Professor Jing Wu is an assistant professor at the Department of Decision Sciences and Managerial Economics of CUHK Business School, the Chinese University of Hong Kong, and executive committee member of the Hong Kong-Shenzhen Finance Research Center. He receives both his Ph.D. (major in operations, minor in economics & finance) and MBA from the University of Chicago Booth School of Business, and receives his bachelor degree in Electronic Engineering from Tsinghua University.
Professor Wu's primary research fields are the operations-finance interface, economic networks, quantitative investment, and machine learning applications. His work appears in several INFORMS and IEEE journals. Professor Wu contributes to the industry by advising FinFabrik.com (a Hong Kong FinTech firm) and an asset management firm in Mainland China. Prior to Greater China, he worked at Deutsche Bank New York as a quantitative strategist.
Professor Jing Wu
Decision Sciences and Managerial Economics, CUHK Business School, the Chinese University of Hong Kong
The Hong Kong-Shenzhen Finance Research Center, the Shenzhen Finance Institute (SFI)
+852 3943 5299
Rm 915, 9/F Cheng Yu Tung Building, Shatin, Hong Kong SAR, China
We study if global supply chain relationships help firms access cross-border financing in formal international financial markets. Comparing two firms that are otherwise similar in covariates and pre-formation outcomes through a difference-in-differences strategy with matching, we find the formation of global supply chain relationships to be associated with a sustained increase in accessing of cross-border financing, across all major formal financing venues including cross-listings, bonds, syndicated loans, and M&As. Instrumenting global supply chain formation using reduction in physical trade costs yields similar results. This finding is also robust to controlling for strategic disclosure concerns. The estimated effect is stronger for firms in environments with higher accounting and ethical standards and small and growing firms, but weaker for firms in countries with tighter capital controls and more volatile exchange rates. This suggests global supply chain formation helps cross-border financing more through information production, not cash flow relocation or re-denomination.
1. "Credit Risk Propagation along Supply Chains: Evidence from the CDS Market,"
(Featured at 2018 SFS Cavalcade, 2018 NFA, 2018 EEA)
We find that credit risk propagates through multiple supply chain tiers for both positive and negative credit shocks. Specifically, rating and industry-adjusted CDS spreads change by 44-71 bps for the first tier. Strong propagation persists for 2nd and 3rd tiers for adverse shocks but attenuates for favorable shocks. Such effects are not observed for inactive supply chain links. Credit risk propagation is magnified with longer-term supply-chain relations, trade credit, differentiated products, and leverage, but is moderated with investment grade rating and high inventory. Credit risk propagation is stronger for supply chain partners followed by the same analysts.
2. "The Bullwhip Effect in Supply Networks,"
with Nikolay Osadchiy and William Schmidt, major revision at Management Science, available at SSRN.
(Featured at 2019 MSOM, 2018 Wharton EMPOM)
We offer a new network perspective on one of the central topics in OM - the bullwhip effect (BWE). We start with a puzzling observation: while the traditional intra-firm measure of the BWE increases at upstream layers of the network, the demand variability experienced by upstream firms does not increase commensurably. To reconcile these two facts, we hypothesize that firms manage their customer base to smooth out the aggregate demand. We provide evidence that buyer-supplier relationship formation or dissolution is associated with smoothing of the aggregate demand experienced by suppliers. This provides fresh insight into how firms may leverage their buyer-supplier relationships to mitigate the impact of the BWE.
3. "Global Supply Chains and Cross-Border Financing,"
with Michael Hertzel, Jie Peng and Yu Zhang, R&R at Management Science, available at SSRN.
(Featured at 2019 MSOM SIG, 2019 Wharton EMPOM)
We study if global supply chain relationships help firms access cross-border financing in formal international financial markets, using a comprehensive dataset of global supply chain relationships and cross-border financing deals. Comparing two firms that are otherwise similar in covariates and pre-formation outcomes through a difference-in-differences strategy with matching, we find that formation of global supply chain links is positively associated with a sustained increase in cross-border financing across bond, cross-listing, syndicated loans and M&A markets. This association is robust to controlling for standard firm-level determinants, industry-specific and country-specific shocks, and endogeneity. We examine multiple economic channels. We establish an important informational channel for the relation between global supply chain integration and cross-border financing, supported by a battery of tests, including heterogeneity, regression discontinuity, and supply chain voluntary disclosure. We do not find capital control, currency risks, or external financing dependence to be as important.
