Centers & Initiatives
Hui Chen is the Nomura Professor of Finance and a Professor of Finance at the MIT Sloan School of Management.
His research focuses on asset pricing and its connections with corporate finance. Chen is particularly interested in the interactions between the macro economy and term structure, credit risk, and corporate financing or investment decisions. His recent research projects include application of business cycle models to explain corporate financing behavior and corporate bond pricing, as well as analysis of the effects of incomplete markets on entrepreneurial financing and investments.
Chen holds a BA in economics and finance from Zhongshan University, an MS in mathematics from the University of Michigan, and a PhD in finance from the University of Chicago.
Current Research Focus: 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.
Chen, Hui, Yu Xu, and Jun Yang. Journal of Financial Economics. Forthcoming. Download Paper.
Chen, Hui, Scott Joslin, and Sophie Ni. Review of Financial Studies Vol. 32, No. 1 (2019): 228-265. Download Paper.
Chen, Hui, Zhuo Chen, Zhiguo He, Jinyu Liu, and Rengming Xie, MIT Sloan Working Paper 5705-18. Cambridge, MA: MIT Sloan School of Management, October 2020.
Chen, Hui, and Gustavo Manso. Review of Corporate Finance Studies Vol. 6, No. 1 (2017): 1-38.
“Their analytical advantage is most significant with this mass market, where traditional banking models are most inaccessible.”