Updated 2013/08/30

Ruichang LU (卢瑞昌)

Assistant Professor, Department of Finance
Peking University Guanghua School of Management

#462, Guanghua School of Management Building No. 2, Peking University, China


National University of Singapore

  • Ph.D. in Finance


New York University, Stern School of Business

  • Visiting Scholar


Shanghai University of Finance and Economics

  • M.A (Economics); B.A, Double Major(Real Estate Management, Human Resource Management)


Research Interests

  • Corporate Finance; Financial Intermediary;

  • Banking; Corporate Governance


  • Best Paper Award, Seventh Annual Conference on Asia-Pacific Financial Markets (CAFM)

  • 25th Australasian Finance & Banking Conference, PhD forum with travel grant

  • President's Graduate Fellowship, National University of Singapore



  • Is There a Term Structure? Empirical Evidence from Shanghai Office Rental Market (with Fang Fang), International Real Estate Review, 2009, Volume 12, Issue 1

  • An MPEC estimator for misclassification models (with Yao Luo,Ruli Xiao), ECONOMICS LETTERS, 2014, Volume 125:195-199

Working Papers

  • How Does Institutional Ownership Affect Bank Loan Pricing--- Evidence from a Regression Discontinuity Design (Job market paper)2013

    Using the Russell Index 1000/2000 inclusion as the discontinuity design setting, I find a causal effect of institutional ownership (IO) on bank loan pricing. Specifically, I find that an exogenous positive shock in institutional ownership appears to only affect the pricing term of bank loans but not the non-pricing terms. On average, a 35% increase in IO will lead to a 29 bps lower loan spread which is about 1/3 of the average spread. However, the non-pricing terms such as collateral, maturity, and covenants do not change with the increase in IO. The reduction in loan spread is supported by the evidence that high IO firms will have lower credit risk measured by expected default frequency using Merton model. Also, this effect is weaker for the family firms. Further investigation reveals that increase in liquidity and direct monitoring from institutional investors could be the channels through which institutional ownership affects bank loans pricing. Moreover, although the cost of bank loan is lower for firms with higher institutional ownership, these firms do not borrow more frequently than those with lower institutional ownership.

  • Relationship Bank Behavior During Borrower Distress and Bankruptcy (with Yan Li, Anand Srinivasan) (R&R at Journal of Finance)2013

    This paper provides a comprehensive examination of the differences in relationship bank behavior for a set of borrowers that undergo distress relative to normal times. Prior to distress, banks offer preferential contract terms in the form of lower interest rates and less collateral requirements to their relationship borrowers. After the onset of distress, banks offer identical loan contract terms both to their relationship borrowers and outside borrowers. Further, loan availability from relationship lenders (relative to outside lenders) is significantly lower after the onset of distress.

  • Do Banks Monitor Corporate Decisions Evidence from Bank Financing of Mergers and Acquisitions (with Sheng Huang, Anand Srinivasan)
    (Presented by me at CICF 2013, Australasian Finance & Banking Conference 2012 (PhD forum & normal section), Seventh Annual Conference on Asia-Pacific Financial Markets 2012 (Best Paper Award), AsianFA 2012)


    We examine whether banks, in providing financing for the M&A deals, monitor firms' mergers and acquisitions to the extent that will benefit acquirers' shareholders. Inconsistent with the conventional theoretical argument, we do not find that bank-financed deals are associated with better stock or accounting performance than bond-financed deals or deals paid with internal cash. There is strong evidence instead that banks tighten up the loan contract terms in financing the deals, such as cutting short the loan maturity and imposing higher collateral requirements and more covenant restrictions. However, bank-financed deals are more likely to be terminated when they experience larger negative stock market reactions to deal announcements, suggesting that banks may be subject to the pressure of shareholder dissent. Overall, our results suggest that banks do not monitor to enhance firm value but rather protect themselves from downside risks through more stringent loan contract terms. This study highlights the passive role of banks in corporate decisions outside of credit default states and covenant violations.

  • Subjective or Objective? Nonparametric Estimation Of Misreporting and Mis-assessment in Corporate Credit Rating (with Yao Luo, Ruli Xiao) (Australasian Finance & Banking Conference 2013, scheduled)2013

    This paper investigates the misreporting and mis-assessment of corporate credit ratings by credit rating agencies (CRAs). We distinguish between "mis-assessment", which is the noise from the unobservable true rating to the rating perceived by CRAs (the internal rating), and "misreporting", which is the difference between perceived and reported rating by CRAs. Using a sample of corporate credit ratings during 1986-2011, we find that the mis-assessment in credit rating is very small and statistically insignificant. However, there is a U-shaped relationship between true credit rating and misreporting probability. Specifically, CRAs misreport the credit ratings for high-grade firms with a probability of 3%, for middle-grade firms with a probability of 0, and for low-grade firms with a probability of 6%. Second, the misreporting behavior of CRAs differs significantly across the industries. The financial industry has the highest misreporting probability (35% in the lowest-grade firms) and the largest misreporting magnitude (rating grade jump between true and reported grade). The energy industry has the lowest misreporting probability. Last, when economic conditions are bad, the credit rating agencies are more likely to deflate the rating.

Conference Presentation

  • 2013 China International Conference in Finance (CICF)2013
  • 25th Australasian Finance & Banking Conference & PhD forum (AFBC) (Australia)2012
  • Seventh Annual Conference on Asia-Pacific Financial Markets (CAFM) (Korea)2012
  • AsianFA annual meeting (Taipei) 2012
  • U21 Doctoral Research Conference in Business (University of Connecticut) 2012


  • Tutor, Basic Finance: Teaching evaluation 4.37/5 (Department average 3.99)2012
  • Instructor, Econometrics Using STATA: Preparatory class for incoming PhD students in business school2012
  • Teaching Assistant, Investment Analysis2012
  • Teaching Assistant, Transaction Banking 2013
  • Instructor, Finance I, MFin2014
  • Instructor, Financial Market and Financial Institutions, Undergraduate2015
  • Instructor, International Financial Management, Undergraduate2015
    Instructor, Chinese Financial Markets and Institutions, Undergraduate2016
  • Syllabus; Lecture 1; Lecture 2; Lecture 3; Extra for L2; Lecture 4; ; Lecture 5; Group; Case for group 1-4; Case for group 5-8;; Case for group 9-12