MENGYING WANG. Undergraduate and Postgraduate Studies. Doctoral Studies. Research and Teaching Fields. Research Papers

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1 Office Contact Information, 5298 Grainger Hall,., Phone: (608) Website: Citizenship: China (Visa F-1) Undergraduate and Postgraduate Studies B.A. in Economics, B.S. in Mathematics, Wuhan University, 2004 M.A. in Economics, Guanghua School of Management, Peking University, 2007 Doctoral Studies,, 2007 to present Ph.D. minor in Economics, GPA 4.0/4.0 Ph.D. Candidate in Finance Expected Completion Date: May, 2013 Thesis Title: Essays in Corporate Investment, Financing, and Product Market Competition Dissertation Committee Chair: Antonio S. Mello, Frank Graner Chair in Finance Research and Teaching Fields Primary fields: Empirical and Theory Corporate Finance; Investment; Securities and Derivatives Secondary fields: Financial Economics; International Finance; Industrial Organization Research Papers Investment with Imperfect Product Market Competition and Financial Constraints (Job Market Paper) 1

2 Abstract: This paper examines how imperfect product market competition and financial constraints affect corporate investment. I find that the sensitivity of firms investment to cash flow increases with their market power. This is due to two reasons. First, Tobin s q fails to capture firms conjectures of its rival s investment strategies, which gives cash flow an opportunity to explain investment. Second, the difference between the expected value of Tobin s q and its realization generates measurement errors that bias up the estimate for the effect of cash flow more for firms with greater market power. After controlling measurement errors in realized Tobin s q (the second reason), I find that the positive marginal effect of cash flow on investment is most pronounced for firms with moderate market power or operating in relatively but not highly concentrated industries. Monopolistic firms have a lower sensitivity of investment to cash flow, because cash flow has to compensate for the increased side effect on investment of monopoly rents in Tobin s q. I also find financial constraints strengthen the dependence of investment on cash flow after accounting the effect of imperfect competition in product market and measurement errors in realized Tobin s q. Overall, my results suggest that the imperfect product market competition contributes to understand the connection between capital expenditures and financing. My findings also help to address the debate on the relationship between financial constraints and investment sensitivity to cash flow. Globalization, Product Market Competition, and Corporate Investment (with Antonio S. Mello, to be presented at 2013 AFA) Abstract: This paper examines the interplay between globalization, product market competition, and corporate investment. We find that imports and foreign direct investment adversely affect domestic firms market power, but the effect of imports is more pronounced. We also find that firms that lose the most market power cut their capital expenditures more when their market power is stronger. Internal funds and market power show a complementary effect on corporate investment. Moreover, the sensitivity of investment to cash flow increasingly declines with the impact of import competition on firms market power, but it remains constant over time for firms in 15 manufacturing industries that are proxies for non-tradable industries. Lastly, we investigate whether globalization slowdowns are associated with the increase in the dependence of investment on cash flow and find supportive evidence. Overall, our results suggest that increased globalization contributes to changes in the structure of the product markets, and firms react by adjusting their investment decisions. Presentations AFA 2013, Scheduled, Peking University,

3 Teaching and Research Experience Instructor of Discussion Sections Derivative Securities, BA Level, Fall 2010 & Fall 2011 Investment Theory and Application, MBA & BA Level, Spring 2011 Introduction to Finance, BA Level, Fall 2008 & Spring 2009 Teaching Assistant Fixed Income Securities, MBA & BA Level, Spring 2012 Entrepreneurial Finance, MBA Level, Fall 2009 & Spring 2010 Project Assistant, Fall 2012 Honors and Awards Travel Award Fund, 2012 Wisconsin Finance Department Travel Award, 2012 Doctoral Fellowship,, 2008-Present Doctoral Fellowship, Department of Economics, Peking University Honor for Excellent Study Performance, 2006 Kwang-Hua Scholarship, Kwang-Hua Education Foundation, 2005 Wuhan University University Scholarship, The 2nd Winner of Mathematics Contest, IAS, 2003 Wang Shi-Jie Scholarship, Wang Shi-Jie Foundation, Research Papers in Progress The Impact of Inflow Foreign Direct Investment and Import on the U.S. Product Market (with Antonio S. Mello) This project studies how foreign producers who enter U.S. product markets choose between export and direct investment and how differently their penetration strategies affect the competition environment in U.S. markets. We provide a theoretical foundation to explain why imports to the U.S. increase competition in its product markets more than inflow from foreign direct investment. Spin-offs, Divestitures, and Information Asymmetry (with Lingxiao Li) This project studies how asymmetric information between a firm s managers and investors affect firms restructuring decisions. We use multinomial logist regressions to estimate the 3

4 effect of information asymmetry on the likelihood that a firm stays inactive, divests a business unit, or spins off a division. Export, Productivity, and Innovation (with Jixiang Hu) This project focuses on exploring the effect of innovation on the relationship between Chinese firms export decisions and their productivity. We find that firms export decisions are independent of their productivity after controlling for the impact of innovation. Also, we observe a significant increase in exporters productivity after they engage in innovation activities. Skills Computer: STATA, Matlab, Mathematica, Microsoft Excel (High Proficiency), Scientific Work Place, LaTex, Photoshop Language: Chinese (Native), English (Proficient), Japanese (Beginner) 4

5 References Antonio S. Mello (Committee Chair) Frank Graner Chair in Finance 5253 Grainger Hall Tel: (608) Elizabeth Odders-White U.S. Bank Associate Professor of Finance 5269A Grainger Hall Tel: (608) Youchang Wu Assistant Professor of Finance 5274C Grainger Hall Tel: (608)