Research
Working Papers
Can Loan Prices Inform Investment Decisions? Evidence on the Market Feedback Effects (Job Market Paper, Sole-Authored)
Abstract: Using the secondary market prices of syndicated loans, this paper finds that information in loan prices has real effects on corporate investment decisions. For public firms, the sensitivity of capital expenditure to its loan price is significant, after controlling for its stock price. This sensitivity is higher when loan prices are more informative. In making M&A decisions, public acquirers are less likely to withdraw a deal when their loan returns are higher beyond the stock reactions around the deal announcement. These acquirers show strong learning from their stock prices in deals with private targets, only when their loan return is positive. Without access to stock prices, private firms as acquirers change their focus from their public peers’ valuations to their own loan prices as a direct information source. Private acquirers also disclose a potential deal at an early stage when their loan returns are more positive and the target firm has also traded loans. Evidence from earnings call transcripts confirms managerial attention to the secondary loan market. Overall, my findings suggest that the development of an active secondary loan market has important implications for managerial learning from the market and decision-making of firms.
Presentations: 2025 FMA Doctoral Student Consortium, University of South Carolina
Abstract: Using the secondary market prices of syndicated loans, this paper finds that information in loan prices has real effects on corporate investment decisions. For public firms, the sensitivity of capital expenditure to its loan price is significant, after controlling for its stock price. This sensitivity is higher when loan prices are more informative. In making M&A decisions, public acquirers are less likely to withdraw a deal when their loan returns are higher beyond the stock reactions around the deal announcement. These acquirers show strong learning from their stock prices in deals with private targets, only when their loan return is positive. Without access to stock prices, private firms as acquirers change their focus from their public peers’ valuations to their own loan prices as a direct information source. Private acquirers also disclose a potential deal at an early stage when their loan returns are more positive and the target firm has also traded loans. Evidence from earnings call transcripts confirms managerial attention to the secondary loan market. Overall, my findings suggest that the development of an active secondary loan market has important implications for managerial learning from the market and decision-making of firms.
Presentations: 2025 FMA Doctoral Student Consortium, University of South Carolina
Does Climate Change Affect Retail Investors? Your Opinion Matters (with Ai He)
2025 FMA Semifinalist of the Best Paper in Asset Pricing & Investments
Abstract: We examine how beliefs and concerns about climate change influence retail investment behavior. Using a decade of county-level data on public opinions regarding global warming across the United States, we construct a novel firm-level measure capturing retail investors’ climate change opinions. We find that, following the disclosure of firm-level climate risk incidents, firms with retail investor bases that hold pro- climate-change opinions experience a significant decline in retail net demand, evident in both retail investors’ marketable orders from TAQ and individual security positions from Robinhood Markets. Such effect is driven by egoistic and altruistic opinions, support for renewable energy, and endorsement of government and school initiatives. In contrast, no similar effect is observed for other environmental or social (ES) risk incidents that are not directly linked to climate change. This effect is more pronounced for firms with characteristics associated with investor local bias and is not driven by demographics or political leanings of retail investors. Our findings suggest that retail investors integrate their opinions about climate change into stock investment and risk management decisions.
Presentations: 2025 FMA, 2025 Alpine Finance Summit, 2025 EasternFA, 2025 Baruch-JFQA Climate Finance and Sustainability Conference (Poster), Emory University, University of South Carolina
2025 FMA Semifinalist of the Best Paper in Asset Pricing & Investments
Abstract: We examine how beliefs and concerns about climate change influence retail investment behavior. Using a decade of county-level data on public opinions regarding global warming across the United States, we construct a novel firm-level measure capturing retail investors’ climate change opinions. We find that, following the disclosure of firm-level climate risk incidents, firms with retail investor bases that hold pro- climate-change opinions experience a significant decline in retail net demand, evident in both retail investors’ marketable orders from TAQ and individual security positions from Robinhood Markets. Such effect is driven by egoistic and altruistic opinions, support for renewable energy, and endorsement of government and school initiatives. In contrast, no similar effect is observed for other environmental or social (ES) risk incidents that are not directly linked to climate change. This effect is more pronounced for firms with characteristics associated with investor local bias and is not driven by demographics or political leanings of retail investors. Our findings suggest that retail investors integrate their opinions about climate change into stock investment and risk management decisions.
