The Unconventional Effects of Large-scale Asset Purchases: A Firm-level Analysis

1. Topic: The Unconventional Effects of Large-scale Asset Purchases: A Firm-level Analysis

2. Speaker: Huili Chang, Finance PhD in HKU (graduating in 2015), Bachelor in Peking University majoring in Publishing, Master of Economics received in 2010 in Peking University. Main research fields include Financial Market, Corporate Finance, etc. The research achievements have been shared in numerous high-quality academy conferences both at home and abroad, including Financial Management Association Annual Meeting in America, European Financial Management Association Conference in Europe, Asian Finance Association Conference, Five Star Forum in Finance, etc.

3. Time: March 11, 2015 (Wednesday), 12:30 – 14:00

4. Location: 913 Meeting Room, Main Building

5. Host: Zhigang Huang, vice professor in School of Finance

Abstract: his paper examines the impact of large-scale asset purchases (LSAPs) on corporate financing and investment. I find that LSAPs increased corporate financing relative to the pre-LSAP crisis period and shifted the corporate financing pattern towards greater equity financing. Specifically, LSAPs enabled noninvestment-grade firms to issue more public equity, and allowed investment-grade firms to issue more bonds. After raising capital, public equity issuers used the proceeds to avoid bankruptcy, whereas debt issuers used the funds to expand their businesses. Therefore, unlike traditional monetary policy tools that affect bank lending, LSAPs stimulate the real economy by spurring the stock and bond markets and thereby providing firms with alternative sources of financing.