Tao Chen (NTU)

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Tao Chen

Finance

A seminar by Tao Chen from Nanyang Technological University

Title: Finance and Firm Volatility

Abstract: The online trading platform Alibaba provides financial technology (FinTech) credit for millions of micro, small, and medium enterprises (MSMEs). Using a novel dataset of weekly sales and an internal credit score threshold that governs the allocation of credit, we apply a fuzzy Regression Discontinuity Design (RDD) to explore the causal effect of credit access on firm volatility. We find that credit access significantly reduces firm sales volatility and that the effect is strongly countercyclical. We also find that the negative effect on firm volatility is concentrated in firms that are young, that are in regions with lower economic growth and poorer legal environment and contract enforcement, and that are in more competitive industries. We further look at firm exit probability and find that firms with access to FinTech credit are less likely to go bankrupt or exit the business in the future. Overall, our findings contribute to a better understanding of the role of FinTech credit in MSMEs.

Start date:

11am Friday, 21 Jun 2019

End date:

12.30pm Friday, 21 Jun 2019

Venue:

CBE LT1

Presenter(s):

Tao Chen

Updated:   13 June 2019 / Responsible Officer:  CBE Communications and Outreach / Page Contact:  College Web Team