On April 23, 2014. LUO Jian (WISE PhD student) and YE Xiaoxia (WISE alumni) won a best paper prize in asset pricing for their paper titled "A Puzzle of Counter-Credit-Risk Corporate Yield Spreads in China’s Corporate Bond Market" at the 5th Financial Markets and Corporate Governance Conference, QUT Brisbane, Australia. In their paper, based on a unique dataset of China's corporate yields and aggregate credit risk measures, Jian and Xiaoxia documented a puzzle of counter-credit-risk pattern in China's corporate bond yield spreads. They interpreted the puzzle as a symptom of the immaturity of China's corporate bond market in two aspects: the illiquid secondary market and the market expectation of zero credit risk. Undesirable consequences include: inefficient capital allocation, moral hazard, and credit risk accumulation. Based on their empirical findings, Jian and Xiaoxia, in their paper, urged the policy makers to focus more on the improving the two aspects.
LUO Jian: WISE 2007 PhD student.
YE Xiaoxia: Post Doc researcher at Stockholm Business School, Stockholm University. WISE alumni (2010 PhD).
