Research

Research Interests

  • Financial Intermediation
  • Corporate Finance
  • Mutual Funds and Hedge Funds
  • Sustainable Finance

Publications

The Decline of Secured Debt
with Efraim Benmelech and Raghuram Rajan
Journal of Finance, forthcoming
WFA Charles River Associate Award for Best Paper on Corporate Finance

Customers as Friendly Shareholders: Uncovering the Complex Mutual Fund-Broker Relationship
with Yuehua Tang and Kelsey Wei
Management Science, forthcoming

The Secured Credit Premium and the Issuance of Secured Debt
with Efraim Benmelech and Raghuram Rajan
Journal of Financial Economics 2022, vol. 146, 143-171

Prime (Information) Brokerage
with Kevin MullallySugata Ray and Yuehua Tang
Journal of Financial Economics 2020, vol. 137, 371-391
First Prize, Chicago Quantitative Alliance (CQA) Academic Competition
Yihong Xia Best Paper Award, China International Conference in Finance

Political Interference and Crowding Out in Bank Lending
Journal of Financial Intermediation 2020, vol. 43

Working Papers

Inter-Firm Relationships and the Special Role of Common Banks
with Emanuela Giacomini and Andy Naranjo
Abstract: Using a novel dataset that combines information on customer-supplier trade relationships with information on firm-bank lending relationships, we show that common banks that lend to firms at both ends of a trade link grow and strengthen such trade relationships. To establish causality, we use bank mergers, which generate exogenous variations in the presence of common banks, and show that common bank relationships between customers and suppliers increase trade relationships by 41.5%. We find that the role of a common bank is greater when it is more informed and when supply chains suffer from larger information and holdup problems. We also document that suppliers with common banks face lower bankruptcy spillover risks from a distressed customer, adopt a focused customer base, and invest more in relationship specific assets. Lastly, we show that common banks play a central role in facilitating provision of trade credit by suppliers during periods of systemic distress (e.g., the Great Recession). Overall, our findings show the unique role of banks in driving inter-firm growth and investment by mitigating information and holdup problems, which arguably leads to greater economic growth.

ESG Lending
with Sehoon Kim, Jongsub Lee and Junho Oh
MFA 2022, UN PRI Academic Network Conference 2022, Oxford Sustainable Private Market Conference 2022, Univ of Delaware Weinberg Center/ECGI Corporate Governance Symposium 2022, OSU Finance Conference 2022, NEOMA Sustainable Finance Conference 2022, Wolfe Research QES ESG Investment Conference 2022, FMA 2021, Fixed Income and Financial Institutions Conference 2021, Paris December Finance Meeting 2021, Australasian Finance and Banking Conference 2021, Conference on Asia-Pacific Financial Markets 2021, Asia-Pacific Corporate Finance Online Workshop Series 2021
Abstract: The sustainable loan market has flourished amid the widespread issuance of ESG-linked loans with spreads contingent on borrower ESG performance. These loans are issued mostly as revolving credit facilities to large firms with superior ESG profiles by global relationship banks. ESG-linked loans vary widely in the quality of their contractual disclosures, and borrower ESG scores deteriorate after the issuance of low disclosure quality ESG-linked loans. Stock markets respond positively to the announcement of ESG-linked loan issuance only if disclosure quality is high, indicating the importance of transparent disclosure of ESG contingencies in the sustainable lending market.