Zhan Li (李瞻)
4th year PhD Student
Department of Economics
Office: CPCOM 425A
Applied Microeconomics, Corporate Governance
A unique “T + 1 trading rule” in China: Theory and evidence, with Ming Guo, Zhiyong Tu, Journal of Banking and Finance 36, 575-583, 2012.
Abstract: Unique to the world, China adopts a “T + 1 trading rule”, which prevents investors from selling stocks bought on the same day. We develop a dynamic price manipulation model to study the effects of the “T + 1 trading rule”. Compared to the “T + 0 trading rule”, which allows investors to buy and sell the same stocks during the same day, we show that the “T + 1 trading rule” reduces the total trading volume and price volatility, and improves the trend chasers’ welfare when trend-chasing is strong. An empirical test using data on China’s B-share stock market supports the model’s theoretical predictions.
Director’s Reputation Incentive, Corporate Governance and CEO Labor Market , Working Paper, 2012. Accepted at 2013 Middle West Finance Association Annual Meeting.
Abstract: This paper examines how board’s reputation incentive and corporate governance affect managerial compensation and firm profit in a two-sided matching market. We find that the allocation is distorted from positive assortative matching. In equilibrium, a firm earns lower profit, matches with a more talented manager if the the director is more concerned with her reputation, firm has weaker governance, the director’s ability is less known or the product market is more volatile. When compared with positive assortative matching, each manager is overpaid and each firm earns less profit even there is only one weakly governed firm. This is caused by the externality of weak corporate gov- ernance which induces every firm to overpay their managers when competing for scare managerial talent.
For self-use purpose