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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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Financial Technologies and the Effectiveness of Monetary Policy Transmission

Iftekhar Hasan Boreum Kwak Xiang Li

in: European Economic Review, January 2024

Abstract

This study investigates whether and how financial technologies (FinTech) influence the effectiveness of monetary policy transmission. We use an interacted panel vector autoregression model to explore how the effects of monetary policy shocks change with regional-level FinTech adoption. Results indicate that FinTech adoption generally mitigates the transmission of monetary policy to real GDP, consumer prices, bank loans, and housing prices, with the most significant impact observed in the weakened transmission to bank loan growth. The relaxed financial constraints, regulatory arbitrage, and intensified competition are the possible mechanisms underlying the mitigated transmission.

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Working Papers

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Global Political Ties and the Global Financial Cycle

Gene Ambrocio Iftekhar Hasan Xiang Li

in: IWH Discussion Papers, No. 23, 2023

Abstract

We study the implications of forging stronger political ties with the US on the sensitivities of stock returns around the world to a global common factor – the global financial cycle. Using voting patterns at the United Nations as a measure of political ties with the US along with various measures of the global financial cycle, we document evidence indicating that stronger political ties with the US amplify the sensitivities of stock returns in developing countries to the global financial cycle. We explore several channels and find that a deepening of financial linkages along with a reduction in information asymmetries and an amplification of sentiment are potentially important factors behind this result.

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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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Topics

International Finance Financial Stability Productivity Financial Crisis Monetary Policy
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