Yan Wang

Associate Professor of Finance

Finance and Business Economics

DeGroote School of Business

McMaster University

Email: ywang@mcmaster.ca

Phone: +1(905)525-9140 ext. 23984


Working Papers

Labor and corporate finance

Abstract: Using the near universe of online job postings from 2007 to 2021, we construct a firm-level metric of local labor market concentration. We find that firms hiring in more concentrated labor markets tend to have higher financial leverage. Our finding is unlikely to be driven by the correlated labor market characteristics or unobserved local labor market shocks. The positive relation between labor market concentration and financial leverage is less pronounced when the firm hires workers in occupations with high labor mobility and workers with specialized skills and high skill transferability. To establish causality, we exploit the establishment of Amazon HQ2 in Crystal City, Virginia as a shock to the local labor market concentration, and our findings are consistent with our baseline results. 

Abstract: We show that an increase in the cost of unskilled labor leads to more labor-saving innovation. Larger minimum wage increases are associated with larger increases in automation patent applications and citations received by automation patents. These findings are stronger in states with a higher binding wage percentile, i.e., where the minimum wage increase has more ‘bite’. The increase in automation patents following minimum wage hikes contributes to poorer employment outcomes for unskilled workers employed in routine tasks. We conclude that minimum wage legislation spurs innovation that displaces the very same workers the legislation was designed to help.

Product markets and corporate finance

Abstract: This paper investigates the effect of product market competition on a firm’s tax avoidance behavior. We develop a theoretical model showing that a greater product market competition could increase the managerial incentive of tax avoidance due to a “threat-of-demotion” effect but decrease shareholders’ incentive of tax avoidance due to a “value-of-tax-saving” effect, resulting in a nonlinear impact of product market competition on tax avoidance. Empirically, we find consistent evidence that the effect of product market competition on a firm’s tax avoidance has an inverted U-Shape. Our analysis highlights that the product market competition could have a two-faced impact on a firm’s tax avoidance activities.

Research Grants