Research

Selected Published & Forthcoming Papers

Papers below are split by topic and then chronologically within topic.

Financial Regulation & Policy Design

1. "Does Regulatory Jurisdiction Affect the Quality of Investment-Adviser Regulation?" with Alan Kwan and Tarik Umar. (2019). American Economic Review (2020 IF: 9.2). 109(10):3681-3712. DOI: 10.1257/aer.20180412. (Official Link. Referred to by a statement by SEC Commissioner Robert Jackson on June 5, 2019, and cited in the proposed Fiduciary Duty Rule from the US Department of Labor - Billing Code 4510-29-P.) Current Google Citations.

   • Investment advisers switching from SEC to state regulator oversight due to the Dodd-Frank Act had around 30-40% more misconduct.

2. "Social connections with COVID-19-affected areas increase compliance with mobility restrictions" with Alan Kwan and Vesa Pursiainen.  (2020). Science Advances (2020 IF: 13.1). 6(47):1-10. DOI: 10.1126/sciadv.abc3054.  (Data: Facebook Data For Good. Media: 7th Space Family Portal, ScienMag, The Tyee, Daily Kos. NUS Links to the Research Summary: LinkedIn, Twitter, YouTube, Telegram.) Current Google Citations.

   •  A one-standard-deviation increase in social connections with China and Italy - the first countries with major outbreaks of the virus – increases the effectiveness of mobility restrictions by around 50%.

3. "Bank of Japan Equity Purchases: The (Non-)Effects of Extreme Quantitative Easing" with Randall Morck and Yupana Wiwattanakantang. (2021). Review of Finance (2021 IF: 5.1). 25(3):713-743. (Twitter🧵. Official Journal Link. Research Digest. Referenced in a 2021 French Council of Economic Analysis report on what the ECB can do. Cited by the Feb 2020 Monetary Dialogue titled "Financial Stability in the Euro Area: Assessment of Risks and Policy Options") DOI: 10.1093/rof/rfaa029. (Runner-up for the IQAM Prize for the best investments paper in 2020/2021. Included in CFA Institute's report on ETFs and Systemic Risks. How it relates to Oct 2023 China sovereign wealth fund buying ETFs. NUS C-EMBA Weixin Post.) Current Google Citations.

   • The BOJ ETF purchase policy seems to have price effects but firms appear to "cash in" rather than increase tangible capital investment or R&D spending.

4. "Not Coming Home: Trade and Economic Political Uncertainty in American Supply Chain Networks" with Jing Wu and Miaozhe Han. (2022). Manufacturing & Service Operations Management (2020 IF: 7.6) 25(1): 126-147. DOI: 10.1287/msom.2022.1136. (Official Journal Link. Twitter🧵.Media: Sina, Reuters, CUHK Blog, The Economist, Viet Nam News, SME.Asia) Current Google Citations.

   • Rather than move supply chain networks home, higher U.S. trade policy uncertainty instead predicts more supply chain movements abroad.

5. "Non-Performing Loan Disposals without Resolution" with Tianyue Ruan and Miao Meng. (2023). Accepted at Management Science (2022 IF: 5.4). (Twitter🧵 & Follow-Up Tweet on the relevant 2021 National Audit Office Report. World Bank Blog, The Economist, The Economist again in 2024, The Indian Express, Epsilon Theory, ABFER Research Digest. Lawfirm Blog. Global Source Partners analysis on our paper. Cited in the Japanese Cabinet Office Economic Trend Report in 2023.) Current Google Citations.

   • NPL transactions from banks to local asset management companies end up in the hands of bank borrowers, still exposing them to substantial financial distress risk.

   • Our findings of illicit bad debt concealment (originally written in 2020 and accepted at MS in October 2023) are validated by the National Administration of Financial Regulation of China (NAFR)'s December 2023 regulatory fines on several banks. For instance, China Citic Bank was fined 220+ million yuan (31+ million USD) for 56 violations. Citic Bank’s regulatory violations include several mismanagements of non-performing loans (NPLs), including inaccurate risk classification, fake transfers, & engaging other entities to hold its NPLs with quid pro quo. Agricultural Bank of China (ABC) was fined 27 million yuan for 13 violations, 2 of which are similar mismanagement of NPLs.

