Professor Shuo Xia, PhD

Professor Shuo Xia, PhD
Current Position

since 1/19

Head of the Research Group Governance and Finance

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 4/19

Assistant Professor of Economics, esp. Financial Economics

Leipzig University

since 9/18

Member of the Department Financial Markets

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

Research Interests

  • corporate governance
  • corporate finance

Shuo Xia is Assistant Professor of Economics at Leipzig University since April 2019 and a member of the Department of Financial Markets since September 2018. His research focuses on corporate finance and corporate governance.

Shuo Xia earned his bachelor's degree from Beijing University of Technology and a master's degree from University of Essex and VU Amsterdam. He received his PhD from Erasmus University Rotterdam.

Your contact

Professor Shuo Xia, PhD
Professor Shuo Xia, PhD
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Working Papers


Poison Bonds

Shuo Xia Rex Wang Renji

in: SSRN Discussion Paper, 2023


This paper documents the rise of "poison bonds", which are corporate bonds that allow bondholders to demand immediate repayment in a change-of-control event. The share of poison bonds among new issues has grown substantially in recent years, from below 20% in the 90s to over 60% after 2005. This increase is predominantly driven by investment-grade issues. We provide causal evidence that the pressure to eliminate poison pills has led firms to issue poison bonds as an alternative. Further analyses suggest that this practice entrenches incumbent managers, coincidentally benefits bondholders, but destroys shareholder value. Holding a portfolio of firms that remove poison pills but promptly issue poison bonds results in negative abnormal returns of -7.3% per year. Our findings have important implications for understanding the agency benefits and costs of debt: (1) more debt does not necessarily discipline the management; and (2) even without financial distress, managerial entrenchment can lead to conflicts between shareholders and creditors.

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Trading away Incentives

Stefano Colonnello Giuliano Curatola Shuo Xia

in: IWH Discussion Papers, No. 23, 2022


Equity pay has been the primary component of managerial compensation packages at US public firms since the early 1990s. Using a comprehensive sample of top executives from 1992-2020, we estimate to what extent they trade firm equity held in their portfolios to neutralize increments in ownership due to annual equity pay. Executives accommodate ownership increases linked to options awards. Conversely, increases in stock holdings linked to option exercises and restricted stock grants are largely neutralized through comparable sales of unrestricted shares. Variation in stock trading responses across executives hardly appears to respond to diversification motives. From a theoretical standpoint, these results challenge (i) the common, generally implicit assumption that managers cannot undo their incentive packages, (ii) the standard modeling practice of treating different equity pay items homogeneously, and (iii) the often taken for granted crucial role of diversification motives in managers’ portfolio choices.

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Corporate Governance Benefits of Mutual Fund Cooperation

Rex Wang Renji Patrick Verwijmeren Shuo Xia

in: IWH Discussion Papers, No. 21, 2022


Mutual fund families increasingly hold bonds and stocks from the same firm. We study the implications of such dual holdings for corporate governance and firm decision-making. We present evidence that dual ownership allows financially distressed firms to increase investments and to refinance by issuing bonds with lower yields and fewer restrictive covenants. As such, dual ownership reduces shareholder-creditor conflicts, especially when families encourage cooperation among their managers. Overall, our results suggest that mutual fund families internalize the shareholder-creditor agency conflicts of their portfolio companies, highlighting the positive governance externalities of intra-family cooperation.

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