Yuhao Qian
2025-26 Job Market Candidate
Department of Economics, LSE
Fields: Macroeconomics; Corporate Finance;
International Finance
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.
DraftSelected Working Papers
International Transmission of US Monetary Policy and Liquidity Constraints: Evidence from the Euro Area
Abstract: This paper studies why euro-area countries differ in their consumption responses to U.S. monetary policy shocks. Using country-level local projections, I first show that identified U.S. monetary policy shocks generate significantly heterogeneous consumption responses across euro-area countries. I then link this heterogeneity to household balance-sheet composition using microdata from the ECB’s Household Finance and Consumption Survey. The correlation between countries' fraction of wealthy hand-to-mouth households (WH2M) and consumption responses to expansionary U.S. monetary policy shocks reaches approximately 0.75 and is statistically significant. This finding is consistent with a central prediction of open-economy heterogeneous-agent New Keynesian (HANK) models. Finally, using BIS data on banks’ cross-border positions, I show that this relationship also depends on external currency exposure: among high-WH2M countries, responses vary with the currency composition of net cross-border positions. The findings imply that domestic household heterogeneity and external financial structure jointly shape the international transmission of U.S. monetary policy.
DraftTeaching
Students' Comments
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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