Job Market Paper

  • Abstract
    This paper examines how frictions encountered during the initial purchase mortgage origination process shape borrowers’ future refinancing behavior and contribute to wealth disparities. Leveraging variation in loan officer workload as a quasi-random source of lender-induced origination delays, I find that experiencing a 60+ day delay lowers quarterly refinancing rates by 16–24%. Minority borrowers, low-income households, and those with lower credit scores are more likely to encounter such frictions, with evidence pointing to lender bias as a potential driver of racial disparities. Simulations from a structural refinancing model indicate that origination delays impose an average present-value loss of about $3,090 per affected borrower, equivalent to roughly $1.3 billion in annual costs when aggregated across delayed borrowers. The structural model further highlights distributional heterogeneity in these losses, a general equilibrium effect on mortgage pricing, and policy counterfactuals—such as an initial-rate concession or a separating-equilibrium scheme—that could substantially mitigate the costs.
    • Winner of the Best Paper Award, USC Marshall PhD Conference in Finance 2025
    • Winner of the Best Poster Award, ABFER Annual Conference 2025
    • Presentations 2025: ABFER Annual Conference Poster Session, AsianFA Annual Conference, BFWG International Conference, FIRS, USC Marshall PhD Conference in Finance, WSB Summer Research Conference, FMA Annual Meeting (Scheduled), Real Estate Finance and Investment Symposium (Scheduled), UEA North American Meeting (Scheduled)
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Working Papers

  • Nonbank Growth and Local Housing Booms (with Hyun-Soo Choi and Yongheng Deng).
    Abstract
    We study the effect of uneven nonbank mortgage expansion on localized housing market dynamics. Leveraging the local conforming loan-eligible share as as an instrument for nonbank credit supply, we show that increased nonbank lending drives housing booms, characterized by rapid home price appreciation, rising transaction volumes, and intensified market competition. The effects of nonbank credit are especially persistent in census tracts near affluent neighborhoods, potentially by facilitating gentrification, while more short-lived in areas farther from these neighborhoods. Additionally, we demonstrate that nonbank credit expansion has contributed to narrowing within-county price disparities across neighborhoods, thereby reshaping wealth distribution. Our findings highlight the crucial role of nonbank credit in housing market trends and household welfare.
    • Presentations 2025: ABFER Annual Conference, AREUEA International Conference*; 2024: AREUEA National Conference, Annual Conference on Asia-Pacific Financial Markets*, Asia-Pacific Association of Derivatives*, FSU-UF Critical Issues in Real Estate Symposium, Nanyang Technological University*, National University of Singapore*, Seoul National University*, Sungkyunkwan University*, TFA-KFA Joint Conference*
      (*: presentation by coauthor)
  • Abstract
    We investigate commercial mortgages for retail properties following the second wave of the COVID-19 pandemic, employing a novel instrumental variable (IV) strategy. Utilizing exogenous geographic variations in COVID-19 spread induced by different rainfall levels during Black Lives Matter (BLM) protests, we find that the spread of COVID-19 results in reduced customer visits to retail stores, leading to a surge in financial distress for retail property owners. Subsequently, we observe an increase in business closures in defaulted retail properties in the following year, particularly in areas where tenant eviction moratoriums are not enforced. Our findings suggest that (1) the pandemic would lead to a substantial surge of mortgage defaults if there was no debt forbearance; and (2) the financial pressures on landlords with defaulted mortgages lead to more stringent eviction practices against distressed tenants. The adverse real impact on local businesses could be alleviated through either debt forbearance or eviction moratorium policies.
    • Presentations 2022: AREUEA-ASSA Conference*
      (*: presentation by coauthor)
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Publications

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Book Chapter

  • The American Housing Finance System: Structure, Evolution, and Implications (with Yongheng Deng and Susan M. Wachter), 2024, August. Oxford Research Encyclopedia of Economics and Finance. [SSRN]
    Abstract
    The U.S. housing finance system has been characterized by fixed-rate, long-term, and high maximum loan-to-value ratio mortgage loans, with unique support from secondary market entities Ginnie Mae and the government-sponsored enterprises, Fannie Mae and Freddie Mac. The authors provide a comprehensive review of the U.S. housing finance system, from its structure and evolution to the current continuing policy debate. The “American Mortgage” provides many more options to borrowers than are commonly provided elsewhere: U.S. homebuyers can choose whether to pay a fixed or floating rate of interest; they can lock in their interest rate in between the time they apply for the mortgage and the time they purchase their house; they can choose the time at which the mortgage rate resets; they can choose the term and the amortization period; they can generally prepay without penalty; and they can generally borrow against home equity. They can also obtain insured home mortgages at attractive terms with very low down payments. Perhaps most importantly, in the typical mortgage, payments remain constant throughout the potentially 30-year term of the loan. The unique characteristics of the U.S. mortgage provide substantial benefits for American homeowners and the overall stability of the economy. This article describes the evolution of the housing finance system which has led to the predominant role of this mortgage instrument in the United States.
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Pre-Doctoral Works

