My research interests are in the area of corporate governance. In particular, I am interested in how corporate governance structure affects corporate decisions and the stock market.
Do anti-bribery laws reduce the cost of equity? Evidence from the U.K. Bribery Act 2010
(with Suhee Kim and William Rees)
We examine the impact of the U.K. Bribery Act 2010 on the implied cost of equity. We find a significant reduction in the cost of equity amongst U.K. firms with high bribery exposure. We further show that the Bribery Act improves internal control system and increase stock liquidity of firms with high bribery exposure. Our results suggest that more stringent anti-bribery regulations are not always bad for the firm.
Does Risk of Shareholder Litigation Affect Corporate Information Environments?
(with Nhan Le and Duc Duy Nguyen, FMA Asia Best Paper Award Finalist)
Using the staggered adoption of universal demand laws, this paper shows that the reduction in shareholder litigation risk deteriorates firms’ information environments. This reduction in transparency is due to firms changing the way they invest, rather than obfuscating or withholding firm-specific information. Further tests suggest that the reduction in litigation risk is associated with more efficient investments and a lower propensity of stock price crashes. Overall, despite causing a deterioration in firms’ information environments, the reduction in litigation risk does not appear to harm shareholder wealth. Our paper offers novel insights into the net economic benefits of shareholder litigation laws.
(with Jens Hangendorff and Duc Duy Nguyen)
We exploit the staggered adoption of same-sex marriage (SSM) legalization to examine its effect on lending practices toward same-sex borrowers. We use loan-level data from the Home Mortgage Disclosure Act between 2004-2018, a period that spans the entire rollout of SSM legalization across the United States. We find that following SSM legalization, the probability that same-sex mortgage applicants are denied credit increases compared to otherwise similar different-sex applicants. This backlash is concentrated among states in which SSM legalization is imposed by state or federal courts rather than by public votes or state legislatures. Our results present a contrasting view to a recent literature that documents a positive influence of SSM legalization on the social attitudes towards same-sex couples.
(with Nhan Le and Duc Duy Nguyen)
The number of listed firms in the US has fallen by half since the late 1990s. Our paper examines whether and to what extent the costs of shareholder litigation have contributed to this trend. Using the staggered adoption of universal demand (UD) laws, we find that the reduction in shareholder litigation risk lowers incidences of firms delisting from stock exchanges. Furthermore, the effect is concentrated among firms facing higher ex ante litigation risk. UD law adoptions also encourage new listings. Overall, our findings suggest that the pressure imposed by shareholder litigation increases the costs of listing.
(with Angelica Gonzalez and Brian Main)
This paper presents evidence that female directors can influence fellow male directors and that their influence can spillover to the male director's other directorships. When working on the same board as women, male directors who also work alongside women within their wider directorship networks are shown to have better attendance records, suggesting that they are more conscientious in their monitoring duty. Accordingly, the more male directors interact with women, the more we find higher CEO turnover sensitivity to poor performance and lower equity risk. Based on conversion theory from the psychology literature, our findings suggest that female directors can exert influence on firm-level decisions despite their minority status in the boardroom.