Digital Economy and FinTech

6. "The Impact of ride-hail surge factors on taxi bookings" with Sumit Agarwal, Shih-Fen Cheng, and Jussi Keppo. (2022). Transportation Research Part C: Emerging Technologies (2022 IF: 15.5). 136(March):103508. DOI: 10.1016/j.trc.2021.103508 (Twitter🧵. Official Journal Link.) Current Google Citations.

   • Incorporating surge factor data improves demand prediction and allocation of incumbent taxi providers and improves allocative efficiency.

7. "Positive Risk-Free Interest Rates in Decentralized Finance" with Mike Kirby and Jonathan Reiter. (2023). 2023 Fifth International Conference on Blockchain Computing and Applications (BCCA). DOI: 10.1109/BCCA58897.2023.10338890 (Referenced in a blog post here and here by David Rosenthal (ex-Chief Scientist of Nvidia), related Twitter🧵, Referenced in a Coppola Comment post by Frances Coppola) (Official Journal Link.)

   • Turing-complete languages face a halting problem a la Turing (1937), which also applies to whether a smart contract can be set up to guarantee a risk-free payment.

8. "Computer Science Abstractions To Help Reason About Decentralized Stablecoin Design" with Mike Kirby and Jonathan Reiter. (2023). IEEE Access (2022 IF: 3.476). 11:103201-103213. DOI: 10.1109/ACCESS.2023.3317891. (Referenced in a blog post here by David Rosenthal (ex-Chief Scientist of Nvidia), Media: Seeking Alpha, Blockhead). Current Google Citations.

   • We show that algorithmic stablecoins cannot be both safe and capital-efficient at the same time.

9. "Investment Plans, Uncertainty, and Misallocation" with Alan Kwan, Yosuke Kimura, and Eugene Tan. (2023). Journal of Financial Economics. (2022 IF: 8.9) 153(March 2024, 103779). DOI: 10.1016/j.jfineco.2024.103779. (Official Journal Link. Twitter 🧵) Current Google Citations.

   • Firms' investment plans appear important for actual investment and respond to intra-fiscal year firm-level economic conditions, implying existing macroeconomic models with imperfect information overstate the importance of informational frictions.

10. "RegTech: Technology-Driven Compliance and its Effects on Profitability, Operations, and Market Structure" with Zach Kowaleski, Alan Kwan, and Andrew Sutherland. Journal of Financial Economics (2022 IF: 8.9). 154(April 2024, 103792). (Official Journal Link. Oxford Business Law Blog. MIT Ideas Made to Matter. FintechImpact Podcast. Dash RegTech Insights 2022. UT Austin Medium Summary (Re-printed at TechXplore, MSN, CompsMag, and JoyK). Twitter🧵. Another Twitter🧵) Current Google Citations.

    • Rule 17-5a compelled financial advisers to invest in regtech software, which decreased misconduct but may increase the market power of larger firms.

Working Papers

1. "Public Forecasts, Internal Projections, and Corporate Financial Policy" with Alan Kwan and Yosuke Kimura. (R&R Review of Finance)

   • Presentations: AFA 2021, SFS Asia-Pacific 2019, Greater Bay Area Finance 2019, 2020 Japanese Economic Association Meeting, HKU, Renmin University, SAIF, CityUHK, HKUST

   • Compared to internal forecasts, public forecasts appear biased to trade-off between optimism in case of financial constraints versus pessimism to receive higher managerial payoffs.

2. "Decentralized Finance and Financial Regulation: Limits On Mutable Turing Machines" with Mike Kirby and Jonathan Reiter. (R&R Scientific Reports)

   • We study how decentralized finance architectures can be regulated and show that compliance requires compromising on the richness of permissible changes. 

