Sheng Huang joined the Finance PhD program in 2018 and will be on the 2022/2023 job market. Sheng’s research interest is in empirical corporate finance. Specifically, his research examines both the determinants and the impacts of blockholder ownership in a firm. There is heterogeneity across blockholders in terms of their objectives when investing in a firm. Sheng focuses on the group of blockholders whose objective is to monitor the firm and engage in corporate governance.
Job market paper Blockholder and CEO Wealth-Performance Sensitivity
My job market paper examines the relation between CEO incentives provided by equity-based compensation and blockholder monitoring, which are two important measures to mitigate the agency issue. Empirically, I find that higher CEO incentives reduce blockholder ownership in a firm, and this negative relation is stronger in firms where blockholder monitoring is more likely. This provides support for the substitution effect of CEO incentives on blockholder monitoring. On the theory front, I extend the model of Admati and Pfleiderer (2009), where managerial incentives are found to also complement blockholder monitoring, and I show that the substitution effect dominates the complementary effect.
More information can be found on my website.
Haoyi (Leslie) Luo is a final year PhD candidate of Finance. Her research interests cover the mutual fund industry in both the US market and the emerging markets, securities lending, and corporate governance. Her paper, "Like A Duck to Water: Do Credit Rating Analysts Outperform in Bond Fund Management?", was awarded the best paper of the RoZetta Institute (SIRCA) Research Prize in the 34th Australasian Finance and Banking Conference 2021 and currently under revision & resubmission with Journal of Corporate Finance. She has a paper published on Accounting and Finance. Haoyi is currently studying the impact of institutional ownership on equity capital raising of corporate firms. Haoyi graduated from Renmin University of China with a bachelor’s degree and a master’s degree (both in economics). She also obtained a master’s degree in economics from Kyushu University.
Job market paper Investing while lending: Do index funds improve managerial information disclosures?
Securities lending activities have become pervasive among index funds in recent decades, yet its impact on corporate governance remains unclear. In this paper, I jointly investigate the corporate governance impact of both investing and lending activities of index funds, using a sample of the U.S. firms for 2002-2017. On the one hand, I document that securities lending deteriorates the information environment of public firms. On the other hand, index fund holdings are associated with more information transparency and less bad news hoarding by firm managers, after controlling for the opposing effects from securities lending. This finding survives a battery of robustness tests and is more pronounced in a small sample using the Russell 1000/2000 index reconstitution as a source of plausibly exogenous variation in index fund holdings. I also document a negative association between index ownership and abnormal trading activities around stock price crash weeks. My findings support the view that regardless of their pervasive securities lending engagement and passive investing strategies, index funds impose an overall favourable impact on the information environment of public firms.
Linxiang Ma is a fifth-year PhD candidate in the Department of Finance at the University of Melbourne. His research interests are empirical corporate finance, economic and financial history, and political economy. His studies seek to understand how various frictions and mechanisms shape corporate decisions and performances, ranging from politics and institutions to beliefs and behaviours.
He is on the job market for 2022/2023 and will be available for interviews at FMA (Atlanta), ASSA (New Orleans), and remotely. Access his CV
Job market paper Ruling with Ideology: Politician Beliefs and the Decision to Privatize
My job market paper shows that political ideology was critical in shaping China's privatization wave around 2000. Constructing a novel ideology measure, I document that a provincial governor with above-median communism belief privatized 2.7% fewer state-owned enterprises each year than his below-median-belief colleague. My work provides novel evidence that ideology can motivate financial decisions in authoritarian regimes and substantially impact corporate ownership structure.
For more information, please visit my personal website
Muhan Hu is a fifth-year PhD candidate in the Department of Finance at the University of Melbourne. Her research interest is empirical corporate finance with a focus on corporate innovation and technology spillovers. Her studies seek to understand corporate innovation and technology spillovers affect firms’ productivity, market value, and stock returns.
She is on the job market for 2022/2023 and will be available for interviews at FMA (Atlanta), ASSA (New Orleans), and remotely. Access her CV
Job market paper Competition and the Value of Innovation
My job market paper investigates how competition affects the economic value of innovation, the primary incentive for corporate R&D investments. I measure the economic value of innovation based on the changes in patenting firms' stock market value around patent issuance dates, following Kogan et al. (2017). The economic value of innovation is higher in industries with a low level of competition. Within an industry, firms at the technological frontier or those that have relatively high pricing power enjoy higher economic returns from patents. I use a quasi-natural experimental design to compare the value of patents issued immediately before and after competition-altering events. Using horizontal M&A announcements as anti-competitive events, I show that an expected decrease in market competition leads to an increase in patent value.