I am Yiyuan Zhang, a Finance Ph.D. student at the University of Texas at Austin, McCombs School of Business. My reseach interests include Macro Finance and Real Estate.
Email: yiyuan.zhang@mccombs.utexas.edu
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Working Papers
Bank Regulation, Construction Financing, and the Supply of New Housing
with Sheridan Titman and Deheng Xu
We show that post-GFC bank regulatory changes intended to curb bank risk-taking contributed to the decline in the supply of new housing. With unique data on the financing and sales of nearly 18,000 homebuilders, we document a sharp decline in construction loans from large banks subject to stress testing following the 2013 reforms, a reduction that was not offset by increases in financing from other sources. Employing a difference-in-differences (DiD) design, we find that, relative to homebuilders who previously borrowed from smaller banks, the credit availability and new home sales of homebuilders who previously borrowed from stress-tested banks declined after the reforms. We find that counties where stress-tested banks held greater pre-GFC market shares provided fewer construction loans and experienced greater house price appreciation after 2013.
Presentations: Rice University, Singapore Management University, Pre-WFA Summer Real Estate Research Symposium, European Finance Association Annual Meeting, AREUEA-ASSA Annual Conference
The Intangible Gap
with Mindy Z. Xiaolan and Lei Zhang
We document a large and rising intangible investment gap between small and large U.S. firms. Smaller firms invest disproportionately in intangible capital, despite facing tighter financing constraints, and this gap has tripled since the 1980s alongside a pronounced increase in intangible investment volatility. We develop a dynamic industry-equilibrium model in which firms invest in both physical and intangible capital under financial frictions. Intangible investment is subject to idiosyncratic quality shocks and can be partially financed internally through equity-based compensation. These features generate an option like payoff to intangible investment: downside risk is limited by exit, while upside gains scale with realized quality. This mechanism makes intangible capital particularly attractive for small firms with high exit risk. Our analysis reveals that the joint increase in intangible investment volatility and the decline in financing frictions for intangible capital account for approximately 60% of the post-2000 gap in intangible-to physical capital ratios between small and large firms over the 2001–2023 period.
Presentations: ABFER Annual Conference, European Finance Association Annual Meeting
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