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Professor Xiang Li, PhD

Professor Xiang Li, PhD
Current Position

since 1/19

Head of the Research Group Financial Integration, Economic Growth and Financial Stability

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

since 10/18

Assistant Professor of Economics

Martin Luther University Halle-Wittenberg

since 10/18

Member of the Department Macroeconomics

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

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Research Interests
  • international finance
  • Chinese economy
  • open economy macroeconomics

Xiang Li is Assistant Professor of Economics at Martin Luther University Halle-Wittenberg and a member of the Department of Macroeconomics at IWH since October 2018. Her research focuses on international finance.

Xiang Li received her two bachelor's degrees and her PhD from Peking University.

Your contact

Professor Xiang Li, PhD
Professor Xiang Li, PhD
Mitglied - Department Macroeconomics
Send Message +49 345 7753-805 Personal page

Publications

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Surges and Instability: The Maturity Shortening Channel

Xiang Li Dan Su

in: Journal of International Economics, forthcoming

Abstract

Capital inflow surges destabilize the economy through a maturity shortening mechanism. The underlying reason is that firms have incentives to redeem their debt on demand to accommodate the potential liquidity needs of global investors, which makes international borrowing endogenously fragile. Based on a theoretical model and empirical evidence at both the firm and macro levels, our main findings are twofold. First, a significant association exists between surges and shortened corporate debt maturity, especially for firms with foreign bank relationships and higher redeployability. Second, the probability of a crisis following surges with a flattened yield curve is significantly higher than that following surges without one. Our study suggests that debt maturity is the key to understand the financial instability consequences of capital inflow bonanzas.

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Total Factor Productivity Growth at the Firm-level: The Effects of Capital Account Liberalization

Xiang Li Dan Su

in: Journal of International Economics, forthcoming

Abstract

This study provides firm-level evidence on the effect of capital account liberalization on total factor productivity (TFP) growth. We find that a one standard deviation increase in the capital account openness indicator constructed by Fernández et al. (2016) is significantly associated with a 0.18 standard deviation increase in firms’ TFP growth rates. The productivity-enhancing effects are stronger for sectors with higher external finance dependence and capital-skill complementarity, and are persistent five years after liberalization. Moreover, we show that potential transmission mechanisms include improved financing conditions, greater skilled labor utilization, and technology upgrades. Finally, we document heterogeneous effects across firm size and tradability, and threshold effects with respect to the country's institutional quality.

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Household Indebtedness, Financial Frictions and the Transmission of Monetary Policy to Consumption: Evidence from China

Michael Funke Xiang Li Doudou Zhong

in: Emerging Markets Review, June 2023

Abstract

This paper studies the impact of household indebtedness on the transmission of monetary policy to consumption using the Chinese household-level survey data. We employ a panel smooth transition regression model to investigate the non-linear role of indebtedness. We find that housing-related indebtedness weakens the monetary policy transmission, and this effect is non-linear as there is a much larger counteraction of consumption in response to monetary policy shocks when household indebtedness increases from a low level rather than from a high level. Moreover, the weakened monetary policy transmission from indebtedness is stronger in urban households than in rural households. This can be explained by the investment good characteristic of real estate in China.

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Working Papers

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BigTech Credit and Monetary Policy Transmission: Micro-level Evidence from China

Yiping Huang Xiang Li Han Qiu Changhua Yu

in: IWH Discussion Papers, No. 18, 2022

Abstract

This paper studies monetary policy transmission through BigTech and traditional banks. By comparing business loans made by a BigTech bank with those made by traditional banks, it finds that BigTech credit amplifies monetary policy transmission mainly through the extensive margin. Specifically, the BigTech bank is more likely to grant credit to new borrowers compared with conventional banks in response to expansionary monetary policy. The BigTech bank‘s advantages in information, monitoring, and risk management are the potential mechanisms. In addition, monetary policy has a stronger impact on the real economy through BigTech lending.

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The Role of State-owned Banks in Crises: Evidence from German Banks During COVID-19

Xiang Li

in: IWH Discussion Papers, No. 6, 2022

Abstract

By adopting a difference-in-differences specification combined with propensity score matching, I provide evidence using the microdata of German banks that stateowned savings banks have lent less than credit cooperatives during the COVID-19 crisis. In particular, the weaker lending effects of state-owned banks are pronounced for long-term and nonrevolving loans but insignificant for short-term and revolving loans. Moreover, the negative impact of government ownership is larger for borrowers who are more exposed to the COVID-19 shock and in regions where the ruling parties are longer in office and more positioned on the right side of the political spectrum.

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How Does Economic Policy Uncertainty Affect Corporate Debt Maturity?

Xiang Li

in: IWH Discussion Papers, No. 5, 2022

Abstract

This paper investigates whether and how economic policy uncertainty affects corporate debt maturity. Using a large firm-level dataset for four European countries, we find that an increase in economic policy uncertainty is significantly associated with a shortened debt maturity. Moreover, the impacts are stronger for innovation-intensive firms. We use firms’ flexibility in changing debt maturity and the deviation to leverage target to gauge the causal relationship, and identify the reduced investment and steepened term structure as the transmission mechanisms.

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Topics

International Finance Financial Stability Productivity Financial Crisis Monetary Policy
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