Yuhao Qian
2025-26 Job Market Candidate
Fields: Macroeconomic; Finance
Department of Economics, LSE
Email: [email protected]
Placement Director: Matthias Doepke
Committee: Benjamin Moll , Dmitry Mukhin , and Wouter Den Haan
Job Market Paper
Capital Misallocation and Earnings-based Borrowing
Abstract: Existing literature in capital misallocation and credit markets typically explains capital misallocation by the asset-based borrowing constraint: firms can only borrow up to a fraction of the value of their assets. In practice, the majority of U.S. corporate debt is constrained by earnings, not assets. This paper studies how earnings-based borrowing shapes capital allocation and efficiency. Using the Enron–Arthur Andersen accounting scandal as the first natural experiment on earnings-based financial frictions, I find causal evidence that a 10-percentage-point decline in a firm’s share of newly issued earnings-based borrowing increases the firm's marginal revenue product of capital (MRPK) growth by 6.6 percentage points more for the high-MRPK than the low-MRPK firms. A simple model formalizes the mechanism: earnings-based borrowing channels funds toward more productive firms and compresses the dispersion of MRPK, as productive firms tend to have higher earnings. In a calibrated quantitative general equilibrium heterogeneous-firm model, the Enron shock reduces aggregate TFP by $0.45\%$ through the tightening of the earnings-based borrowing constraint. In contrast, a comparable tightening of the asset-based borrowing constraint would lower TFP by only $0.1\%$. Taken together, the evidence highlights earnings-based borrowing as a key credit margin that supports allocative efficiency and limits misallocation.
DraftWorking Papers
International Transmission of US Monetary Policy and Liquidity Constraints: Evidence from the Euro Area
This study complements the small-open-economy heterogeneous-agent New Keynesian (HANK) models by providing empirical evidence on the international transmission of US monetary policy, using the euro-area microdata from the Household Finance and Consumption Survey (HFCS) by the ECB. I find that the fraction of wealthy hand-to-mouth households is strongly positively correlated with the country's consumption response to an expansionary US monetary shock. The correlation is 0.75 and statistically significant.
DraftPre-PhD Work: Financial Agglomeration and Carbon Emissions: Theoretical Analysis and Empirical Evidence from China , with Xuesong Gu
Best Thesis in BJFUTeaching
EC2B3 Macroeconomics II, 2024-2025 Teaching Bonus Award
LSE, 2022-2023 & 2024-2026, Course Manager & Class Teacher
EC2B1: Macroeconomics II
LSE, 2023-2025, Class Teacher
EC210: Macroeconomic Principles, 2021-2022 Teaching Bonus Award
LSE, 2021-2023, Class Teacher
Replication Codes
Job Market Paper: Capital Misallocation and Earnings-based Borrowing
Code coming soon