Welcome! My name is Andy Li, a third-year PhD student (= fifth in the U.S. system) in Finance at the University of Amsterdam and a visiting researcher at the Dutch Central Bank. I am currently a visiting student at the University of Oxford under the supervision of Prof. Thomas Hellmann

Upcoming Events: SFS Cavalcade 2025, NBER SI Entrepreneurship, NBER Boot Camp, Oxford PERC, Private Market Research Consortium Lausanne, Entrepreneurial Finance PhD Summer Workshop, GRASFI 2025.

Research Interests

  • Entrepreneurial Finance; Financial Intermediation; Public Economics

  • A central motivation of my work is that successful entrepreneurial ecosystems often benefit from government support. While both theory and empirical evidence highlight the positive roles governments can potentially play, not all interventions are effective. I study how their impact depends on allocation, governance, and organizational factors.

  • Keywords: Venture Capital, Government, Impact Investing, Policy, Innovation

Research

Do Development Financial Institutions Create Impact through Venture Capital Investments?

Working paper, joint with Aleksandar Andonov and Paul Smeets

Presentation: SFS Cavalcade NA 2025; NBER SI Entrepreneurship 2025; WEFI webinar; Oxford PERC; Private Market Research Conference 2025 (Lausanne); HEC Paris Entrepreneurship Workshop;1st Amsterdam Sustainable Finance Conference; GRASFI Annual Conference 2025 (Paris), LTI@UniTO Bank of Italy Workshop on Long-term Investors, IFC Private Sector Development Research Network Seminar.

Despite being among the largest institutional investors globally, Development Financial Institutions’ (DFIs) invest- ment activities remain understudied. We document DFIs’ substantial growth in venture capital (VC) investments, where they participate as limited partners in one in six deals and aim to address market failures, such as externalities and information frictions. We identify four objectives DFIs pursue through VC investments: building VC ecosystems, supporting entrepreneurship, fostering innovation, and promoting sustainability. We test whether DFIs meet these objectives and our findings vary between developed and developing economies. In developing economies, DFIs demonstrate greater mandate alignment by targeting industries with positive externalities, providing capital to underrepresented fund managers, and improving performance transparency, though they invest less in young funds and early-stage deals than conventional VCs. Firms backed by DFIs achieve similar outcomes to those backed by conventional VCs in terms of profitability, employment, patenting, and sustainability, but attract fewer follow-on investments from private capital. In developed economies, which account for most DFI VC investments, we find limited evidence that DFIs address market failures and their impact is more muted. Organizational structure and investment approach explain why DFIs generally fall short of their stated mandates. Bank-affiliated and subnational DFIs underperform, while direct investments appear more effective at realizing developmental objectives.

Elite Capture: Government Loan Guarantees for Startups

Draft available upon request, single-authored

Governments have a longstanding interest in supporting innovative startups to realize their positive externalities. While the effectiveness of such support critically depends on which firms receive it, evidence on what drives allocation remains limited. This paper introduces a mechanism that can prevent support from reaching constrained-yet-promising firms: elite capture, whereby public resources disproportionately flow to startups backed by established investors for reasons unrelated to startup quality. I study this mechanism in the context of government loan guarantees, an increasingly important tool for startup finance. My stylized model shows that elite capture arises under frictions in guarantee application and imperfect observability of startup quality, leading to inefficient allocations. Using confidential credit-registry data matched to venture capital (VC) records, I find that guarantees disproportionately flow to startups backed by top-tier VCs. These recipients already enjoy easier credit access without guarantees, do not exhibit different credit risk or innovation output, and tend to be the weaker firms within top-tier VC portfolios. Guarantees do deliver benefits by lowering collateral requirements and interest rates. To probe mechanisms, I exploit sudden expansions of guarantee programs and find that startups backed by top-tier VCs benefit more from relationship lending and program know-how. A diffusion model provides plausibly causal evidence that program knowledge matters: it spreads among VCs through syndication networks, and exposure to informed partners increases guarantee adoption. I conclude with suggestions for program design to improve allocative efficiency.

Environmental Protests against Banks

Work in progress, joint with Annick van Ool (Dutch Central Bank)

Research Grant: A Sustainable Future 2024 Fall

We document a global surge in protests against banks over environmental issues (n = 478). This paper examines the impact of these protests on banks along three dimensions. First, in the short run, we find no significant effect on banks’ stock prices. Second, we study medium-run responses in banks’ environmental communication and show that, following protests, banks increase the frequency of environment-related terms in their annual reports. Finally, we analyze long-term effects on banks’ lending practices using confidential loan-level data covering all banks operating in the euro area. We find no significant change in lending behavior following protests. To our knowledge, this is the first systematic study of protests targeting financial institutions. Overall, the real effects of civil disobedience on banks appear limited.