4. "The Financing Role of Inventory: Evidence from China’s Metal Industries,"
with Vernon Hsu, major revision at Management Science, available at SSRN.
(Featured at 2019 CSAMSE Best Paper Award)
Inventory theory suggests that inventory plays vital roles in the matching of demand and supply. We provide theoretical and empirical evidence that inventory can play a significant financing role in practice. In the context of global supply chain transaction, we develop a model to show that inventory can be leveraged to take advantage of the financial arbitrage opportunities in markets with frictions. Empirically, we first use country-level data in China to test the model prediction after controlling for input price trajectory, currency risk, industrial demand, and economic uncertainty. We then confirm the strong financing role of inventory at the firm-level using data from China’s metal processing industries after controlling for demand, lead-time, profitability, capacity, and firm size. We further substantiate that the firms who use inventory as a financing tool indeed increase their short-term debts.
5. "Not Coming Home: Trade and Economic Policy Uncertainty in American Supply Chain Networks,"
(Featured at 2020 ADBI PRN Joint Conference)
We study the effect of American trade policy uncertainty (U.S. TPU), American non-trade economic policy uncertainty (U.S. EPU), and foreign economic policy uncertainty (foreign EPU) on the supply chain network of American public firms. As a motivating example, we find firms with more domestic suppliers increase foreign supplier relationships even before the onset of the China-U.S. trade war in March 2018, beginning around the time of President Trump’s campaign bid. In reduced-form analyses, we find higher U.S. TPU predicts trade creation – rather than bringing production “home”, American firms’ supplier and customer bases tilt abroad when U.S. TPU increases. The tilt is also associated with lower long-term strategic investments and asset growth. Meanwhile, foreign-country EPU shocks lead to trade diversion to other foreign countries. Firms for which production shocks would be more severe and those more central to the production network respond more to all measures of economic policy uncertainty.
6. "Sourcing from Suppliers with Financial Constraints and Performance Risk,” with Christopher S. Tang and S. Alex Yang, M&SOM, Vol. 20, No. 1, 2018, p. 70-84, available at SSRN.
8. "Socially Connected Supply Chains," with Haoyuan Ding, Yichuan Hu, and Yu Zhang, available at SSRN.
7. "Supply Chain Network Structure and Firm Returns,” with John R. Birge, available at SSRN.
9. "CEO Myopia and Supply Chain Investment,” with Yifan Jia, Zheng Wang, and Zilong Zhang, available at SSRN.
10. "Trade Credit Delayed Payment,” with John R. Birge, draft available upon request.
12. “Accounting Comparability and Global Supply Chains,” with Boluo Liu and Xiangang Xin, coming soon. .
11. "Endemic Population Trust and Supply Chains,” with Volodymyr Babich, Gilles Hilary, and Zi'ang Wang, coming soon.
13. "Jobenomics: Productivity Shocks and Skillset Migration, a Natural Language Processing (NLP) Approach,” working.
FINA6020 FinTech Analytics (2019-2020, CUHK)
DSME6682 FinTech Application (2019-2020, CUHK)
MS6325 Operations Management (2016-2019, CityU)
Supply Chain Finance (2017, Tsinghua EMBA)
DSME6756 Business Intelligence Techniques and Applications (2019-2020, CUHK)
FB8918 Machine Learning for Business Research (2018-2019, , CityU Ph.D. Elective)
Project 1. UBS (Hong Kong) 2017.09-2017.12
We investigate the optimal trading execution strategy of in the China A-Share market by different investment styles and market liquidity conditions. The research outcome is featured at the Annual UBS APAC Quant Conference.
Project 2. A Top Investment Bank 2019.06-current
We develop the credit risk model for small & middle enterprises based on their financial information and their economic networks.
FOR RESEARCH STUDENTS:
We always welcome undergraduate and graduate research students. Our RAs are accepted in top business/economic Ph.D. programs. Email me for a research opportunity.
FOR QUANT SOLUTIONS:
We partner with institutional research teams at Deutsche Bank, JP Morgan, and UBS. Our research has practical implications for quantitative investing and beyond. Email me for related industry opportunity.