Yuan Gao

[1] AI Automation and Effort Allocation: Evidence from Sophisticated Investors

Sophisticated investors exert more effort at human-intensive tasks in the age of AI. I hypothesize that AI reduces costs of collecting machine-based information, thereby facilitating the acquisition of human-interaction-based information. Using both a stacked difference-in-differences analysis and an IV approach, I find that hedge funds increase earnings call participation—at both the extensive and intensive margins—after adopting machine downloads of SEC filings. Post-automation call attendance is associated with higher fund returns and profitable stock trades. Overall, this study identifies a novel mechanism for productivity effects of AI: by substituting for human effort on automation-prone tasks, AI complements high-skilled workers without directly augmenting interaction-based tasks.

Selected Presentations: FMA Doctoral Student Consortium (2025); University of Arizona (2025); FMA Doctoral Student Consortium (2024, Proposal); FMA New Ideas Session (2023) 

[2] Whom You Know Matters: Mutual Fund Workplace Networks and Investment Performance (with Charles Cao and Harry Guo)

Do investors rely on workplace networks and what organizational structures facilitate workplace information flows? We provide new insights by constructing a novel fund-level skill-weighted measure of interfund comanager connections (ICC). We find that funds with a higher ICC exhibit more similar portfolio holdings to connected funds. A higher ICC is also associated with better fund performance. We use plausibly exogenous superstar manager departures to pin down causality. Value-relevant information is transmitted: ICC funds profit more from trading on overlapped hard-to-research stocks and non-local stocks than non-ICC funds. We also present first evidence on the evolution of mutual fund workplace networks. 

Selected Presentations: AFA (2026); CMU-Pitt-PSU Joint Conference (2025); University of Arkansas (2024); EasternFA (2024); University of Arizona (2023) 

[3] Anatomy of a Crypto Bank Run (with Richard Sias)

We examine the behavior of over half a million depositors in the first major “cryptocurrency bank” run and failure. Our analysis highlights the fragility of cryptocurrency banks as (1) the deposits themselves are speculative assets subject to exogenous market events, (2) the likelihood of a run is a function of the depositor base and varies with depositor size, attention, personal experience, and ethnicity, and (3) the run is extremely concentrated—a mere 2% of depositors can account for the entire run. Given the quickly expanding integration of cryptocurrency and traditional markets, our results have important implications for policy and investors. 

Selected presentations: NFA (2025); UD/Philly Fed Fintech and Financial Institutions Research Conference (2025)

[4] Prices versus Voices: Dissecting the Governance Epitome of Passive Investing

I provide novel evidence on the governance implications of passive investing through the lens of CEO turnover-performance sensitivity (TPS). I formulate competing hypotheses that passive ownership affects CEO TPS via less informative stock prices or stronger governance-related shareholder voices. Using Russell index reconstitutions to perform difference-in-discontinuity estimations and shock-based IV analyses, I show that the consistent positive relation between passive ownership and CEO TPS is likely causal, consistent with large passive voting blocks amplifying active shareholders’ ability to press for stronger governance. Poorly performing CEOs being replaced is seen as a bright side of passive ownership by the stock market.

Selected Presentations: International Corporate Governance Society-ASU (2024); FMA (2024); EasternFA (2024)

Conference Discussions:

EasternFA, How Do Life Insurers Manage Liquidity Risk, 2024 [Slides]                                                                                                                                                                                                                                                                             

FMA, From Active to Passive: The Consequences for Demand Elasticity, 2024  [Slides]                                                                                                      

FMA, Capital Concentration of the Bond Fund Industry and Bond Market Fragility, 2022 [Slides]                                                         

FMA, Investor Attention/Awareness and Learning Channels, 2022  [Slides]                                                                                                                                               

GFC, AI Determinants of Success and Failure: The Case of Financial Statements, 2025 [Slides]