Determinants of spreads on European supranational debt: towards a European safe asset?

Draft available upon request.

Joint with Roel Beetsma (University of Amsterdam) and Kalin Anev Janse (European Stability Mechanism)

Presentation: European Economic Policy RPN Annual Meeting 2025, Dutch Central Bank Seminar

Education

Saïd Business School, University of Oxford

  • Visiting Student, fall 2025

  • Hosted by Prof. Thomas Hellmann

Tinbergen Institute, University of Amsterdam

  • Mphil. Economics, 2021-2023

  • Track: Advanced Econometrics and Finance

  • GPA: 1/26

University of Groningen

  • Bsc. Econometrics and Operations Research, 2018-2021

  • Minor in Math

  • GPA: 2/147

Research Experience

Dutch Central Bank

  • Visiting researcher, 2023 -

Erasmus University Rotterdam

  • Research assistant in financial econometrics, Feb - Aug 2023

University of Amsterdam

  • Research assistant in macrofinance, Feb - June 2023

University of Groningen

  • Research assistant in econometrics, July - August 2022

Teaching Experience

  • Fundamental Finance

    First-year bachelor course, basic corporate finace and asset pricing

    U. Amsterdam

  • Corporate Finance

    Second-year bachelor course for Economics and Business Economics

    U. Amsterdam

  • Multivariate Calculus

    First-year bachelor course for Econometrics ans Operations Research

    U. Groningen

  • Actuarial Science

    Two second-year bachelor courses, covering insurance and risk management.

    U. Groningen

Thesis Supervision

I am actively looking to supervise ambitious bachelor and master students interested in research and/or learning more about one of the listed topics.

I have supervised 9 bachelor students and they all claim to have learnt a lot (hopefully not just out of politeness!). And I enjoyed it a lot as well! Please don’t hesitate to contact me for a coffee or online call if you are interested.

  • Suggested reading:

    Hall, B. H., & Lerner, J. (2010). The financing of R&D and innovation. InHandbook of the Economics of Innovation.

    Acs, Z., Åstebro, T., Audretsch, D., & Robinson, D. T. (2016). Public policy to promote entrepreneurship: a call to arms. Small Business Economics.

    Gompers, P. A., Gornall, W., Kaplan, S. N., & Strebulaev, I. A. (2020). How do venture capitalists make decisions? Journal of Financial Economics

    Cunningham, C., Ederer, F., & Ma, S. (2021). Killer acquisitions. Journal of Political Economy

    Ewens, M., Nanda, R., & Rhodes-Kropf, M. (2018). Cost of experimentation and the evolution of venture capital. Journal of Financial Economics

    Botelho, T. L., Fehder, D., & Hochberg, Y. (2021). Innovation-driven entrepreneurship. National Bureau of Economic Research.

  • Brad M. Barber, Adair Morse, and Ayako Yasuda (2021). Impact investing. Journal of Financial Economics

    Shawn Cole, Leslie Jeng, Josh Lerner, Natalia Rigol, and Benjamin N. Roth (2023). What do impact investors do differently? National Bureau of Economic Research.

    Jeffers, J., Lyu, T., & Posenau, K. (2023). The risk and return of impact investing funds. SSRN Electronic Journal.

    Ye Zhang (2021). Impact investing and venture capital industry: Experimental evidence. SSRN Electronic Journal.

  • Suggested reading:

    Hellmann, T., & Puri, M. (2002). Venture capital and the professionalization of start‐up firms: Empirical evidence. The Journal of Finance

    Kaplan, S. N., & Schoar, A. (2005). Private equity performance: Returns, persistence, and capital flows. The Journal of Finance

    Kaplan, S. N., & Strömberg, P. (2009). Leveraged buyouts and private equity. Journal of Economic Perspectives

    Davis, S. J., Haltiwanger, J., Handley, K., Jarmin, R., Lerner, J., & Miranda, J (2014). Private equity, jobs, and productivity. American Economic Review

    Bernstein, S., Giroud, X., & Townsend, R. R. (2016). The impact of venture capital monitoring. The Journal of Finance

Supervisors

  • Prof. Aleksandar Andonov

    Supervisor, Chair

    Link

  • Prof. Enrico Perotti

    Supervisor

    Link

  • Prof. Paul Smeets

    Supervisor

    Link