Working Paper @SSRN

1. Options Trading and Corporate Debt Structure (with Jie Cao, Michael Hertzel, and Xintong Zhan)

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Abstract Recent empirical studies find that options trading enhances firm value by allowing for a more efficient allocation of firm resources. In this paper, we develop and test the hypothesis that, in addition to a more efficient allocation of firm resources, options trading also enhances firm value through a financing channel, by promoting a debt structure that relies more on public debt and less on more expensive bank financing. Consistent with the hypothesis that enhanced informational efficiency associated with options trading reduces the demand for superior information processing and creditor governance from bank loans, we find active equity options trading leads firms to shift from bank loans to public bonds. The results are concentrated in firms with high information asymmetry.

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Presented at Arizona State University, The Chinese University of Hong Kong, Zhejiang University, China International Risk Forum 2019, FMA Asia/Pacific 2019, FMA Europe 2019, FMA Annual meeting 2019 (Semifinalist for Best Paper Award), Fifth Annual Volatility Institute at NYU Shanghai (VINS) Conference 2019, Wuhan University 2019 Fall Corporate Finance Workshop, The 2nd China International Forum on Finance and Policy, NFA 2020 (Best Paper Award on Derivatives), and AFA (2021)

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2. Say on Pay Proposal and Mergers and Acquisitions (with Si Li and Xintong Zhan)

3. The Unintended Impact of Semi-Mandatory Payout Policy in China

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Presentations

• 2nd China International Forum on Finance and Policy, 2019

• Arizona State University, 2019

• FMA Annual Meeting, 2019

• FMA Asia/Pacific, 2019

• The Chinese University of Hong Kong, 2017& 2018 & 2019

• NFA, 2020

• FMA Europe*, 2019

• Fifth Annual Volatility Institute at NYU Shanghai (VINS) Conference*, 2019

• China International Risk Forum (CIRF)*, 2019

• Zhejiang University*, 2019

• Wuhan University 2019 Fall Corporate Finance Workshop*, 2019

• AFA, 2021* (* presentation by coauthor)