Dragon Yongjun TANG
Prof. Dragon Yongjun TANG
Associate Director, Centre for Financial Innovation and Development

2219 4321

KK 1004

Academic & Professional Qualification
  • Ph.D., University of Texas at Austin
  • M.S., Texas A&M University
  • B.S., Jilin University

Prof. Dragon Yongjun TANG received his Ph.D. in finance from the University of Texas at Austin in 2005.  He also holds a B.S. from Jilin University, and M.S. from Texas A&M University.  Dragon joined The University of Hong Kong (HKU) in 2007, and became Associate Professor of Finance in 2013.  Before joining HKU, Dragon also held teaching positions at the University of Texas at Austin and Kennesaw State University.

Dragon’s current research interests include credit risk, credit derivatives, and Chinese banking and credit markets.  He has previously done research on mutual funds and Bayesian methods in finance.  His research articles are published in top journals such as the Journal of Finance and Journal of Financial Economics.  He has also received numerous research awards.

In HKU, Dragon was the Director of the Master of Finance Programme in 2012 – 2015, and has been the Associate Director of the Center for Financial Innovation and Development since 2013, and of the Center for China Financial Research since 2015.

More information can be found at http://www.fbe.hku.hk/~yjtang.

Research Interest
  • Green Finance and ESG
  • Credit Risk
  • Credit Derivatives
  • China Credit Markets
Selected Publications
  •  “Subnational Debt of China: The Politics-Finance Nexus” with Haoyu Gao and Hong Ru, 2021, Journal of Financial Economics 141, 881-895.
  • “Credit Default Swaps and Bank Regulatory Capital” with Chenyu Shan, Hong Yan, and Xing (Alex) Zhou, 2021, Review of Finance 25, 121-152.
  • “Is “Greenness” Priced in the Market? Evidence from Green Bond Issuance in China” with Zhiyao Deng and Yupu Zhang, 2020, Journal of Alternative Investments 23, 57-70.
  • “Do Shareholders Benefit from Green Bonds?” with Yupu Zhang, 2020, Journal of Corporate Finance 61, 101427.
  • “Do Banks Still Monitor When There is a Market for Credit Protection?” with Chenyu Shan and Andrew Winton, 2019, Journal of Accounting and Economics 68, 101241.
  • “Employees’ Risk Attitude and Corporate Risk Taking: Evidence from Pension Asset Allocations” with Yanling Guan, 2018, Journal of Corporate Finance 48, 261-274.
  • “Model Specification and Collateralized Debt Obligation (Mis)Pricing” with Dan Luo and Sarah Qian Wang, 2018, Journal of Futures Markets 38, 1284-1312.
  • “Credit Default Swaps, Exacting Creditors and Corporate Liquidity Management” with Marti Subrahmanyam and Sarah Qian Wang, 2017, Journal of Financial Economics 124, 395-414.
  • “Understanding Transactions Prices in Credit Default Swaps Market” with Hong Yan, 2017, Journal of Financial Markets 32, 1-27. Lead Article
  • “The Leverage Externalities of Credit Default Swaps” with Jay Li, 2016, Journal of Financial Economics 120, 491-513.
  • “Credit Default Swaps: Past, Present, and Future” with Patrick Augustin, Marti Subrahmanyam, and Sarah Qian Wang, 2016, Volume 8 of Annual Review of Financial Economics.
  •  “Suitability Checks and Household Investments in Structured Financial Products” with Eric Chang and Miao Zhang, 2015, Journal of Financial and Quantitative Analysis 50, 597-622.
  • “Internal Control Quality and Credit Default Swap Spreads” with Feng Tian and Hong Yan, 2015, Accounting Horizons 29, 603-629.
  • “Does the Tail Wag the Dog? The Effects of Credit Default Swaps on Credit Risk” with Marti Subrahmanyam and Sarah Qian Wang, 2014, Review of Financial Studies 27, 2927-2960.
  •  “Credit Default Swaps (CDS): A Survey” with Patrick Augustin, Marti Subrahmanyam, and Sarah Qian Wang, 2014, Foundations and Trends in Finance 9(1-2), 1-196.
