Main Publications

1. The threshold effect of climate risk and the non-linear role of climate policy uncertainty on insurance demand: Evidence from OECD countries. Finance Research Letters 2023, with Bing Liu, Gang Chen and Jing Yao

This paper investigates whether climate risk and climate policy uncertainty (CPU) have traditional linear or complicated non-linear impacts on insurance demand. We find evidence that both phenomena exist. Linear model shows positive effect of climate risk and negative effect of CPU on insurance demand. However, climate risk and CPU are interdependent, non-linear analysis demonstrates that CPU acts as a threshold. In particular, climate risk has a U-shaped relationship with life insurance demand and an inverse S-shaped relationship with non-life insurance demand, which provides insurance companies with a better understanding of how insurance demand fluctuates under climate risk.

2. Linguistic-induced life insurance consumption. Economic Analysis and Policy 2024, with Bing Liu and Cuixia Chen

Linguistic research shows that there are differences in how language distinguishes future events from the present. When a language speaker separates the grammatical structure of a language from the future and present, they also separate the future and present in behavior when facing intertemporal choices. In this study, we investigate language induced time perception as a determinant of cross-country life insurance consumption. The evidence demonstrates that life insurance consumption is higher in countries where there is non-obligatory grammatical future tense in language. This result still confirms the language-insuring hypothesis after considering cultural dimensions, alternative language variables, alternative insurance variable and endogeneity problem. To sum up, the results suggest that language featured by future time reference affects speaker’s time perception and life insurance decision. Our evidence also provides implication for life insurer in multinational businesses. 

3. Invisible handcuffs: Nepotism culture and SMEs’ innovation. Finance Research Letters 2025, with Wenyu Xie and Dorothy Tu

This paper investigates how nepotism culture affects SMEs’ innovation behavior. Using a large international datasets of small and medium enterprises, we establish the negative effect of nepotism culture on SMEs’ innovation, and observe the heterogeneous impact based on the presence of informal payments, financial constraints, and female ownership. Our results suggest that nepotism culture hinders highly skilled human capital and formal training, both of which are paramount for technological advancement and economic development. The policy implication is that promoting merit-based recruitment and reducing nepotistic practices could enhance innovation capacity, especially by fostering a more competitive environment.

Other Publications

1. Optimal Investment-reinsurance Strategies for an Insurer with Options Trading Under Model Ambiguity. Methodology and Computing in Applied Probability  2024, with Tong Qian, Cuixia Chen and Bing Liu 

Working Papers

1. A tale of investment efficiency: The real effects of biodiversity risk exposure. SSRN 2023, with Bing Liu and Han Zhou

Using 10-K statements of US firms from 2008 to 2020, we establish that biodiversity risk exposures increase investment efficiency. The positive effect of such risk on investment efficiency is stronger in higher fintancially constrained firms and non-most biodiversity negatively affected industries. Overall, biodiversity risk exposure enhances investment efficiency for natural loss economy. 

Working Papers in Progress

State Capacity, Corruption and Public Utility Obstacles