Current Research
Working Papers:
Credit Disruptions, Debt Maturity, and Investment Dynamics. (Job Market Paper)
with Tianyue Zhao
Presentations: WEAI 2025; ASSA 2026 (Poster Session).
Abstract: This paper investigates the impact of bank credit disruptions on firm investment through the corporate debt maturity channel during the 2008–2009 financial crisis. Using detailed firm-bank data from Compustat and Dealscan, we construct firm-specific measures of exposure to bank credit tightening following the Lehman Brothers collapse. Using a difference-in-differences empirical approach, we discover that companies borrowing from banks that experienced more substantial decreases in credit availability tend to shorten their debt maturities, thereby increasing their dependence on short-term liabilities. This forced shift toward shorter maturities substantially reduces firms' investment, accounting for a large fraction of the overall decline observed during the crisis. To study the mechanism behind these empirical relationships, we develop a structural model in which firms optimally select debt maturities and investment levels under varying credit market conditions. Quantitative simulations highlight that pro-cyclical fluctuations in credit supply influence firm investment by exacerbating rollover risks through shortened debt maturities. Our findings underscore the importance of the debt maturity channel in propagating credit supply shocks to the macroeconomy and have clear implications for policies aimed at stabilizing corporate credit markets during financial downturns.
Time to Build and Optimal Debt Maturity Choice.
Presentations: ASSA 2026 (Business Cycles and Investment Session).
Abstract: This paper studies a dynamic firm model in which investment is subject to time-to-build and therefore creates a pipeline of unfinished projects. While projects remain in the pipeline, the firm incurs build costs but does not yet receive the full cash-flow benefit of completed capital. The firm finances investment and operations using a combination of short-term debt and long-term debt, and may default when continuation value is low. Debt prices are determined competitively based on expected discounted payoffs with construction stage-dependent recovery that depends on both installed capital and the pipeline. The model generates state-dependent maturity choice, spreads, and default risk. Quantitative analysis highlights how pipeline composition shifts maturity structure and how productivity shocks propagate through rollover pressure, spreads, investment starts, and default risk measures.
Reversing the Flow: How Does Monetary Policy Transmit from Firms to Financial Intermediaries?
with Bhavyaa Sharma and Harrison Shieh
Work in Progress:
Policy News Shocks and Monetary Policy: Evidence from China
with Harrison Shieh
Credit Disruptions, Debt Maturity, and Investment Dynamics. (Job Market Paper)
with Tianyue Zhao
Presentations: WEAI 2025; ASSA 2026 (Poster Session).
Abstract: This paper investigates the impact of bank credit disruptions on firm investment through the corporate debt maturity channel during the 2008–2009 financial crisis. Using detailed firm-bank data from Compustat and Dealscan, we construct firm-specific measures of exposure to bank credit tightening following the Lehman Brothers collapse. Using a difference-in-differences empirical approach, we discover that companies borrowing from banks that experienced more substantial decreases in credit availability tend to shorten their debt maturities, thereby increasing their dependence on short-term liabilities. This forced shift toward shorter maturities substantially reduces firms' investment, accounting for a large fraction of the overall decline observed during the crisis. To study the mechanism behind these empirical relationships, we develop a structural model in which firms optimally select debt maturities and investment levels under varying credit market conditions. Quantitative simulations highlight that pro-cyclical fluctuations in credit supply influence firm investment by exacerbating rollover risks through shortened debt maturities. Our findings underscore the importance of the debt maturity channel in propagating credit supply shocks to the macroeconomy and have clear implications for policies aimed at stabilizing corporate credit markets during financial downturns.
Time to Build and Optimal Debt Maturity Choice.
Presentations: ASSA 2026 (Business Cycles and Investment Session).
Abstract: This paper studies a dynamic firm model in which investment is subject to time-to-build and therefore creates a pipeline of unfinished projects. While projects remain in the pipeline, the firm incurs build costs but does not yet receive the full cash-flow benefit of completed capital. The firm finances investment and operations using a combination of short-term debt and long-term debt, and may default when continuation value is low. Debt prices are determined competitively based on expected discounted payoffs with construction stage-dependent recovery that depends on both installed capital and the pipeline. The model generates state-dependent maturity choice, spreads, and default risk. Quantitative analysis highlights how pipeline composition shifts maturity structure and how productivity shocks propagate through rollover pressure, spreads, investment starts, and default risk measures.
Reversing the Flow: How Does Monetary Policy Transmit from Firms to Financial Intermediaries?
with Bhavyaa Sharma and Harrison Shieh
Work in Progress:
Policy News Shocks and Monetary Policy: Evidence from China
with Harrison Shieh