as exogenous variations, we evaluate the effect of banking integration across geographical segmentation on capital misallocation. Based on an administrative data set comprehensively covering Chinese manufacturing firms, we find that for firms with initially high marginal revenue products of capital (MRPK), the integration increases physical capital by 19.3%, and reduces MRPK by 33.1% relative to low MRPK firms. Our findings are more pronounced for non-state-owned firms and firms with higher exposure to integrated banks. Integration also significantly increases the responsiveness of firms’investments to deposit shock on other cities within the same province.
Local Government Ownership of Banks and Public Financing in China, Joint with Yichen Wang
CCER Summer Institute 2024; DAFI International Conference of Finance 2025
This paper investigates the impact of increased local government ownership of banks on local public financing in China. We exploit exogenous variation from a regulation enacted in 2018, which inadvertently raised local government ownership of local banks. Using detailed loan-level data and penetrating government ownership, we uncover that banks with a one standard deviation increase in local government ownership, instrumented by the regulation driven variations, experienced a 69 percent rise in credit lines to local government financing vehicles. The effect is stronger in cities where local leaders have higher political promotion incentives or face heightened pressure to maintain social stability. Furthermore, increased government ownership reduces banks’ focus on borrower profitability, and facilitates high-risk municipalities to substitute bond issuance with bank loans.
Other Publications:
The Contraction of Chinese Shadow Banking and Corporate Investment Behavior, Joint with Zhibin Ji and Dongmin Kong
China Economic Quarterly (in Chinese (经济学（季刊）)) 24.2 (2024): 661-676
Third Prize for Outstanding Paper, 2020 China Finance Annual Meeting
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