Victoria Liu Contact Information 001 Fisher Hall Department of Economics Princeton University Princeton, NJ 08544 Placement Director: Stephen Redding Graduate Administrator: Laura Hedden [email protected] scholar.princeton.edu/vliu Phone (732) 829-9730 Citizenship: U.S.A. [email protected] [email protected] (609) 258 4016 (609) 258 4006 Education Princeton University, Ph.D., Economics Princeton University, M.A., Economics University of California – Berkeley, B.A., Economics (summa cum laude) University of California – Berkeley, B.A., Mathematics (magna cum laude) 2015(exp.) 2011 2009 2009 Research and Teaching Fields Empirical Finance, Corporate Finance, Asset Pricing, Banking Job Market Paper “Impact of Bank Lending on Trade Credit” In addition to bank credit, firms could also obtain financing from their suppliers in the form of trade credit. Research on the interaction between these two components of firm’s capital structure has been previously limited to binary measures of banking relationships. During adverse macro shock to the banking sector in the recent financial crisis, firms experienced variant exposures to bank credit contraction as a result of differences in their banking portfolios. I hereby construct a dispersed measure of banking relationships that is orthogonal to firm characteristics, and investigate the impact of banking lending on interfirm borrowing with it. I find direct evidence that firms are able to substitute bank lending with trade credit when bank liquidity dries up. Firms facing less healthy banking portfolio, hence larger bank credit contraction, experienced higher growth rate in supplier credit. This rate of substitution is higher for firms with fewer outside financing options. I also provide evidence that firms with higher rate of substitution recover faster from the adverse shock in financial market. This is consistent with previous theory and empirical finding that suppliers can act as liquidity providers to their customers in hostile bank credit environments. Works in Progress “Trade Credit and Firm Level Risk Sharing” The size of accounts payable for US manufacturing firms has increased steadily over the past two decades. At the same time, firm level risk has also increased due to competition on the product market. I develop a framework with information friction to reconcile these two facts, where supplier firms act as “shadow” banks with advantage in learning about quality of projects at customer firms. As signals from product market become less precise, the information wedge between traditional banks and suppliers widens. This leads to customers obtaining more credit from their suppliers for liquidity reasons and risk sharing purposes. I also find supporting empirical evidence for the model predictions. Firms with higher firm level risk hold larger accounts payable, and industries with higher risk dispersion have higher levels of accounts payable on average. Using customer-supplier pairing data, I find heavier usage of trade credit by customers that have suppliers with lower firm level risk. “Trade Credit Network and Return Predictability” Research Experience July 2011 – Aug 2011 June 2010 – July 2010 Research Assistant for Professor Hyun Shin Research Assistant for Professor David Sraer Teaching Experience Fall 2011 - 2014 Fall 2014 Spring 2013 Fall 2012 Spring 2011 ECO 464/FIN 519 Corporate Restructuring with Professor Ormond Sexton Stata Workshop for Junior Independent Work ECO 100 Introduction to Microeconomics with Professor Uwe Reinhardt ECO 324 Law and Economics with Professor Thomas Leonard ECO 301 Macroeconomics with Professor Nobuhiro Kiyotaki Honors and Fellowships 2009 – 2015 2009 2009 Princeton University Fellowship and Summer Fellowship Phi Beta Kappa National Honor Society Percy Lionel David Award for Outstanding Scholarship in Mathematics, University of California – Berkeley Skills Computer: Stata, Matlab, Latex, working knowledge of C++, R Languages: English (native), Mandarin Chinese (native), German (advanced) References Hyun S. Shin (chair) Economic Adviser and Head of Research Bank for International Settlements [email protected] Valentin Haddad Bendheim Center for Finance Princeton University (609) 258-4020, [email protected] Personal Date of birth: May 19, 1988 David Sraer Department of Economics and Haas School of Business University of California – Berkeley (510) 642-8363, [email protected]