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Welcome! I am Naide Ye, an Assistant Professor at the School of Finance, Shanghai University of Finance and Economics.
My research lies at the intersection of corporate finance, organizational economics, and political economy. I study:
how political incentives and legal institutions shape firm behavior and capital markets;
how incentive misalignments and information frictions within multi-layered government organizations shape policy implementation; and
how frictions in financial intermediation, particularly in the banking system, affect resource allocation and long-run economic growth.
Organizational and Political Economics
Strategic Capture of Monitors: Evidence from Pollution Control in China, with Raymond Fisman and Yongxiang Wang
R&R at AEJ: Economic Policy
Abstract: 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.
Top-Down Reform, Bottom-Up Accountability: Judicial Independence and Environmental Accountability in China, with Raymond Fisman and Yongxiang Wang
R&R at AEJ: Economic Policy
Abstract: We study a 2014 judicial reform in China that increased judicial independence by transferring control over local courts to higher-level authorities. Using a staggered difference-in-differences design and a comprehensive dataset of environmental litigation, we show that the reform increased both the frequency and success of citizen-initiated lawsuits against polluting firms. These effects are concentrated among politically powerful defendants, suggesting that the reform reduced political distortions in judicial decision making. Finally, we find suggestive evidence that stronger litigation threats improved local air quality in densely populated industrial areas. Our findings suggest that judicial independence can enhance the effectiveness of citizen-led environmental accountability and generate downstream improvements in environmental quality.
Abstract: 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
Judicial Constraints and Expropriation Risk in Local Government Procurement Contracts, solo authored
SFS Cavalcade Asia-Pacific 2025
Abstract: 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.
Banking Integration and Capital Misallocation: Evidence from China, Joint with Dongmin Kong
Review of Corporate Finance Studies, 2025
Abstract: 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.
Bank Ownership as a Political Instrument: Evidence from Chinese Local Governments, Joint with Yichen Wang
R&R at Review of Finance
CICM 2026; CFRC 2026; CCER SI 2024
Abstract: We study how local governments use equity stakes in banks as a political and fiscal instrument to expand off-budget credit. We develop a novel city-bank-year measure of Chinese local government ownership from banks’ shareholder registries and link it to transaction-level borrowing by local government financing vehicles (LGFVs). We find that a one-standard deviation increase in a local government’s ownership stake in a bank raises that bank’s credit to local government borrowers by 11%. We exploit a regulatory reform that forced private shareholders to unwind bank holdings to support a causal interpretation. This effect is stronger when political competition is intense, officials near the end of their terms, and fiscal constraints are tighter. Greater local-government ownership also makes LGFV investment more responsive to industry performance, yet these projects are more likely to fail, indicating that ownership directs credit to attractive industries at the cost of project quality.
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