Research
HIGHLIGHT RESEACH PROJECT IN FINTECH FIRM
| Project Name | Project Description | Contributor |
| Do Non-Banks Bring Lower Prices for Borrowers in the Government-Sponsored Enterprise (GSE) Mortgage Market? | The neoclassical economic theories predict that increased competition can lead to lower prices; however, this prediction has yet to find empirical support in the consumer lending market. We find that, given the same ex post level of credit and prepayment risks, large banks charge the highest interest rates on GSE mortgages, fintech firms charge the lowest interest rates, and the interest rates charged by small banks and non-fintech non-banks fall in the middle with marginal differences between them. With the entrance of non-banks, the GSE mortgage interest rates decrease by roughly 7 basis points from 2010 to 2019. |
Xinlei Zhao, Zilong Liu, Hongyan Liang |
| Technological Innovation and Risk Assessment: A Study on Fintech Firms in the Conforming Mortgage Market | In this study, we assess the ability of fintech firms to predict borrower delinquency risks in the conforming mortgage market, comparing their performance with that of traditional banks and non-fintech shadow banks. We discover that fintech-originated loans demonstrate a lower accuracy in foretelling delinquencies, evidenced by their reduced Area Under the Curve (AUC) scores. Unlike the trends observed in the unsecured personal loan sector, we observe that some fintech lenders in the conforming mortgage realm do not employ superior risk assessment models. This could be attributed to their strategy of selling the originated loans to agencies, indicating a deliberate choice not to focus on enhancing risk evaluation models for gaining market share. |
Zilong Liu Hongyan Liang |
HIGHLIGHT RESEACH PROJECT IN FAIR LENDING and ALGORITHM BIAS
HIGHLIGHT RESEACH PROJECT IN CREDIT RISK MODELLING
Publication (Peer reviewed academic journals)
- Liu, Z., Liang, H. and Liu, C. (2024), "The effects of debt liquidity risk on firms' growth rate", International Journal of Managerial Finance, Vol. 20 No. 1, pp. 71-93.
- Shaojie Lai, Hongyan Liang, Zilong Liu, Xiaoling Pu, & Jianing Zhang (2022). Ownership concentration among entrepreneurial firms: The growth-control trade-off. International Review of Economics & Finance, 78, 122-140.
- Fanglin Shen, Quantong Guo, Hongyan Liang, and Zilong Liu (2022), Responses in Divergence of Opinion to Earnings Announcements: Evidence from American Depository Receipts, International Journal of Managerial Finance, forthcoming
- Zilong Liu and Hongyan Liang (2021), The impact of bank liquidity risk on risk-taking and bank lending: evidence from European bank, J. Fin. Bank. Review, 6(2), 82 – 97.
- Hongyan Liang, Alfred L. Guiffrida, Zilong Liu, Butje Eddy Patuwo, & Murali Shanker (2021). A Generalized Stochastic Cost–Volume–Profit Model. Systems, 9(4), 81.
- Lindsay Baran, Ying Li, Zilong Liu, Chang Liu and Xiaoling Pu, The Impact of S&P Index Revisions on Credit Default Swap Market, The Review of Financial Economics 2018;00:1-16.
- Michael Hu, Hongyan Liang, Zilong Liu, Xiandeng Jiang and Chanho Song (2017), Online Sales in Startups. Pan Pacific Journal of Business Research Vol. 8 No. 2
- Zilong Liu, Xiaoling Pu, and Xinlei Zhao (2015), What Moves the Correlation between Equity and CDS Markets?, The Journal of Fixed Income Vol. 25 No. 2: 72-8.
Conferences Proceeding
- Technological Innovation and Risk Assessment: A Study on Fintech Firms in the Conforming Mortgage Market, CSWIM 2024, Xiamen, China, June 29-30
- The effects of debt liquidity risk on firms’ growth rate. Proceedings of the Academy of Finance 2022 Conference, Chicago, IL, March 23-25, 2022