I am an assistant professor of finance at the City University of Hong Kong (CityU). My research is empirical and focuses on issues in corporate governance, labor and finance, and entrepreneurship. I teach corporate finance and international finance in the undergraduate and graduate economics and finance programs at CityU. I earned my PhD from UCLA Anderson School of Management in 2017.
Director Networks, Mobility, and Governance: Evidence from Corporate Bankruptcies
We exploit a quasi-natural experiment to demonstrate the importance of professional connections in determining a firm's board composition. At the individual level, we find that directors having common work histories with other directors who have held board or executive positions at bankruptcy-filing firms experience a decline in the likelihood of finding new board positions on average by 5.6 percentage points within a year of filing. These directors themselves have not held any positions at any bankruptcy-filing firms. At the firm level, we find that having network ties affected by corporate bankruptcies not only reduces holdings of outside directorships, but also hinders board recruitment: average board proportion of new directors decreases while average director tenure increases. Firms with less mobile directors, however, show improvements in shareholder rights and monitoring.
Presented at the 2018 Sun Yat-Sen University Finance International Conference, 2018 FMA Annual Meeting, and 2018 SFS Cavalcade Asia-Pacific.
How do Passive Funds Act as Active Owners? Evidence from Mutual Fund Voting Records
with Jiasun Li and Michael Tang
Download: Available Upon Request
The rise of passive institutional investors in the U.S. stock market raises questions about the governance implications of their portfolio firms. While the existing literature documents various governance changes in response to changes in passive ownership, it remains unclear through what mechanism such changes take place. We address this question by comparing the proxy voting records of passive and active funds. We find that compared to their active peers within the same fund family, passive funds often exert corporate governance changes on portfolio firms not via how they vote for a given proxy ballot, but rather by influencing what proxy items get included on the ballot in the first place. Our results support a “behind-the-scene” intervention argument on how passive funds approach corporate governance of their portfolio firms.
Presented at the 2018 Eastern Finance Association Annual Meeting and 2018 CICF.
Profit Windfalls and Investment Channels in Innovation: Evidence from Patent Term Extensions
I show that capital expenditure, debt issuance, and patent acquisitions are sensitive to cash flow for mature innovating firms. By exploiting the random timing of patent term expiry dates and their unexpected extensions around the adoption of a provision in the Uruguay Round Agreements Act, I find that a one standard deviation increase in the citation-weighted patent portfolio share of term-extended patents leads to an increase in cash flow by 1.5 percent of book assets. Given these windfall profits, I find evidence of physical capital investment, debt issuance reduction, and acquisitions of external technology. Internal investments in R&D, on the other hand, show no response, suggesting high R&D adjustment costs for large, mature firms.
Presented at the Ninth Annual Searle Conference on Innovation Economics.