My Research
*********** WORKING PAPERS **************
"Alliance Partner Choice and CEO’s Facial Structure" (with Choi, Kang, Kang; 2023)
"Gender Difference in Media Appearances and Their Outcomes among CEOs" (with Gokce Basbug)
Presented at ILERA Global Congress 2018 in Seoul, Korea 2018
It's about...: Using the transcripts of 7,000 CEO interviews on CNBC, we investigate whether male and female CEOs differ with regard to self-attribution bias.
"Predicting North Korean Aggression Using Foreign Short Sales and Media Tone"(with Min Jung KANG, Doug KIM, & Hosung JUNG) - Outstanding External Collaboration Award by Bank of Korea, 2014 (한국은행 우수 조사연구용역 상 수상) Presented at FMA 2017, Boston.
It's about...: We use North Korea as an exogenous shock to the level of geopolitical risk of South Korea, because the former transitioned from a state without nuke/ICBM to a state with ones over the last decade. A permanent -1.59% CAR in Korean market and -0.88% CAR in the US market are reported when NK tests the weapons, but only short run overreaction is found for NK military aggressions. We detect abnormal short sales coming from the foreign institutions of the countries having diplomatic relations with NK (especially the UK) before the surprise attacks and nuke testing (but not for the ones from the countries without), which suggests geopolitical insider trading.
**Media coverage of this paper:
* The Washington Post [Monkey Cage blog] 2/12/2016
*HubPost (L. Souders): 11/6/2014
Presented at Seoul National University, SKKU, Korea University, Hong Kong City University, Hong Kong Polytech, KAIST, NTU, AECF (Asian Economic Community Forum, Incheon, Korea, 9/20/2014).
"Stock Market Liquidity and short-termism Driven CEO Turnover" (with Min Jung KANG) - R&R at JBFA
It's about...: Whether better liquidity of the stock market drives the company to be more or less myopic really depends on what kind of institutional investors have large ownership of the firm. We use the decimalization of the stock market in 2001 as an exogenous shock to market liquidity and find that the firms with more ownership by transient institutional investors became more myopic in terms of CEO dismissal.
"The Impact of Media on Corporate Social Responsibility" (with Jingoo KANG & Jungwon SUH) -R&R at JCF
It's about...: After receiving tremendous public criticism due in part to the provocative media portrayal of its CEO, in an article titled “Goldman’s boss: We do God’s work,” Goldman Sachs jumped up to rank #2 in terms of philanthropic contributions (PC, hereafter) in 2010. Using textual analysis of one million news articles about the largest 100 firms in the US over 2000~2010, we find that firms strengthen their CSR performance and spend more on PC when the public opinion about their CSR is negative with intensive media coverage.
Presented at Korea University, National University of Singapore, SKKU, Yonsei University, and CAFM 2013.
**Media coverage about this paper: FORTUNE Korea (August 2015)
"CEO Interviews on CNBC" (with Felix Meschke)
It's about...: Individual investors get excited about the company and buy the stock when the company gets media attention. CEO interview generates genuine excitement and attention with least new information due to the concern of fair disclosure. Efficient market hypothesis would predict no price response to such pseudo event, but we still find significant jump and reversal. The magnitude of response is a function of the viewership. Institutional investors short sell more on the days of media interviews.
Presented at the AFA (by coauthor), CICF, Singapore Finance Conference, SKKU GSB
**Media coverage about this paper
********* PUBLICATION *************
The Voice of Risk: Wall Street CEOs’ Vocal Masculinity and the Financial Crisis in 2008 (with Min Jung KANG, Sijia CAO, and Soohyun PARK), forthcoming at Asia-Pacific Journal of Financial Studies
Media coverage:
PBS TV (Nationwide US public TV) – Making Sen$e by Paul Solman
Presented at Nanyang Business School in Singapore, Deakin University, Asian FA 2018 at Tokyo, KAIST, Seoul National University, Seoul Quant Conference 2017, the University of Michigan – Flint
CEO Facial Masculinity, Fraud, and ESG: Evidence from South Korea
(with Junho PARK and Hojong SHIN) 2022, Emerging Markets Review, 53, 100917.
