Topic: Carrot and stick: Two natural field experiments on lender information sharing
Speaker: Jun Yang, Indiana University
Time: Wednesday, 17 July, 10:00-11:30
Location: Room 217, Guanghua Building 2
We examine the effect of lender credit information sharing on first-time borrowers’ loan take-up and default decisions using a pair of natural field experiments. Upon receiving credit warnings after taking out a loan, borrowers’ default likelihood decreases by 6%, suggesting an improvement in repayment effort. Upon receiving the same information after loan approval but before take-up, borrowers are 3% more likely to take out the loan, suggesting that credit reporting allows them to establish a credit history. Default likelihood is comparable between the two experiments, implying that credit reporting has little effect on borrowers’ adverse selection.
Jun Yang is an associate professor of Finance at Kelley School of Business, Indiana University. Her research focuses on corporate finance, corporate governance, executive compensation, and FinTech. Jun’s work on opportunistic managerial behavior in compensation peer benchmarking practice was published by the Journal of Financial Economics (JFE) and Review of Financial Studies. Jun’s current research investigates opportunistic managerial behavior related to executive pensions and various factors that may affect the nature of director independence (e.g., collusive trading between independent directors and the CEO, and corporate charitable donations to independent-director-affiliated charities). Her most recent publication at the JFE shows that in some circumstances managers are able to extract rents through their pension plans. Top executives receive one-time increases in pensionable earnings through higher annual bonuses one year before a plan freeze and one year before retirement. Firm also boost pension payouts by lowering plan discount rates when top executives are eligible to retire with lump-sum benefit distributions. Jun’s work won numerous research awards and was featured by The Wall Street Journal, New York Times, The Washington Post, Bloomberg, Harvard Law School Forum, and Slate. Jun received her Ph.D. in Finance from Washington University in Saint Louis, and her Master’s and Bachelor’s degrees from Tsinghua University (summa cum laude).
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