Yue Yuan   袁越

Hello, I am a PhD candidate in Finance at the London School of Economics.

My research interests are Corporate Finance and Microeconomics.

I will join Tsinghua PBCSF as an Assistant Professor in fall 2021.

Working Papers

Competing with Security Design (job market paper)

Abstract: The literature on security design under information asymmetry predicts that a party with superior information holds an information sensitive stake. This makes it hard to reconcile the prevalence of debt with the fact that most securities in private firms are proposed by professional investors with expertise in screening. I show that competition can drive informed investors to propose debt financing, because debt protects them against the winner's curse. More generally, I observe that the relative degree of competition between firms and investors determines security design, while which party has superior information is a subordinate factor.

Abstract: Almost all firms repurchase shares gradually through open market repurchase (OMR) programs as opposed to using the quicker alternative of tender offers. In contrast, issue methods are both more diverse, and often quicker: while a significant minority of firms issue shares using at-the-market offerings, analogous to OMR programs, a majority of firms issue shares swiftly via SEOs, analogous to the rarely-used tender offer repurchases. We show that this asymmetry in the diversity of methods, and in transaction speeds, is a natural consequence of the single informational friction of a firm having superior information to investors.

Works In Progress

Imperfect Competition of Equity Issuers

Abstract:  I model a market in which the demand curve for equity is downward sloping due to investors’ heterogeneous beliefs and short-sale constraint. Firms with different risk profiles exploit their monopoly power as equity issuers by strategically deciding the amount of their public equity. I derive testable implications: firms that face weaker competition on the equity market (1) have lower expected returns on equity; (2) respond more actively to listings or delistings of competitors; (3) are more eager to merge with competitors.

Social Networks and Loan Repayments, with Christian Julliard, Zhengwei Wang and Kathy Yuan

Abstract: This paper shows that social networks have significant effects on loan repayments. In the loan records of a peer-to-peer lending platform, we proxy social networks based on the contact persons that borrowers provide at loan applications. We estimate the effect of the propensity to pay of a borrower on the propensity to pay of their contact persons using a Spatial Autoregressive Probit model. If the repayment probability of a borrower’s contact persons increases by 10%, the repayment probability of the borrower increases by 0.8%, which increases the lender's profit on average by 360 RMB (i.e. $52). In contrast, a borrower's propensity to pay does not significantly affect the propensity to pay of other borrowers from the same home or work address. We interpret the results as evidence that social networks affect loan repayment decisions beyond common borrower characteristics and financial situations.

Teaching

Teaching Assistant, LSE

FM212 Principles of Finance (undergraduate) Evaluation

FM409 Risk Management in Financial Markets (master, not evaluated)

FM430 Asset Markets (master) Evaluation

FM441 Derivatives (master) Evaluation

FM473 Financial Markets (master, not evaluated)

Teaching Assistant, LSE Summer School

FM230 Alternative Investments

FM250 Finance

FM350 Advanced Corporate Finance

FN209 Corporate Finance in a Global World (PKU campus)

Moderator, LSE

FM403 Management and Regulation of Risk