It's about ... Even in Korean/Asian setting, facial masculinity of the CEOs have significant predictive power to predict corporate fraud. Still, firms with better ESG performance seem to be better in harnessing aggressive risk seeking behavior of the CEOs.
"Bankers on the Board and CEO Turnover"
(with Jen CHANG and Min Jung KANG) forthcoming at Asia-Pacific Journal of Financial Studies
Best Paper Award: Asian-Pacific Conference on International Accounting Issues 2018
Presented at Asian-Pacific Conference on International Accounting Issues, San Francisco, November 2018; the Joint Accounting Workshop of SKKU & National Taipei University, May 2018 - by Jen CHANG.
It's about...:When commercial bankers sit on the board as independent directors of borrowing firms, they fire the CEOs more sensitively to firm risk, and subsequently the firm risk decreases. It supports "conflict of interest" hypothesis.
"Do Bankers on the Board Reduce Crash Risk?" (with Min Jung KANG & Qunfeng LIAO), forthcoming at European Financial Management, 2019
It's about...: When commercial bankers sit on the board as independent directors of borrowing firms, they reduce stock price crash risk, especially when the borrowing firm's credit risk is high. It supports "financial expertise" hypothesis.
The Face of Risk: CEO Facial Masculinity and Firm Risk (with Shinichi Kamiya & Soohyun Park), European Financial Management, 2019
PBS TV interview by Paul Solman: 인터뷰 한글번역
Presented at the AFA2017 Chicago Meeting, 2017 SFM Taiwan Conference, the University of Edinburgh, Cambridge University, the Asian FMA 2015, Seoul, Korean Finance Association Meeting 2015, KAIST, Seoul National University, and UNIST,
Winner of the Best paper award (2nd highest) at SFM Taiwan Conference 2017, Korean Finance Association Meeting 2015
It's about...: Just how much does the masculinity of the CEO affect the risk of the firm? Using facial width-to-height ratio (fWHR), a solid proxy for masculinity that is known to be associated with aggressive risk seeking behavior, we find that masculine faced CEOs (1) increase firm risk[stock return volatility & idiosyncratic vol]; (2) maintain high leverage ratio; (3) are more acquisitive [more # of deals, $$$ on deals, acquisition premium and lower acquisition announcement return]; and (4) receive high VEGA compensation. We find robust results using AI measured fWHR. FinTech implication: banks could improve measuring the risk preference of retail customers by using scanned photo IDs.
Version with Online Appendix
Python coding of (measuring fWHR) available upon request - Please cite us!!!
"The Relationship between CEO Media Appearance and Compensation"(with Jingoo KANG) at Organization Science, 2017, Vol.28, 379-394.
It's about...: Media increases the visibility in the labor market, which in turn increases your bargaining power against your employer, so it increases your compensation. The effect is stronger when the firm is less visible, performance is good, and CEO ownership is low (not a founder). We use CEO interviews on CNBC and news article coverage of the CEOs as our measure of media visibility, and find significant subsequent increase in pay. One percentage point increase in news article coverage about the CEO results in 0.2% increase in total compensation.
As in Korean song: "테레비전에 내가 나왔으면 정말 좋겠네~ 정말 좋겠네~"
Presented at INSEAD (by coauthor), and the AOM 2016 Conference (Candidate for Best Paper Award: Printed at the AOM Proceedings).
