PUBLICATIONS

 

SELECTED WORKING PAPERS

(1)Unintended Labour Market Consequences of Shareholder Litigation R&R at Journal of Financial and Quantitative Analysis

   Abstract: We use the adoption of universal demand (UD) laws as a quasi-natural experiment to examine the impacts of shareholder litigation, as a corporate governance mechanism on the labour market. We observe that reduced derivative lawsuit risk (following the passage of UD laws) leads to higher firm net hiring. However, such increases in hiring are probably inefficient because firms tend to over-hire and UD laws reduce their investment inefficiencies in terms of labour. We further show that UD laws reduce labour productivity and have stronger effects for firms facing less product competition, have low financial slack, and are highly unionised.

(2)Patterns of regional job search and job posting behaviours R&R at Regional Studies

   Abstract: This study examines the evolution of local labour supply and demand. We develop job search indices and employ high-frequency job-posting data to proxy local labour supply and labour demand, respectively. We
find that state aggregate job search and job posting behaviours are highly synchronised, which is partially due to macroeconomic fluctuations and increasingly widespread use of internet job searches. Moreover, we find that both aggregate and state-specific job searches are countercyclical, whereas job postings are procyclical; the former is
contrary to theoretical prediction. We observe that wealth and precautionary effects lead job seekers to search more during economic downturns.

(3)Public News and Market Liquidity: Evidence from the CDS Market (joint with Xinjie Wang, Shanxiang Yang, Jinfan Zhang, and Zhaodong (Ken) Zhong) R&R at Journal of Banking and Finance

  Abstract: This paper examines the effects of public news releases on the market liquidity in one of the most important OTC derivative markets—the CDS market. We document that, at the time of news releases, the bid-ask spread is wider, the number of quotes is larger, and the number of dealers is greater. Earnings announcements have particularly strong effects on liquidity while credit ratings have no significant effects. Moreover, the bid-ask spread only increases on news release days and reverts to normal levels several days after news releases. Finally, the effect of news on liquidity is stronger for negative, fundamental, and unscheduled news, and is more pronounced among firms with higher information asymmetry. Our findings are consistent with models of rational trade in Kim and Verrecchia (1994).

Presentation: 2020 American Accounting Association (AAA) annual meeting; 1st Guangdong-Hong Kong-Macao Area Research Forum on Business; the 8th International Conference on Futures and Other Derivatives; the 5th International Conference on Fintech Development; the Accounting and Business Research(ABR) and China Journal of Accounting Research(CJAR) Joint Conference

(4)Household Debt in the Times of Populism R&R at Journal of Economic Behavior and Organization

  Abstract: This study examines the effects of populism on household debt in 33 countries. Using a newly developed database of populist leaders, we observe that populism has a significantly negative effect on household debt, that is, households tend to hold less debt when populist leaders are in office than when non-populist ones are in office. We explore potential demand- and supply-side channels for this phenomenon. We observe that populism diminishes household debt by reducing lenders’ willingness to lend (supply side) rather than reducing household consumption (demand side). Overall, our results suggest that populism is an important factor in explaining household debt dynamics.