Gaoqing Zhang. Carnegie Mellon University Mobile: (412) Tech and Frew Street Office: (412)

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1 Office: GSIA A-19B Mobile: (412) Tech and Frew Street Office: (412) Pittsburgh, PA, EDUCATION, Ph.D. in Accounting GPA: 4.0 / 4.0, Minor in Finance Pittsburgh, PA 2014 (expected) School of Management, Fudan University Shanghai, China B.Sc. in Finance 2009 GPA: 3.83 / 4.0, Rank: 1 / 60 RESEARCH INTERESTS Financial Accounting, Financial Institutions, Higher-order Beliefs, Global Games, Industrial Organization JOB MARKET PAPER Public Disclosure, Liquidity Risk and the Parallel Banking System Dissertation Committee: Pierre Liang (Chair), Jonathan Glover, and Carlos Corona WORKING PAPERS with Carlos Corona and Lin Nan under revision for 3rd round review at The Accounting Review Fair Market Value Could Have Contributed to the Crash with Radhika Lunawart, Kira Pronin and Jack Stecher under 1st round review at Journal of Accounting and Economics with Carlos Corona and Lin Nan to be submitted to a journal soon

2 INVITED PRESENTATIONS Annual Meeting of the American Accounting Association, Anaheim 2013 Junior Accounting Theory Conference, Anaheim 2013 Financial Accounting and Reporting Section Midyear Meeting, San Diego 2013 Fudan University, Shanghai, China 2013 Annual Meeting of the American Accounting Association, Washington DC 2012 TEACHING INTERESTS Financial Accounting, Managerial Accounting, Financial Statement Analysis TEACHING EXPERIENCE Instructor Introduction to Accounting (Undergraduate) 2013 Overall Teaching Rating: 4.55 / 5 Recitation Session Leader Introduction to Accounting (Undergraduate) 2012, 2013 Teaching Assistant Financial Managerial Accounting I (MBA) 2011, Financial Statement Analysis (MBA) Financial Statements of Banking Industry (MBA) 2011, Business Law (Undergraduate) 2011, 2012 PROFESSIONAL SERVICES Ad-hoc Reviewer American Accounting Association Annual Meeting in Denver, August, Invited Discussant American Accounting Association Annual Meeting in Denver, August, 2011.

3 AWARDS AND HONORS William Larimer-Mellon Fellowship 2009-Present CMU Graduate Student Conference Funding Award 2011, 2012 Tepper Dean s Office Graduate Student Research Support Award 2011, 2012 Wangdao Scholar (for excellent research) 2009 People s Scholarship 2006, 2007, 2009 National Scholarship of China 2008 J.P. Morgan The Deal Competition National Finalist 2007 REFERENCES Carlos Corona Assistant Professor of Accounting Jonathan Glover Professor of Accounting Phone: (412) Phone: (412) ccorona@andrew.cmu.edu jglover@andrew.cmu.edu Pierre Jinghong Liang (Chair) Associate Professor of Accounting Phone: (412) liangj@andrew.cmu.edu

4 ABSTRACTS OF PAPERS Public Disclosure, Liquidity Risk and the Parallel Banking System Job market paper This paper presents a model of shadow banking in which the shadow and the traditional banking systems share a symbiotic relationship. In this model, competition with an opaque and fragile shadow bank can benefit the traditional bank, especially when the traditional bank faces liquidity risk stemming from collective actions by investors, such as runs. The opacity and fragility of the shadow bank help to coordinate (higher-order) beliefs and actions of individual investors, which improve the management of liquidity risk faced by the traditional bank. In the parallel banking equilibrium, the traditional bank induces the shadow bank to be both opaque and fragile by lowering its own disclosure precision. With Carlos Corona and Lin Nan We study the implications of accounting information quality on banks' risk-taking behavior in a competitive environment. In our setting, banks may be forced to sell assets to meet the regulatory capital requirement. We identify an endogenous false-alarm cost of assets sales for the banks and show that this cost plays an important role in the relation between accounting information quality and the banks' risk-taking decisions. Surprisingly, we find that sometimes an improvement in the quality of accounting information actually induces the banks to take more risk. We find that, keeping the banks' investments in loans constant, the provision of high-quality accounting information reduces the false-alarm cost of assets sales and improves the discriminating efficiency of the capital requirement policy. However, if we consider the banks' endogenous investment decisions, it is precisely this improvement in discriminating efficiency that causes excessive risk-taking. This is because banks respond by competing more aggressively in the deposit market and the resulting increase in deposit costs motivates banks to take more risk. With Carlos Corona and Lin Nan We study the role of interbank competition in shaping banks' incentives to use fair-value accounting voluntarily and the impact of fair-value discretion on banks' competing strategies. We find that allowing banks discretion to use fair-value accounting may give rise to multiple equilibria in situations where the equilibrium would otherwise be unique. When the profitability in the banking industry is sufficiently large or bank competition is not intense, a mild equilibrium stands as the unique equilibrium; when the profitability is sufficiently small or

5 bank competition is very intense, an aggressive equilibrium sustains as the unique equilibrium; when the profitability is intermediate or bank competition is moderate, both mild and aggressive equilibria exist. Furthermore, we show factors that may lead to a shift between the two equilibria. The analysis in this study may provide insights and help us to better understand the role of accounting in the recent crisis. Fair Market Value Could Have Contributed to the Crash With Radhika Lunawart, Kira Pronin and Jack Stecher This article argues that fair-market value accounting could have played a significant role in the recent financial crisis, by causing a drop in demand for the structured finance products that were central to the market collapse. The culprit is the discretion inherent in the use of mark-to-model reports, in which firms report fair values that they calculate internally, rather than actual market prices. In equilibrium, discretion in mark-to-model reports leads to aggressive reporting of asset values, compared with a conservative reporting regime. Aggressive reporting weakens demand and increases financial market frictions, resulting in illiquidity. We demonstrate these effects in a laboratory experiment with a matched pairs design, and find that adopting a mark-to-model regime causes drops in prices and reduces the frequency of trade.