Media coverage: The Wall Street Journal, PHYS.ORG, Korea Times, 동아일보
"Can Big Data Predict the Behavior of North Korea?" (with Hyoung-Goo Kang and Jong-Kyu Lee) -forthcoming at Defence and Peace Economics
It's about...: North Korea (DPRK) has been a black box and primary source of geopolitical risk of East Asia. We test if the tone of the news articles about DPRK has predictive power about their forthcoming aggressive actions. Findings: the tone of English news articles published by UK media has significant predictive power. In contrast, we do not find predictive power of the tone of South Korean news media and social media (Twitter). Plus, DPRK is more likely to do military aggression on the birthdays of 'Dear Leaders.'
Presented at AECF (Asian Economic Community Forum, Incheon, Korea, 9/20/2014). Summary file is downloadable far below in this page.
Please email us if you would like to share the positive/negative English word lists that we modified based on Harvard IV dictionary to study North Korea. Please cite our paper in your research.
**Media coverage of this paper:
* The Washington Post [Monkey Cage blog] 2/12/2016
* Donga Business Review 1/14/2015
"Bankers on the Board and CEO Incentives" (with Min Jung KANG) - European Financial Management, 2017, Vol. 23, 292-324. Presented at European FMA (Basel, Switzerland, June, 2016) and Asian FMA (Bangkok, Thailand, June 2016) presented at SKKU-Peking University Forum 2015, Korean Securities Association; Seoul; Korea University; Seoul National University
It's about...: When commercial bankers sit as independent directors to enhance financial expertise of the board, there is a concern of conflict of interests between debt holders and equity holders. We find that firms with banker directors decrease the VEGA of CEO compensation, especially when they serve as members of compensation committee, and they provide more debt-like compensation to the CEO.
"Investor PSY-chology surrounding 'Gangnam Style'" (with Hosung JUNG) - Pacific Basin Finance Journal, 2016, Vol. 37, 23-34. Presented at the American Economic Association 2015, Boston meeting.
It's about...: We show that uninformative media attention can sometimes drive the price away from fundamentals through enthusiastic individual investors' trading. The father of PSY, the rapper of "Gangnam Style", is a CEO of a semiconductor company, traded in Korea. The company experienced 800% jump in stock price after the release of the song. Our attention measure is the flash mobs.
** Media coverage about this paper:
*PBS TV interview at the AEA 2015 (Me dancing Gangnam Style with Paul Solman); Translated into Korean - Good for teaching MBA, Undergrad students
* Bloomberg TV interview at the AEA 2015 (Me dancing Gangnam Style with Brendan Greeley!); Translated into Korean - Good for teaching MBA, undergrad students.
* Wall Street Journal Blog by Kwanwoo Jun: 10/16/2013
*FOREIGN POLICY "Oppa Gangnam Bubble"
* Other media: The Star [Malaysian], Quartz, Korea Herald, 연합뉴스, 매일경제, 한국경제, 동아일보, 한국일보, 매일신문, 아주경제, 한경TV, MBN, Naver news, etoday.com, wowtv.com, nocutnews.co.kr,민중의 소리, EBN, ZD Net Korea, 전자신문, and SSTV
My favorite flash mob of Gangnam Style @Trocadero, Paris., Parody with a real baby horse, Shinchon Style
It's about...: Testing Goel & Thakor (JF08) using textual analysis of CEO interviews on CNBC.
"Good performance of the company is because of me/us. Bad performance is because of them!" This psychological tendency is called self attribution bias(SAB), and it fosters overconfidence. Behavioral economics theory predicts that shareholders need a CEO with a "Goldilocks" degree of SAB. I measure SAB by doing textual analysis of 7,000+ transcripts of CEO interviews on CNBC (1997~2006). I find inverse U shape relation between the degree of self attributing language and acquisition announcement return. Also, the CEOs with SAB are more likely to be fired and that more sensitively to firm performance under stronger governance regime (after SOX of 2002).
Presentation: Swiss Society for Financial Market Research Conference (Zurich, 2012)
**Media coverage about this paper:
You can access my papers on SSRN at: https://ssrn.com/author=439623
************ WORK IN PROGRESS *******************
Something fun!!! Coming soon!!!