Programs
Admissions
Faculty & Research
Student
Alumni
International
Institutes
About

Full-time Faculty

Faculty CV

Li An

PERSONAL  PROFILE 

Bo Li is an Associate Professor of Finance at PBC School of Finance, Tsinghua University. Li’s primary research interests are in corporate finance, political economy, and economic history. She has special interests in technology adoption and talent allocation in emerging markets especially China, and in the interaction between governments, institutions, and firms. Her recent research covers emerging topics include anti-corruption, bankruptcy law, industrial policies, and venture capital market particularly in China. Her research has been published in various leading academic journals, such as the Review of Finance, the Journal of Law, Finance, and Accounting. Li holds a PhD in Economics from Queen’s University, an MSc in Economics from the University of British Columbia, a BA in Economics from the Western University.


EDUCATION 

Queen’s University                        Ph.D.  Economics          Oct.  2013

University of British Columbia       M.A.    Economics          June 2006

University of Western Ontario       B.A.     Economics         June  2005 

 

PROFESSIONAL  EXPERIENCE 

ACADEMIC POSITIONS

2021-present                            Associate Professor of finance, PBC School of Finance

2014-2021                                Assistant  Professor of finance, PBC School of Finance


FIELDS OF INTEREST 

Political Economy, Bankruptcy and Financial Distress, Technology, Venture Capital, Human Capital and Training

  

TEACHING

PH.D. level Empirical Corporate Finance

PH.D. Thesis Workshop

 

AWARDS, PRIZES AND HONORS

- First Prize in the Pagano-Zechner Award for the Best Non-Investments Paper  in the Review of Finance    2022

- Tsinghua University Award for Excellence in Online Teaching during the COVID                                           2020

- China Financial Research ConferenceBest Paper Award                                                                               2019


GRANTS 

- National Think Tank: How Bank Credit Facilitates Low Carbon                                                                    2022

- BFI, Becker Friedman Institute for Economics (talent)                                                                                  2022

- Beijing Municipal Bureau of Commerce's Grant on Financial Indicators                                                       2022

- Beijing Municipal Bureau of Commerce's Grant on Financial Indicators                                                       2021

- National Think Tank: Governance of State-owned Enterprises                                                                     2021

- BFI, Becker Friedman Institute for Economics (government responsiveness)                                              2021

- BFI, Becker Friedman Institute for Economics (venture capital)                                                                    2020

- National Natural Science Foundation of China: Chinese capital Market                                                       2018

- Financial Innovation and Supervision in the Context of Globalization                                                           2018


PUBLICATIONS

Senior Lender Control: Monitoring Spillover or Creditor Conflict? (with Wei Wang and Lynnette Purda)Journal of Law, Finance, and Accounting, 2018, 3, 373-411.

Abstract: This paper studies the effect of senior lender control, as measured by bank loan covenants, on the pricing of new bond issues. We find a U-shaped relation between the number of financial covenants on a firm’s loan contract and the bond yield spread. Our results suggest that bondholders initially value the monitoring benefits derived from loan covenants; as lender control becomes excessive, however, bondholders require compensation for the risk of losses due to creditor conflicts. Our heterogeneity tests show that the positive relation between bond yield and loan covenants is  stronger when bond holding is more dispersed, for firms with higher default risk or better corporate  governance as well as in the absence of relationship lenders.


Going Bankrupt in China (with Jacopo Ponticelli), Review of Finance, 2022, 26, 449–486. 

Harvard Law School Bankruptcy Roundtable, Oxford Business Law Blog, Vox and Vox China  

Abstract: Using a new case-level dataset we document a set of stylized facts on bankruptcy in China  and study how the staggered introduction of specialized courts across Chinese cities affected  insolvency resolution and the local economy. For identification, we compare bankruptcy cases handled by specialized versus traditional civil courts within the same city and filed in the same year. We find that specialized courts decrease case duration by 36% relative to traditional civil courts. We provide evidence consistent with court specialization increasing efficiency via selection of better trained judges and higher judicial independence from local politicians. We document that cities introducing specialized courts experience a relative reallocation of employment out of zombie firms-intensive  sectors, as well as faster firm entry and a larger increase in average capital productivity.


WORKING  PAPERS

Investing with the Government: A Field Experiment in China (with Emanuele Colonnelli and Ernest Liu), 2022, NBER Working paper 30161. Journal of Political Economy R&R.

