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
Are Retail Investors Penalizing Dirty Energy? (with Ai He)
2025 FMA Semifinalist of the Best Paper in Asset Pricing & Investments
Abstract: We examine how retail investors' opinions about renewable energy and climate change shape investment behavior in energy finance. Using a decade of U.S. county-level survey data, we construct novel firm-level measures that capture retail investors' energy- and global-warming-related opinions. We find that, following the disclosure of firm-level dirty energy incidents, firms experience a significant decline in retail net demand when their retail investors are supportive of renewable energy, believe in global warming, or are concerned about climate change. This pattern is evident in both marketable retail orders from TAQ and user records from Robinhood Markets. In contrast, we do not find a comparable effect of these opinions for incidents that are risky but unrelated to energy activities. The results are not driven by local demographic characteristics, regulatory stringency, or political leanings. Overall, our findings suggest that energy finance is meaningfully influenced by investor views on energy and climate.
Presentations: FMA Asia/Pacific*, 2025 NTHU-UNSW-SMU Symposium on Sustainable Finance and Economics*, 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 retail investors' opinions about renewable energy and climate change shape investment behavior in energy finance. Using a decade of U.S. county-level survey data, we construct novel firm-level measures that capture retail investors' energy- and global-warming-related opinions. We find that, following the disclosure of firm-level dirty energy incidents, firms experience a significant decline in retail net demand when their retail investors are supportive of renewable energy, believe in global warming, or are concerned about climate change. This pattern is evident in both marketable retail orders from TAQ and user records from Robinhood Markets. In contrast, we do not find a comparable effect of these opinions for incidents that are risky but unrelated to energy activities. The results are not driven by local demographic characteristics, regulatory stringency, or political leanings. Overall, our findings suggest that energy finance is meaningfully influenced by investor views on energy and climate.
Presentations: FMA Asia/Pacific*, 2025 NTHU-UNSW-SMU Symposium on Sustainable Finance and Economics*, 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.
The effect of confidential filings on firm evolution (with Austin Starkweather and Donghang Zhang)
Status: We study how the confidential filing and testing-the-waters provisions introduced in the JOBS Act affect information production and disclosure, ultimately shaping capital formation in the IPO market. We construct text-based similarity scores between different versions of offering filings and examine the effects of these two regulatory changes on firms’ disclosure practices, IPO underpricing, and sizes.
Status: We study how the confidential filing and testing-the-waters provisions introduced in the JOBS Act affect information production and disclosure, ultimately shaping capital formation in the IPO market. We construct text-based similarity scores between different versions of offering filings and examine the effects of these two regulatory changes on firms’ disclosure practices, IPO underpricing, and sizes.