1. About the IWH
  2. Team
  3. Economists

Professor Xiang Li, PhD

Professor Xiang Li, PhD
Current Position

since 1/19

Head of the Research Group Financial Integration, Economic Growth and Financial Stability

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 4/25

Associate Professor

Leipzig University

since 10/18

Member of the Department Macroeconomics

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

read CV
Research Interests
  • international finance
  • Chinese economy
  • open economy macroeconomics

Xiang Li is a member of the Department of Macroeconomics at IWH since October 2018 and Associate Professor at Leipzig University since April 2025. Her research focuses on the question of what role multinational companies play in the transmission of global financial shocks. Xiang Li is one of eight female scientists across Germany who are being funded in the Leibniz Professorship Programme 2024. This programme supports internationally outstanding female scientists from all disciplines.

Xiang Li received her two bachelor's degrees and her PhD from Peking University. She was Assistant Professor at Martin Luther University Halle-Wittenberg from 2018 to 2024 in a joint appointment with IWH.

Your contact

Professor Xiang Li, PhD
Professor Xiang Li, PhD
- Department Macroeconomics
Send Message +49 345 7753-805 Personal page

Publications

Citations
197

cover_european-economic-review.jpg

Financial Technologies and the Effectiveness of Monetary Policy Transmission

Iftekhar Hasan Boreum Kwak Xiang Li

in: European Economic Review, January 2024

Abstract

This study investigates whether and how financial technologies (FinTech) influence the effectiveness of monetary policy transmission. We use an interacted panel vector autoregression model to explore how the effects of monetary policy shocks change with regional-level FinTech adoption. Results indicate that FinTech adoption generally mitigates the transmission of monetary policy to real GDP, consumer prices, bank loans, and housing prices, with the most significant impact observed in the weakened transmission to bank loan growth. The relaxed financial constraints, regulatory arbitrage, and intensified competition are the possible mechanisms underlying the mitigated transmission.

read publication
cover_emerging-markets-review.jpg

Household Indebtedness, Financial Frictions and the Transmission of Monetary Policy to Consumption: Evidence from China

Michael Funke Xiang Li Doudou Zhong

in: Emerging Markets Review, June 2023

Abstract

This paper studies the impact of household indebtedness on the transmission of monetary policy to consumption using the Chinese household-level survey data. We employ a panel smooth transition regression model to investigate the non-linear role of indebtedness. We find that housing-related indebtedness weakens the monetary policy transmission, and this effect is non-linear as there is a much larger counteraction of consumption in response to monetary policy shocks when household indebtedness increases from a low level rather than from a high level. Moreover, the weakened monetary policy transmission from indebtedness is stronger in urban households than in rural households. This can be explained by the investment good characteristic of real estate in China.

read publication
cover_journal-of-international-economics.jpg

Surges and Instability: The Maturity Shortening Channel

Xiang Li Dan Su

in: Journal of International Economics, November 2022

Abstract

Capital inflow surges destabilize the economy through a maturity shortening mechanism. The underlying reason is that firms have incentives to redeem their debt on demand to accommodate the potential liquidity needs of global investors, which makes international borrowing endogenously fragile. Based on a theoretical model and empirical evidence at both the firm and macro levels, our main findings are twofold. First, a significant association exists between surges and shortened corporate debt maturity, especially for firms with foreign bank relationships and higher redeployability. Second, the probability of a crisis following surges with a flattened yield curve is significantly higher than that following surges without one. Our study suggests that debt maturity is the key to understand the financial instability consequences of capital inflow bonanzas.

read publication
Browse all refereed publications

Working Papers

cover_DP_2024-20.jpg

Climate Policy and International Capital Reallocation

Marius Fourné Xiang Li

in: IWH Discussion Papers, No. 20, 2024

Abstract

<p>This study employs bilateral data on external assets to examine the impact of climate policies on the reallocation of international capital. We find that the stringency of climate policy in the destination country is significantly and positively associated with an increase in the allocation of portfolio equity and banking investment to that country. However, it does not show significant effects on the allocation of foreign direct investment and portfolio debt. Our findings are not driven by valuation effects, and we present evidence that suggests diversification, suasion, and uncertainty mitigation as possible underlying mechanisms.</p>

read publication
cover_DP_2023-23.jpg

Global Political Ties and the Global Financial Cycle

Gene Ambrocio Iftekhar Hasan Xiang Li

in: IWH Discussion Papers, No. 23, 2023

Abstract

We study the implications of forging stronger political ties with the US on the sensitivities of stock returns around the world to a global common factor – the global financial cycle. Using voting patterns at the United Nations as a measure of political ties with the US along with various measures of the global financial cycle, we document evidence indicating that stronger political ties with the US amplify the sensitivities of stock returns in developing countries to the global financial cycle. We explore several channels and find that a deepening of financial linkages along with a reduction in information asymmetries and an amplification of sentiment are potentially important factors behind this result.

read publication
cover_DP_2022-18.jpg

BigTech Credit, Small Business, and Monetary Policy Transmission: Theory and Evidence

Yiping Huang Xiang Li Han Qiu Dan Su Changhua Yu

in: IWH Discussion Papers, No. 18, 2022

Abstract

This paper provides both theoretical and empirical analyses of the differences between BigTech lenders and traditional banks in response to monetary policy changes. Our model integrates Knightian uncertainty into portfolio selection and posits that BigTech lenders possess a diminishing informational advantage with increasing firm size, resulting in reduced ambiguity when lending to smaller firms. The model suggests that the key distinction between BigTech lenders and traditional banks in response to shifts in funding costs, triggered by monetary policy changes, is more evident at the extensive margin rather than the intensive margin, particularly during periods of easing monetary policy. Using a micro-level dataset of small business loans from both types of lenders, we provide empirical support for our theoretical propositions. Our results show that BigTech lenders are more responsive in establishing new lending relationships in an easing monetary policy environment, while the differences in loan amounts are not statistically significant. We also discuss other loan terms and the implications of regulatory policies.

read publication
Browse all working papers

Topics

International Finance Financial Stability Productivity Financial Crisis Monetary Policy
Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoSupported by the BMWK