Abstract: We study the demand for government participation in financial markets. Focusing on the venture capital and private equity industry in China, we design a non-deceptive field experiment in collaboration with the leading industry organization, through which we conduct 1,000 experimental surveys of both sides of the market: the capital investors (LPs) and the private firms that manage the invested capital by deploying it to high-growth firms (GPs). Our respondents together account for nearly $1 trillion in assets under management. Each respondent evaluates hypothetical profiles of they will be introduced to real partners matching their preferences. We document that the average GP dislikes LPs with government ties, indicating that the benefits of political connections are small compared to the cons of having the government as an investor. To unpack channels, we show that such dislike is not present for government-owned GPs and conduct additional surveys of our respondents, which together suggest the presence of interference in decision-making to be a leading mechanism why government capital is unattractive to private GPs. On the other hand, we find that the average LP prefers GPs that have a government-related LP as an investor. To illustrate the importance of accounting for differential demand for government capital, we first establish two stylized facts using administrative data: government LPs are more likely to match with government-owned GPs, and government-owned GPs generate lower returns. We then discuss the equilibrium impact of government participation on market outcomes by developing a two-sided search and matching model and conducting simple policy counterfactuals.


China’s Anti-Corruption Campaign and Credit Reallocation from SOEs to Non-SOEs (with  Zhengwei Wang and Hao Zhou), 2021, Review of Finance R&R.  

Abstract: This paper uses publicly released audit reports to study the effects of disclosing information about corruption practices on credit market. We provide a novel empirical finding that the public disclosures during China’s recent anti-corruption crackdown lead to bank credit reallocation—from less productive state-owned enterprises (SOEs) to more productive non-SOEs. We estimate both a  direct effect on implicated firms and a spillover effect within the exposed industries. Using hand-collected data set on the enforcement outcomes, we show that the audits operate via a deterrent effect  on lenders to avoid perceived costs of engaging in corruption, through the state-owned banks using  loan-level data. Firm investments are more responsive to released audit reports relative to governance  measures. However, the previous anti-corruption campaign is muted on a credit reallocation effect. Our findings highlight the value of having a more informed audit program in enhancing efficiency in  credit market.


Borrowing from Friends of Friends: Indirect Social Networks and Bank Loans (with Sterling Huang, Massimo Massa and Hong Zhang), 2021, Management Science R&R.

Abstract: We examine how indirect connections (i.e., friends of friends), an important yet understudied feature of social networks, may affect bank loan contracts. Based on the sample of loans issued by U.S. public firms, we find that indirect connections built on board interlocks can significantly reduce loan spreads. A novel difference-in-difference test exploiting the death and quasi- exogenous retirement of directors lends support to a causal interpretation. Bank monitoring, loan quality, and firm investments are negatively affected, suggesting that indirect connections may give rise to a favoritism treatment by banks.

Bankruptcy Resolution in China (with Kose John, Edith Hotchkiss, Jacopo Ponticelli, and Wei  Wang), invited for Annual Review of Financial Economics.


Technology Transfer and Early Industrial Development: Evidence from the Sino-Soviet  Alliance (with Michela Giorcelli), 2021, NBER Working paper 29455. 

Abstract: This paper studies the causal effect of technology and knowledge transfers on early industrial development. Between 1950 and 1957, the Soviet Union supported the “156 Projects” in China for the construction of technologically advanced, large-scale, capital-intensive industrial facilities. We exploit idiosyncratic delays in project completion and the unexpected end of the Sino-Soviet Alliance, due to which some projects received Soviet technology embedded in capital goods and know-how, while others were eventually realized by China alone using domestic technology. We find that receiving  both Soviet technology and know-how had large, persistent effects on plant performance, while the  effects of receiving only Soviet capital goods were short-lived. The intervention generated horizontal  and vertical spillovers, as well as production reallocation from state-owned to privately owned  companies since the late 1990s.


The Political Economy of Anti-Bribery Enforcement (with Lauren Cohen), 2021, NBER Working paper 29624.

Abstract: This paper documents novel evidence on the influence of political incentives in the regulatory enforcement of foreign bribery. Using case-level data from the U.S. Securities and  Exchange Commission and U.S. Department of Justice, we find strategic discretion in the timing of  enforcement in the years leading up to a Senate election against foreign firms in the Senator’s state. The probability of a Foreign Corrupt Practices Act (FCPA) enforcement action against foreign firms  located in the state increase significantly, spiking 23%, but zero for U.S. firms domiciled in the same  states. We use exogenous variation in the timing and geographic location of U.S. Congressional elections to establish identification of our effects at the fine geographic level. Larger discretion occurs  in regions where foreign firms are larger global competitors of in- state firms, operate in locally  important industries, and when Senators serve as the Chairman of the Senate Judiciary Committee. Anti-bribery enforcement has electoral implications, leading to greater vote shares for the Senator in power, coupled with spikes in media coverage. Moreover, the cases pushed through against these  foreign firms just prior to elections appear to be weaker cases. The enforcements result in real effects, as in response to strategic timing in enforcement, firms reallocate business segments and sales.


Bankruptcy Resolution and Cost of Debt: Evidence from Bond Market in China (with Mai Li, Songnan Li, and Laura Liu), 2022.