  • “Potential Losses from Incorporating Return Predictability into Portfolio Allocation”, 2014, Australian Journal of Management 39, 35-45.
  • “Rating Shopping or Catering: An Examination of Response to Competitive Pressure for CDO Credit Ratings” with John Griffin and Jordan Nickerson, 2013, Review of Financial Studies 26, 2270-2310.
  • “Did Subjectivity Play a Role in CDO Credit Ratings?” with John Griffin, 2012, Journal of Finance 67, 1293-1328.
  • “Did Credit Rating Agencies Make Unbiased Assumptions on CDOs?” with John Griffin, 2011, American Economic Review Papers and Proceedings 101:3, 125-130.
  • “Market Conditions, Default Risk, and Credit Spreads” with Hong Yan, 2010, Journal of Banking and Finance 34, 724-734.
  • “Unitary Boards and Mutual Fund Governance” with Sophie Xiaofei Kong, 2008, Journal of Financial Research 31, 193-224.
  • “Macroeconomic Conditions, Firm Characteristics, and Credit Spreads” with Hong Yan, 2006, Journal of Financial Services Research 29, 177-210.
Awards and Honours
  • Research Grant from International Network for Sustainable Financial Policy Insights, Research, and Exchange (INSPIRE), June 2019
  • Outstanding Paper Award, 13th International Conference on Asia-Pacific Financial Markets, Seoul, 2018
  • Best Paper Award (sponsored by Elsevier and Pacific-Basin Finance Journal), Asian Finance Association Annual Meeting, Tokyo, Japan, 2018
  • Outstanding Paper Award, 15th Financial System Engineering and Risk Management Conference, 2017
  • FGV/HSG Best Paper Award in Finance, 2016
  • Best Doctoral Dissertation Supervision Award, National Economics Foundation of China, 2016
  • General Research Fund, Research Grant Council, Hong Kong, PI, 2016
  • General Research Fund, Research Grant Council, Hong Kong, Co-I, 2016
  • Outstanding Researcher Award, the Faculty of Business and Economics (HKU Business School), 2015
  • Best Paper Award (Derivatives), Northern Finance Association Annual Meetings, 2014
  • Best Paper Prize, the 5th Annual Financial Markets and Corporate Governance Conference, 2014
  • Research Output Prize, The University of Hong Kong (香港大学研究成果獎), 2013
  • Best Paper Award, 20th Annual Conference on the Theories and Practices of Securities and Financial Markets at National Sun Yat-Sen University, 2012
  • Research Project Award, Paul Woolly Centre for Study on Market Dysfunctionality, 2012
  • The Chinese Finance Association Award for the Best Paper on Chinese Financial Markets, 2011
  • Semifinalist for Best Paper Award, Financial Management Association, 2010
  • Best Paper Award, 17th Annual Conference on the Theories and Practices of Securities and Financial Markets at National Sun Yat-Sen University, 2009
  • Best Paper Award (Risk Management), Financial Management Association, 2009
  • Journal of Financial Research Outstanding Article Award, 2009
  • Best Paper Award, International Economics, Finance, and Accounting Conference at National Taiwan University, 2008
  • Best Paper Award (Financial Institutions), Eastern Finance Association, 2006
Recent Publications
Subnational Debt of China: The Politics-Finance Nexus

We provide direct evidence that governments selectively default on debt when they can identify creditors. Analyzing a comprehensive data set of subnational debt, we show that Chinese local governments choose to default on banks with weaker political power. A reduction in a bank's political power relative to other banks increases the likelihood of selective default by local governments. Such default selections are driven by banks’ influence over politician promotion. When local politicians are highly ranked or connected to national leaders, they engage less in selective default as their promotion is less affected by bank loan defaults. Our findings suggest a politics-finance nexus through which government defaults are restrained.