Presentations: 2025 FMA, 2025 Alpine Finance Summit, 2025 EasternFA, 2025 Baruch-JFQA Climate Finance and Sustainability Conference (Poster), Emory University, University of South Carolina
A Portrait of SPAC Sponsors: Their Affiliations and Impact on Deal Outcomes (Sole-Authored)
Abstract: The sponsor of a special purpose acquisition company (SPAC) plays an important role in setting up the SPAC and in searching for a private target firm in the deSPACing process. A SPAC sponsor works or competes with an established investment bank in bringing a private firm to the public market. Besides being criticized for receiving high returns, whether they have an impact on deal outcomes remains unknown, and their role in shaping up the investment banking landscape for IPOs is under-studied. This paper fills the gap by uncovering how PE-affiliated sponsors attempt to improve merger outcomes by identifying good-quality private firms via a new listing path. Their performance provides evidence on how rational SPAC deals may benefit both private firms that plan to go public and investors who are interested in investing in private firms.
Presentations: University of South Carolina
Abstract: The sponsor of a special purpose acquisition company (SPAC) plays an important role in setting up the SPAC and in searching for a private target firm in the deSPACing process. A SPAC sponsor works or competes with an established investment bank in bringing a private firm to the public market. Besides being criticized for receiving high returns, whether they have an impact on deal outcomes remains unknown, and their role in shaping up the investment banking landscape for IPOs is under-studied. This paper fills the gap by uncovering how PE-affiliated sponsors attempt to improve merger outcomes by identifying good-quality private firms via a new listing path. Their performance provides evidence on how rational SPAC deals may benefit both private firms that plan to go public and investors who are interested in investing in private firms.
Presentations: University of South Carolina
The Paycheck Protection Program (PPP) from the Small Business Perspective: Did the PPP Help Alleviate Financial and Economic Constraints? (with John Ampong, Allen N. Berger, Paul G. Freed, Zheyu Qi, and Jonathan A. Scott)
Abstract: We employ two novel datasets to evaluate whether the Paycheck Protection Program (PPP) met short-term and longer-term goals. One dataset matches PPP with small business members of the National Federation of Business (NFIB) that report their financial constraints and their employees’ economic constraints. We find more alleviation of both constraints for PPP recipients, consistent with short-term goals. We employ data on post- versus pre-crisis county employment, wages, and new businesses to test the longer-term goal of improved community crisis recoveries from the short-term constraint relief. We find to the contrary, worse longer-term recoveries in counties with more short-term constraint relief.
Presentations: 2022 SFA, 2022 FMA, Temple University, University of South Carolina
Abstract: We employ two novel datasets to evaluate whether the Paycheck Protection Program (PPP) met short-term and longer-term goals. One dataset matches PPP with small business members of the National Federation of Business (NFIB) that report their financial constraints and their employees’ economic constraints. We find more alleviation of both constraints for PPP recipients, consistent with short-term goals. We employ data on post- versus pre-crisis county employment, wages, and new businesses to test the longer-term goal of improved community crisis recoveries from the short-term constraint relief. We find to the contrary, worse longer-term recoveries in counties with more short-term constraint relief.
Presentations: 2022 SFA, 2022 FMA, Temple University, University of South Carolina
Work in Progress
Mutual fund private firm investments and loan financing (with Donghang Zhang)
Status: We compile a comprehensive dataset on the universe of U.S. active mutual fund investments in private firms, and link it with DealScan. The preliminary results show that private firms with loans and with traded loans are priced differently from non-borrowers based on the valuations of mutual fund investors. Our evidence sheds light on the consequences of blurring the boundaries of private and public companies.
Status: We compile a comprehensive dataset on the universe of U.S. active mutual fund investments in private firms, and link it with DealScan. The preliminary results show that private firms with loans and with traded loans are priced differently from non-borrowers based on the valuations of mutual fund investors. Our evidence sheds light on the consequences of blurring the boundaries of private and public companies.