Abstract: Using the staggered introduction of regional specialized debt recovery courts as a quasinatural experiment, we estimate the causal effect of bankruptcy judicial enhancement on the financing cost of corporate bonds in China. We find that the introduction of specialized courts reduces the bond regional-, firm-, and bond-level, as well as the unexpected bond default event associated with Yongcheng Coal Power Holding Group Co., Ltd (YCP) in November 2020. We show that the decrease in bond financing cost after the introduction of specialized courts is stronger when the exante default risk is high. We further investigate the debt resolution channel and show that specialized courts speed up the default resolution process. Our findings indicate that the quality of court enforcement has implications on the treatment of firms when entering financial distress in China.


Work in Progress

The (Mis)allocation of Talent in China (with Emanuele Colonnelli, Tommaso Porzio and Sixun Tang).

The Rent Sharing in Venture Deals (with Emanuele Colonnelli)

 

PRESENTATIONS

Senior Lender Control: Monitoring Spillover or Creditor Conflict? (with Wei Wang and Lynnette Purda), Journal of Law, Finance, and Accounting, 2018, 3, 373-411. 

Presented at Ivey-Smith workshop, American Law and Economics Association, CICF, Journal of  Law, Finance, and Accounting (JLFA), NFA, FMA 

Going Bankrupt in China (with Jacopo Ponticelli), Review of Finance,  26, 449–486.

Harvard Law School Bankruptcy Roundtable, Oxford Business Law Blog, Vox and Vox China  

Presented at: NBER, AFA, Chicago Booth Political Economy of Finance Conference, SFS Cavalcade Asia, ABFER Singapore, NYU, Tsinghua University, CFRC, CICF, CKGSB 


Investing with the Government: Evidence from Three Field Experiments (with Emanuele Colonnelli and Ernest Liu), 2022, NBER Working paper 30161. Journal of Political Economy R&R.

Presented at: Princeton, EIEF, UChicago, ITAM, Tsinghua University, SFS Cavalcade, ABFER-BFI China Capital Market Development Series, ABFER Annual Conference, WEFIDEV, the Five Star Junior Conference at CUHK, and the Kentucly Finance Conference


China’s Anti-Corruption Campaign and Credit Reallocation from SOEs to Non-SOEs (with Zhengwei Wang and Hao Zhou), 2021, Review of Finance R&R.

ProMarket Stigler 

Presented at: at NBER Summer Institute, CICF, CFRC, NYU, CREST Paris, Graduate Institute Geneva Workshop, MIT Golub Center for Finance and Policy, SFS Finance Cavalcade Asia-Pacific


Borrowing from Friends of Friends: Indirect Social Networks and Bank Loans (with Sterling Huang, Massimo Massa and Hong Zhang), 2021, Management Science R&R.

Presented at: CICF, Five-Star Workshop in Finance


Technology Transfer and Early Industrial Development: Evidence from the Sino-Soviet Alliance (with Michela Giorcelli), 2021, NBER Working paper 29455.

Presented at: NBER Summer Institute on Productivity, Development and Entrepreneurship, AFA(scheduled), Harvard, UCLA, Yale University, University of British Columbia, University of Michigan, George Washington University, Auburn University, University of Oxford, LUISS, Universitá di Bologna, Universitá di Padova, University of Melbourne, Tsinghua University, the Cliometrics Conference, the NBER Productivity Lunch, the Second Women in International Economics (WIE) Conference, the CEPR/LEAP Workshop in Development Economics, the Barcelona GSE Summer Forum on the Economics of Science and Innovation, the Pacific Conference for Development Economics, the Webinar Series in Finance and Development (WEFIDEV), the LSE  Asia Economic History Seminar, the Online Economic History Workshop, and the Ridge Conference


The Political Economy of Anti-Bribery Enforcement (with Lauren Cohen), 2021, NBER Working paper 29624.

Presented at: AFA, POLFIN, CICF, EFA, ABFER Singapore, CIFER 


The Externality of Debt Rollover: Evidence from Syndicated Lending, 2018. 

Presented at: Federal Reserve Bank of Richmond, CKGSB, Queen's University, NFA, MFA, Peking University, Tsinghua University


CASE  STUDIES

Baofeng's Philanthropic Efforts in China, with Lauren Cohen, Hao Gao, Zhaoheng Gong. April 2022. In submission to Harvard Business School Case Series.  

Commercial Bank Loan Restructuring A and B, with Hong Zhang. December 2017. Tsinghua PBC Case Series. PBC School of Finance Tsinghua University.  

Minfa Securities Bankruptcy Liquidation, with Hong Zhang. December 2017. Tsinghua PBC Case Series. PBC School of Finance Tsinghua University.  

Alibaba Cloud: Finance and AI, with Xuexin Gao, and Hong Zhang. September 2016. Tsinghua PBC Case Series. PBC School of Finance Tsinghua University.  

Shenzhou RideShare, with Xuexin Gao, and Hong Zhang. April 2016. Tsinghua PBC Case Series. PBC School of Finance Tsinghua University.  

Guizhou Maotai, with Li Liao, and Jiawei Ye. January 2014. Tsinghua PBC Case Series. PBC School of Finance Tsinghua University.