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Mai Li
Mai Li
Job Market Candidate
Fields: Finance, International Macroeconomics, Macroeconomics
Sponsor(s): Martin Uribe and Jesse Schreger


CV


Welcome! I am a Ph.D. candidate in economics at Columbia University. My research focuses on the areas of macroeconomics, international finance, and corporate finance.

I am on the job market this fall and will be available for interviews at the 2019 CICE China Job Market in Beijing, the 2019 EEA Job Market in Rotterdam and 2020 ASSA Meetings in San Diego.


Job Market Paper
Abstract:

This paper studies a novel transmission channel for exchange rate policy in emerging markets that acts through financial institutions. According to this "credit-supply channel," banks in emerging markets fund themselves in U.S. dollars, lend in the local currency, and bear foreign exchange risk if hedging is imperfect. This currency mismatch exposes banks to exchange rate fluctuations and makes economies vulnerable to adverse global financial conditions. To ascertain the significance of this transmission mechanism, I focus on the large and unanticipated currency depreciation episode following the U.S. Fed's decision to taper the size of its security purchase and exploit the heterogeneity in banks' pre-determined exposure to currency risk. Using loan-level data in Taiwan during 2012-15, I provide evidence that the effect of depreciation on credit supply is contractionary. Banks with higher net USD liability cut more lending and were less likely to extend credit to firms with which they had pre-existing relationships. In turn, firms with more dependence on the highly mismatched banks hardly switched to alternative funding sources and disproportionately decreased investment and employment as compared to other firms that relied less on these banks. I find that the credit-supply effects of depreciation on investment and employment are both economically and statistically significant. The extent to which the credit-supply channel contributes to the overall effect of the exchange rate policy is shown to be sizeable when the competing channels-namely, the exporter trade channel and the corporate credit constraint channel-are taken into account.


Research

Working Paper:

Corporate Debt Substitution and Spillover of ECB Corporate Bond Purchase Program

Using the corporate bond purchase program undertaken by European countries in the aftermath of the sovereign debt crisis as a laboratory, this paper highlights the role that corporate bond market can play in mitigating adverse financial shock emanating from the banking sector. The direct purchase by the central bank results in more bond issuance and less bond spread by eligible non-financial borrowers relative to the valid counterparts with equal access to the bond market. Moreover, the decreasing reliance on bank financing by borrowers with access to the bond market generates a pass-through effect on the real economy. Banks that have pre-existing relationship with borrowers eligible for the bond purchase program are found to reallocate credit supply towards firms fully depending on bank financing. The financial spillover translates into a higher propensity to invest and to hire by the bank-based borrowers, which are more likely to be capital-constraint.


Teaching

Financial Economics, TA for Professor Martina Jasova, Spring 2019

Financial Economics, TA for Professor Tamrat Gashaw, Fall 2018

Financial Economics, TA for Professor Irasema Alonso, Spring 2018

Intermediate Macroeconomics, TA for Professor Xavier Sala-I-Martin, Fall 2017

Money and Banking, TA for Professor Tri Vi Dang, Spring 2017

Money and Banking, TA for Professor Perry G Mehrling, Fall 2016

Intermediate Macroeconomics, TA for Professor Irasema Alonso, Spring 2016

Introduction to Econometrics, TA for Professor Seyhan Erden, Fall 2015

 

1022 International Affairs Building (IAB)
Mail Code 3308  
420 West 118th Street
New York, NY 10027
Ph: (212) 854-3680
Fax: (212) 854-0749
Business Hours:
Mon–Fri, 9:00 a.m.–5:00 p.m.

1022 International Affairs Building (IAB)

Mail Code 3308

420 West 118th Street

New York, NY 10027

Ph: (212) 854-3680
Fax: (212) 854-0749
Business Hours:
Mon–Fri, 9:00 a.m.–5:00 p.m.