  • Innovation Spillovers Within Business Groups: Evidence from Korean Chaebol (with Kyounghun Lee, Frederick Oh, and Donglim Shin), 2024. Emerging Markets Review, 60, 101151.
    Abstract
    This study examines innovation spillovers within business groups, focusing on Korean chaebols. We find that an affiliated firm's innovation is affected positively by both within- and outside-group innovation spillover pools. Specifically, the impact of the within-group pool is more pronounced than that of the outside-group pool. We further find that within-group spillovers are stronger for affiliates with closer internal business relationships and for those whose controlling shareholders have higher group- or firm-level equity stakes. Finally, we show that greater within-group innovation spillovers lead to higher group-level innovative performance. Overall, our study suggests a pivotal role of business groups in promoting corporate innovation via effective innovation spillovers.
  • Internal Labor Markets and Corporate Innovation: Evidence from Korean Chaebol (with Kyounghun Lee, Frederick Oh, and Donglim Shin), 2023. International Review of Economics & Finance, 85, 146-162.
    Abstract
    This study investigates the effect of internal labor markets (ILMs) on corporate innovation, focusing on Korean chaebols. Prior to examining the effect of ILMs, we confirm their efficiency, finding that chaebol firms with lower (higher) growth opportunity exhibit higher (lower) subsequent labor outflows. Further, ILM efficiency is more pronounced for firms within a more diversified chaebol, those whose controlling shareholder has lower equity stakes, and during a financial crisis period. We then investigate the effect of ILMs on innovation. We find that ILM efficiency leads affiliated firms to show greater innovative performance. Moreover, this positive influence is more pronounced for firms that receive internal capital. Overall, our study suggests the importance of ILMs in promoting corporate innovation among group firms.
  • Does Venture Capital Investment Enhance Corporate Innovation? Evidence from Korea (with Kyounghun Lee, Frederick Oh, and Donglim Shin), 2022. Journal of Business Finance & Accounting, 50(1-2), 236–266.
    Abstract
    We examine whether venture capital (VC) investment enhances corporate innovation in Korea. Using a matched sample of 802 firms from 1998 to 2012, we find that after the first round of VC investment, VC-backed firms are more innovative than non-VC-backed firms. Our results suggest that the positive influence of VC investment largely comes from the ability of VC firms to reduce information asymmetry between investors and ventures: VC funds managed by independent venture capitalists significantly enhance corporate innovation, whereas those managed by governmental venture capitalists do not. Furthermore, this positive influence becomes more pronounced where there is greater information asymmetry. Finally, we show that funds with profit-based compensation structures are more likely to encourage corporate innovation than those with fee-based compensation structures.
  • Social Capital and Firm Innovation: Evidence from Cooperative Banking in Korea (with Frederick Oh), 2021. Asia-Pacific Journal of Financial Studies, 50(2), 147-175.
    Abstract
    This study investigates the link between social capital and firm innovation by examining the cooperative banking channel in Korea. Social capital has a positive impact on the activities of cooperative banks, thus fostering innovation in regional firms. We first confirm a positive association between social capital and firm innovation in Korea and find that firms located in provinces with higher social capital innovate more. We then show that social capital positively influences firm innovation mainly through the cooperative banking channel. Further, we demonstrate that the cooperative banking channel is more pronounced in regions where cooperative banks are riskier, human capital is less, and commercial banking is less developed.
  • The Role of Chonsei as a Price Protector in the Korean Housing Market (with Frederick Oh), 2019. International Economic Journal, 33(1), 27-41.
    Abstract
    In this study, we investigate whether ‘Chonsei,’ the distinctive type of housing contract system in Korea, has a favorable impact on house prices during a market downturn. We show the mechanism in which Chonsei prevents a sharp drop in house prices based on sellers’ loss aversion behavior. Moreover, using data on the Seoul condominium (i.e. apartment) market during the 2006–2017 period, we find that Chonsei prices have a negative impact on the housing trade volume in a market recession. This finding is consistent with our argument that loss aversion behavior appears with regard to the rise in Chonsei prices and thereby Chonsei functions as a price protector in the Korean housing market.