About Me
Short Bio
I'm Yidan Mao, a Ph.D. candidate focusing on empirical corporate finance, municipal bonds, and banking intermediation, leveraging econometric modeling and causal inference methods.
I am highly technically curious. This platform showcases my independent Gen-AI project: an automated RAG engine that indexes Multilateral Development Bank (MDB) policy claims and cross-checks them against peer-reviewed economic literature.
Research Interests
Topics
- · Municipal corporate bonds
- · Bank credit & financial intermediaries
- · Supply-chain finance
- · ESG & sustainability disclosure
- · AI governance
Methods
- · Econometrics
- · Machine learning
- · Textual analysis (LLMs, NLP)
- · Network analysis
Tools
- · Python
- · R
- · Stata
- · LaTeX
Selected Publications
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Targeted fiscal policy and corporate investment: Evidence from the special bonds in China
Abstract: The crowding-out effect of local government debt on private sectors has been widely discussed in recent years. Yet, with a special government bond targeted at regional banks (the Special Bonds) to directly enhance credit availability, the governments are switching roles from a ‘competitor’ to a ‘supporter’ of local firms, especially small and medium-sized enterprises (SMEs). We employ a staggered difference-in-difference (DID) model and empirically find that the Special Bonds boost the investment of local SMEs yet meanwhile lead to their investment inefficiency. This negative impact can be attributed to the weak regulatory capacity of regional banks and the opaque information disclosure of SMEs. The effect of efficiency erosion is more significant for firms with severe financing constraints or firms located in regions with an inferior business environment or immature financial infrastructure. Furthermore, SMEs that benefit from Special Bonds yet utilize the capital inefficiently are subject to higher risks regarding return and cash-flow volatility.
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Geographic deviation and analyst forecast accuracy: evidence from China
Abstract: This study finds that a firm’s geographic deviation from its peers within the same coverage portfolio adversely impacts the forecast accuracy of the analyst team responsible for the portfolio. This negative effect arises because high geographic deviation discourages analyst teams from conducting site visits to target firms. We observe that this impact is more pronounced for firms with poor financial reporting quality, limited use of high-tech applications, or locations in cities that have undeveloped information networks or transportation infrastructure. Finally, geographic deviation also plays an important role in shaping analyst teams’ future coverage decisions.
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The information externality of public firms’ employment in the municipal corporate bond market in China
Abstract: This study focuses on the informativeness of the labour force in the municipal corporate bond (MCB) market in China. We aggregate the annual employment of public firms to the prefecturecity level and find that aggregate employment is positively associated with the scale of the MCB, while it is negatively associated with the issuing rate of the MCB. Further, we find that such information externality is conditional on the attributes of the employment characteristics, including the education, functional departments, and ownership nature. Mechanism analyses indicate that information accessibility, processing, dissemination, and efficacy are important channels through which aggregate employment exerts informativeness. The information externality is reinforced after an administration enhances the authenticity of employment information. This paper echoes previous studies of the macro value of aggregate firm-level information and enriches the literature in labour and finance by revealing that the labour dividend still exists and triggers the MCB issuance in China.
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The negative effect of regional banking competition on audit quality: Evidence from China
Abstract: Using Chinese A-share listed data from 2007 to 2020, we reveal that increased competition in the banking system impairs the audit quality of banks’ credit clients, which is attributed to the loss of bank supervision. For firms with poor corporate governance or information quality, firms that hire auditors with low independence or high catering motivation, or firms in an immature external environment, such negative effect is more prominent. Furthermore, we indicate that firms are prone to shop for favorable audit opinions under high banking competition. Overall, we illustrate the negative effect of banking competition on auditors and provide meaningful implications.
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Special representative actions, the insurance value of audits, and investor protection: an empirical study based on the ruling against Kangmei Pharmaceutical Co. Ltd
Abstract: The ruling against the Kangmei Pharmaceutical Co., Ltd’s financial fraud was the first special representative action under China’s new Securities Law, serving as a milestone in investor protection in China. Exploiting the natural experiment provided by the ruling, we empirically test the insurance value of audits and find a negative market reaction of the client firms audited by the accounting firms that were still being sued as of the date of Kangmei ruling (i.e., the sued accounting firms). Further, this reaction is weakened when the solvency of the sued accounting firms or the client firms is high, and is intensified when the client firms have high litigation risk. The ruling also eroded investors’ trust in the financial statements for the year 2020 that were audited by the sued accounting firms. Overall, we provide important evidence on the effect of special representative actions from the perspective of audit insurance hypothesis.
Under Review
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In the Name of Sustainability: An Unintended Information Externality of ESG to the Municipal Corporate Bond Market
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Multilevel Competition and External Analyst Recruitment
Education
September 2022 – June 2027 (expected)
Ph.D. Candidate in Accounting
Zhejiang University, School of Management
September 2018 – June 2022
B.S. in Applied Statistics (Dual degree in Accounting)
Central University of Finance and Economics
Let's Connect
If you're interested in MDBs, AI, or just want to swap notes on cutting-edge empirical methods, I'd love to hear from you. :)