Working Papers
Presented: 2023 AFA Poster Session, 2022 SFA, 2022 FMA, 2022 EFMA, 2022 MFS, 2022 FMCG PhD Symposium, 2022 Joint Montreal PhD Conference
Abstract: This paper identifies the industry expertise of foreign institutional investors using the industry structure of their domestic stock market as an indicator. Foreign investors are labeled as advantaged if the firm’s industry is one of their home country’s Top 3 industries in terms of market capitalization. Using firm-level data across 70 non-U.S. countries between 2000 and 2017, I show that foreign advantaged ownership has a positive and long-term effect on firm value, while remaining foreign ownership has an insignificant or negative effect. I further identify two economic mechanisms through which the industry expertise of advantaged foreign investors may increase firm value: advantaged foreign investors are better monitors and bring greater knowledge spillovers. Finally, the positive effects of advantaged foreign investors on firm value are primarily due to operating improvements rather than changes in payout policy.
Presented: 2023 Joint Montreal PhD Conference
Abstract: This paper investigates a novel mechanism through which foreign institutional investors influence corporate governance. Using U.S. firm-level data between 2001 and 2019, I examine the effect of foreign ownership diversity on board diversity. I construct multidimensional diversity measures and find that foreign ownership diversity positively affects board diversity, while domestic ownership diversity is negatively or insignificantly associated with board diversity. Furthermore, I show that firms with high board diversity have more patent counts. Overall, this paper suggests board diversity as a new economic channel through which foreign institutional investors improve firm value.
Published paper
Credit Value Adjustment with Market-implied Recovery, with Pascal François
Journal of Financial Services Research, 56 (2019): 145–166.
The Effect of CDS Trading on Product Market Competition: Evidence from 10-K Filings, with Changjie Hu and Ming Liu
Journal of Risk and Financial Management, 2023, 16(3), 207.
Working in progress
Industry Ownership Restriction and Foreign Portfolio Choice
Abstract: This paper studies the impact of industry ownership restrictions imposed by local governments on foreign portfolio allocation. Using logit regression, the results suggest less possibility of observing foreign portfolio investment when the industries are more restricted. Further analyses indicate that foreign investors overweight restricted industries when investing in emerging markets, in pursuit of diversification benefits. While investing in developed markets, especially for non-US markets, the information cost is more important than the diversification motive for investors' foreign portfolio choice.