Tri Vi Dang

 

 

Lecturer in Economics

Department of Economics

Columbia University

 

Email: td2332@columbia.edu

Office phone: 212 8514005

 

 

 

Research interest: financial contracting; financial intermediation; financial crises; financial regulation; financial liberalization in China

 

Teaching: Corporate Finance; Money and Banking; Private Equity and Hedge Fund Investing

 

 

 

Research

 

 

Google Scholar Citation [Site]

 

SSRN Papers [Site]

 

Research agenda on information sensitivity [Graph] and [Nobel Committee review, 4.1, p.43]

 

 

Published Papers

 

Bargaining with Endogenous Information, Journal of Economic Theory 140 (2008), 339-354.

If information is endogenous the responder of a take-it-or-leave-it offer can capture full surplus in a perfect Bayesian equilibrium.

 

Information Provision in Over-the-Counter Markets (with M. Felgenhauer), Journal of Financial Intermediation 21 (2012), 79-96.

An oligopolistic market structure for rating services arises endogenously and it is welfare improving for security issuers to pay for rating services rather than investors.

 

Banks as Secret Keepers (with G. Gorton, B. Holmström and G. Ordonez), American Economic Review 107 (2017), 1005-1029. [Online Appendix]

In order to create money-like securities banks must keep information about assets secret and hold loan portfolios with low information sensitivity while projects with high information sensitivity are financed in capital markets.

Media coverage: [Bloomberg], [Financial Times], [WSJ]

 

Market Sentiment and Innovation Activities (with Z. Xu), Journal of Financial and Quantitative Analysis 53 (2018), 1135-1161.

This paper formalizes a typical view of venture capitals and provides empirical evidences for the financing and sentiment spillover channels through which high market-wide sentiment (bubbles) stimulate R&D investments and patent productions.

 

The Information View of Financial Crises (with G. Gorton and B. Holmström), Annual Review of Financial Economics 12 (2020), 39-65.

This paper summarizes the recent empirical evidences for the information sensitivity theory of debt and financial crises.

 

Does Lending Relationship Help or Alleviate the Transmission of Liquidity Shocks? Evidence from a Liquidity Crunch in China (with Y. Bai, Q. He and L. Lu), Journal of Financial Stability 58 (2022), 100889.

By triggering an unintended liquidity crunch in the interbank lending markets in 2013, the People’s Bank of China (PBOC) induced banks to reduce lending and firms without long term lending relationships were most affected and reduced its investments.

 

The Role of Financial Constraints in Firm Investment Under Pollution Abatement Regulation  (with Y. Wang and Z. Wang), Journal of Corporate Finance 76 (2022), 102252. [WP with theory part]

This paper provides a theory and empirical evidences which show that financial constraint is a determinant of whether mandatory pollution abatement regulation in the context of the US Clean Air Act crowds out or stimulates corporate investment.

 

 

Working Papers

 

Information Acquisition, Noise Trading and Speculation in Double Auction Markets

With endogenous information as markets become sufficiently large an efficient equilibrium allocation fails to exist.

 

Ignorance, Debt and Financial Crises (with G. Gorton and B. Holmström)

Debt backed by debt collateral (debt-on-debt) is the optimal security in money and debt funding markets (e.g. demand deposits, MMF, repo, ABCPs), but a change in macroeconomic fundamentals can cause information insensitive debt to become information sensitive and thus a collapse of trade.

 

The Information Sensitivity of a Security (with G. Gorton and B. Holmström),

This paper derives a new characteristic of a security and discusses several applications.

 

Haircuts and Repo Chains (with G. Gorton and B. Holmström)

There are four joint determinants of repo haircuts, (i) the information sensitivity of collateral, (ii) the default probability of borrower, (iii) the intermediate liquidity needs of lender, and (iv) his default probability in a subsequent repo transaction.

 

The Empirical Information Sensitivity of Treasury Bonds and Stocks (with W. Li and Y. Wang)

This paper proposes an empirical measure of information sensitivity and shows that (i) long term Treasury bonds without credit risks are as information sensitive as the S&P500 index, (ii) government stock purchases during the Chinese stock market crash in 2015 reduce the information sensitivity of intervened stocks by 16% compared to other stocks and (iii) financial analysts produce less information production about less information sensitive stocks.

 

Taxation, Information Acquisition and Trade in Decentralized Markets: Theory and Test (with X. Liu and F. Morath)

This paper shows that a transaction (profit) tax increases (reduces) the information sensitivity of trades, leads to more (less) private information production and decreases (increases) trading volume and uses the introduction of a transaction tax in the Singaporean housing market to provide empirical evidences for the information sensitivity view on transaction taxes.

 

Shadow Banking Modes: The Chinese versus US System (with L. Liu, H. Wang and A. Yao), previous version entitled Chinese Shadow Banking: Bank-Centric Misperceptions, HKIMR Working Paper No. 22/2014.

This paper provides a comprehensive set of market statistics and theoretical analysis of Chinese shadow banking and shows that the system is bank-centric, driven by asymmetric perceptions of information sensitivity and relies on an intervening government as well as highlights the differences from the US system.

 

Information Disclosure, Intertemporal Risk Sharing and Stock Prices (with. H. Hakenes)

Optimal Risk sharing through partial disclosure of information can minimize the market value of the firm.

 

Managing China’s Stock Market: The Economics of the National Team (with W. Li and Y. Wang)

Government stock purchases during the Chinese stock market crash in 2015 reduce the volatility of intervened stocks but also the informativeness of prices.

 

The Option Value of a Bureaucrat as Successor CEO: Theory and Test (with Q. He)

This paper derives an option value theory of a bureaucrat as successor CEO and provides consistent empirical findings that Chinese firms which hire a new bureaucrat as CEO have (i) positive abnormal announcement stock returns, (ii) lower long run returns, (iii) larger cross-sectional variance and skewness of long run returns, (iv) obtain more loans and government subsidies, (v) but experience increased rent seeking.

 

 

Work in Progress

 

The Role of Corporate Narratives in Bank Lending (with Z. Bijoch, Y. Liu, L. Wu and X. Xu)

 

Bad Apples and Loan Pricing in Affected Industries: Evidence from a Corporate Fundraising Scandal (with Y. Li and J. Mo)

 

A Regulation Triggered Stock Market Panic and Who Runs First? (with H. Chen, H. Tu, and W. Xu)

 

When Insurance Reduces Risk-Taking: Theory and Evidence (with J. Lai, I. Yan and X. Yi)

 

 

Presentation Slides

 

Ignorance, Debt and Financial Crises [Slides]

 

Banks as Secret Keepers [Slides]

 

Chinese Shadow Banking: Bank-Centric Misperceptions [Slides]

 

 

 

Teaching

 

 

Corporate Finance, Undergraduate Lecture Course

 

Money and Banking, Undergraduate Lecture Course

 

Private Equity and Hedge Fund Investing, Senior Seminar Course