Prof. Hui Chen

Professor Chen's research focuses on (1) the impact of financial frictions for asset pricing and corporate decisions, and (2) the intersections of economics and machine learning. One of his recent projects studies the interactions between financial distress and price competition. Firms tend to compete on prices more when they are in financial distress. More intense competition can in turn reduce firms' profit margins and push weaker firms further into distress. By studying this feedback loop, the paper generates new insights about how the industry structure and strategic concerns affect price competition and credit risk. He also studies the Chinese financial markets, including the role of repo markets in shadow banking, and how to quantify the impact of pledgeability for the pricing and liquidity of corporate bonds. Chen also has ongoing research projects that try to integrate machine-learning tools with economic theory. For example, he is developing methods to improve the robustness of credit risk forecasting models against adversarial attacks.