Title: Endogenous Information and Credit Cycles

Speaker: Li Zhaorui, Postdoctoral Fellow of the Business School, Hong Kong University of Science and Technology; obtained a doctoral degree from Peking University HSBC Business School in 2024. His main research fields are macro-finance and the digital economy, and his research results have been published in Management World.

Abstract: This paper proposes a tractable general equilibrium model of production, financing and information acquisition for financially constrained firms. In the model, favorable credit access incentivizes firms to acquire more information, while more information increases their expected profitability and further relaxes the borrowing constraints. Such interaction between information friction and financial friction generates a two-way feedback loop between information acquisition and credit conditions. Consistent with the model prediction, we provide empirical evidence for the two-way impacts between firm information choice and borrowing capacity. This relationship is more pronounced among financially constrained firms, emphasizing the role of credit friction in shaping endogenous uncertainty cycles.

Date & time: 31 March 2025, 09:30 - 11:30

Venue: B321, Zhixin Building, Central Campus, Shandong University