3. "Government Support and the Production of Covid-Related Products Under Uncertainty" with Alan Kwan and Jing Li. (R&R Journal of Operations Management)

   • Presentations: CORS-INFORMS, ESSEC BizGov 

   • The heightened demand from website visits on a B2B platform predicts supplier entry from adjacent products, and the effect is three times stronger compared to the average when we focus on government searches.

4. "Ownership Networks and Bid-Rigging" with Kentaro Asai. (Twitter🧵. Blog. Media: Business Times. Received ~US$40,000 grant from the Gov't of Japan.)

   • Presentations: 2019 Econometric Society Australasian Meeting, 2019 APIOC, ANU, University of Tokyo, Hitotsubashi

   • The effect of common ownership networks in public auctions on bid-rigging appears to increase the prices that government agencies pay.

5. "Active Mutual Fund Common Owners' Returns and Proxy Voting Behavior" with Zhenghui Ni and Qiaozhi Ye. 

   • Presentations: EFA Poster 2023, NFI-Oxford Conference on Common Ownership, Experimental IO and Governance 2023, UIUC, MFA 2023, Singapore Scholar Symposium 2022, ABFC 2022,  ISAFE 2022, CFAM 2022, FMCG 2022, AsianFA 2022, NUS RMI 2021

   • Actively managed mutual funds investing with more common ownership have higher returns (gross and net of fees) and vote to reduce executive pay-performance sensitivity and for directors with appointments at competitors. 

6. "Foregone Consumption and Return-Chasing Investments" with Sumit Agarwal and Pulak Ghosh. 

   • Presentations: EFA 2020, Boulder Household Conference 2019

   • Investors chase positive headline stock market index returns on the upside by increasing investment and decreasing consumption but do not respond on the downside.

7. "The BigTech-Banking Lending Ecosystem" with Yiyao Wang. (Asian FA 2023 Best Paper Award). (Submitted)

   • Presentations: CICF 2021, RMI 2021 Annual Meeting, AsianFA 2023, KAIST, Yonsei, SKKU, SNU, VBFS, Global AI in Finance 2023, AFBC 2023

   • Fintech lenders with alternative data or better credit risk models than banks but with higher funding costs can increase social welfare by sharing data with them.

8. "The Trickle-Down Effect of Government Debt and Social Unrest"

   • Presentations: INSEAD, EFA 2023, ADBI, IMF Asia-Pacific Group, Reserve Bank of Australia, ABFER 2022, ADBI

   • I examine the social costs of local government debt in China by analyzing the delay in procurement payments to contractors and the resulting impact on firm fundamentals and employee actions.

9. "Reducing Small Entities’ Information Disadvantage and Patent Abandonment with Online Accessibility" with In Gyun Baek and Yupeng Lin.

   • Presentations: CUHK, HK Baptist, SUSS (Shenzhen), Yonsei, APCFOW

   • An online tool summarizing publicly available information on patent examiners in a user-friendly way appears to reduce information disadvantages faced by small firms by reducing their application abandonment when their examiners are lenient and increasing abandonment when their examiners are strict.

Book Chapters/Sections

1. Charoenwong, B., and Mario Bernardi (2024). "A Decade of Cryptocurrency 'Hacks': 2011 - 2021". In H. Cronqvist, D.J. Pely (Ed.), The Elgar Companion to Decentralized Finance, Digital Assets and Blockchain Technologies. Edward Elgar Publishing. ISBN: 9781035307753. Current Google Citations. SSRN version.

2. Charoenwong, B., and Alan Kwan (2021). "Alternative Data, Big Data, and Applications to Finance". In P. Moon Sub Choi, S. H. Huang (Ed.), Fintech with Artificial Intelligence, Big Data, and Blockchain. Springer. Print ISBN: 978-981-33-6136-2, Online ISBN: 978-981-33-6137-9.  DOI: https://doi.org/10.1007/978-981-33-6137-9_2Current Google Citations.

3. Charoenwong, B. (2021). COVID-19 in the global production network. In S. Agarwal, Z. He, B. Yeung (Ed.), Impact of COVID-19 on Asian economies and policy responses. (1st ed., pp. 172). World Scientific. https://doi.org/10.1142/12072.