Lin Shen

Lin Shen

Contact Information

  • office Address:

    Finance Department, The Wharton School
    2316 Steinberg-Dietrich Hall
    3620 Locust Walk
    Philadelphia, PA 19104

Links: CV


I am a PhD Candidate in Finance at the Wharton School of the University of Pennsylvania. I am on the job market this year and will be available for interviews at the 2019 ASSA annual meeting in Atlanta.

Research Interests

Corporate Finance, Financial Markets and Financial Institutions


Itay Goldstein (Chair), Doron Levit, Christian Opp, Guillermo Ordonez


Ph.D. in Finance, The Wharton School, University of Pennsylvania. Expected: 2019

B.Sc. in Quantitative Finance and Risk Management Science, The Chinese University of Hong Kong. 2013. First Class Honor


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Capital Flows in the Financial System and Supply of Credit, Job Market Paper

This paper develops a model to study how capital flows in the financial system affect the coordination problem among banks in supplying credit to the real economy. The economy is susceptible to self-fulfilling credit freezes, in which banks abstain from lending in fear that other banks will withhold lending, and the resulting credit contraction will impede economic growth. Capital flows across banks can alleviate the problem by allowing banks that are prone to supply credit to borrow from other banks and extend more credit to the real economy. However, the equilibrium interest rate reveals public information about the economic fundamentals and the aggregate willingness to lend, increasing the fragility of the credit market. As a result, the economy can get stuck in an equilibrium, in which interbank capital flows and real credit supply freeze at the same time and reinforce each other through a vicious feedback loop. My model provides empirical implications that are consistent with the shallow post-crisis recovery. I also show that regulations addressing concerns of counter-party risks help maintain active capital flows in the financial system and stabilize the real credit market.


Intervention with Screening in Global Games (with Junyuan Zou), previously “Intervention with Voluntary Participation in Global Games”

Winner of Best Graduate Paper of Lisbon Meetings 2017

We analyze a canonical binary-action coordination game under the global games framework. To reduce coordination failure, we propose a novel intervention program that screens agents based on their heterogeneous interim beliefs. Compared with conventional government-guarantee type of programs, it incurs a lower cost of implementation and suffers less from moral hazard problems. In equilibrium, only a small mass of “pivotal agents” receiving medium signals self-select to participate in the program. However, the effect is ampli ed by higher-order beliefs, and coordination failures can be significantly reduced. With negligible information frictions, our proposed program achieves the first-best outcome at zero expected cost.


Corruption and Competition (with Franklin Allen and Jun “QJ” Qian)

This paper investigates how a central government can effectively curtail the corruption of local government officials. An interesting aspect of corruption is that its damaging effects on economic performance differ significantly across countries. We show that if a central government collects sufficient taxes, it can fight corruption by rewarding local government officials based on performance. Without sufficient budget, the central government can reduce corruption alternatively by encouraging competition among local government officials. We also provide empirical evidence that differences in taxing ability and the magnitude of competition among government officials can help explain the heterogeneous effects of corruption across countries.


Optimal Regulations in Two Lemon Markets: An Application in Cross-Border Listing, Draft Available Soon

This paper studies regulatory competition in securities markets and its impact on firms’ financing decisions.  In the era of globalization, when firms have the option to obtain financing abroad, foreign regulations become relevant for domestic firms’ financing decisions. I build a model with two open economies, each having a stock market with adverse selection problems. The regulators of the two economies strategically set regulations to compete for good firms in both economies. I show that weak economic fundamentals tie the hands of a regulator in the regulatory competition because domestic firms cannot afford high regulatory burden. As a result, consistent with empirical observations of cross-border listing, there exists an equilibrium in which the strong economy has stricter regulations than the weak economy, and the good firms in the weak economy flow to the strong economy to signal for good quality.


Teaching Assistant, The Wharton School, University of Pennsylvania
Corporate Finance and Financial Institutions, PhD (2018, 2017)
Advanced Corporate Finance, MBA (2018, 2016)
Evaluating Evidence, Undergraduate (2018)
Corporate Finance, Executive MBA (2017, 2016, 2015)
% Monetary Economics and Global Economy, Undergraduate (2015)
Private Wealth Management (2018, 2017)

Teaching Assistant, The Chinese University of Hong Kong
Investment Analysis and Portfolio Management, Undergraduate (2008)

Awards and Honors

UECE Lisbon Meetings
Best Graduate Paper Award, 2017

Western Finance Association
Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, 2017

University of Pennsylvania
Wharton School Doctoral Travel Grant, 2017
Irwin Friend Doctoral Fellowship in Finance (Best third-year paper), 2016-2017
Windelman Fellowship, awarded for outstanding research, 2015-2017
John Hodges PhD Prize in Finance (Best second-year paper), 2015-2016
Miller, Anderson & Sherrerd Graduate Fellowship (Best performance in the PhD preliminary exam), 2014-2015
Dean’s Fellowship for Distinguished Merit, 2013-2018

The Chinese University of Hong Kong
Dean’s List for Distinguished Merit of Business Faculty and Science Faculty, 2009-2013
HKSAR Government Scholarship, 2009-2013


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