Research

Working Papers

The Intermediary Role of Directors in the Credit Market

This paper investigates the financial intermediary role of corporate boards through the lens of board interlocking. While the traditional literature emphasizes monitoring, advising, and assessing roles of board members, their potential to facilitate financing activities remains underexplored. Using a novel empirical setting, we examine instances where a director connects his/her firm with a lender that has an existing lending relationship with another firm on whose board she also serves. The results from lender choice models suggest that such connections significantly increase the likelihood of forming a new lending relationship between the director's firm and the lender. This effect is further pronounced (i) for firms that are entrants to the loan markets, unrated, small, or young, and (ii) during periods of credit market disruptions. Further, the results indicate that these informationally opaque firms benefit from lower loan spreads during such periods when they have these connections with lenders. Our findings point to the financial intermediary role of interlocking directors---acting as guarantor or information provider---extending beyond the conventional roles of board. 

• Presentation: Joint Conference with the Allied Korea Finance Associations (2025), APAF International Conference (2025), Sungkyunkwan University (2025), FMA (2025), Tulane University (2025), SFA (2025), MFA (2026)*, Eastern FA (2026)*

Promote Agility: Avenue to Product Market Success and Survival (Internet Appendix)

This paper investigates corporate agility, the importance of which is emphasized in both field and academic research but understudied empirically. Using the business descriptions provided in firms’ 10-K filings with the SEC as the main input, I construct a novel measure of corporate agility and confirm its validity. Next, I identify various firm flexibility measures, i.e., financial flexibility, governance flexibility, organizational flexibility, operating flexibility etc., as the determinants of corporate agility. I next find that product market performance improves with agility in the short-run and firm survival likelihood increases with agility in the long-run. I also document that the benefits of corporate agility are particularly realized when firms face industry-wide common shocks such as R&D or M&A waves, or trade barrier reductions and that firms increase agility at the expense of short-term profitability. Lastly, I find that agility is a negative predictor of future stock returns even after controlling for other firm risks and characteristics.

• Presentation: FMA (2020) Special PhD Paper Presentations and Doctoral Student Consortium, AFBC (2020), Eastern FA (2021), Hanken School of Economics (2020), Korea Institute of Public Finance (2021), Korea Institute for Industrial Economics & Trade (2021), Korea Capital Market Institute (2021), Nanjing University (2021), University of Nevada Las Vegas (2024)

Firm Innovation Outcomes and Trade Credit Financing with Jen (Jae Eun) Choi and Jeong Ho (John) Kim

Reject & Resubmit, Journal of Accounting and Economics

This paper investigates externalities of innovations along supply chains by analyzing the effects of customers’ innovations on suppliers’ trade credit provision. We find that suppliers extend more trade credit after customers innovate, and the effect is robust to controlling for various firm characteristics and industry-specific market conditions and to addressing potential endogeneity issues. The effect is mainly driven by the holdup channel as opposed to the demand channel or the financing channel, implying that customers’ innovations improve their bargaining power against suppliers. Next, we document that greater technological overlap between customers’ current innovation and suppliers’ existing innovations attenuates the positive sensitivity of suppliers’ trade credit provision to customers’ innovations. Further, we find that suppliers internalize the externalities by adopting more conservative financial policies and innovating more by learning from customers’ innovation. Lastly, the results suggest that customers’ innovations lead to the eventual termination of trade relationships. Overall, the findings point to the reestablishment effects of corporate innovation on product market relationships. 

• Presentation: AFA (2020) PhD Poster Session, Pitt-CMU-Penn State Conference (2020, cancelled), SFA (2023), Sungkyunkwan University (2024), Brazil Accounting Research Conference (2024), Eastern FA (2025), Joint Conference with the Allied Korea Finance Associations (2025), Sungkyunkwan University (2025), University of Michigan (2025), SFA (2025), CAFM (2025), SEA (2025), MFA (2026)*

Bound by the Community Norms: Local Social Capital as an Informal Constraint on Acquisitions with DuckKi Cho, Goeun Choi, and Lyungmae Choi

We study how local social capital (LSC)—shared norms, trust, and networks within communities—shapes firms’ acquisition behavior. Using county-level measures of LSC linked to firms’ headquarters, we find that firms in high-LSC regions are significantly less acquisitive. Exploiting within-firm variation from headquarters relocations, instrumental variables, and the 2017 Tax Cuts and Jobs Act as a natural experiment, we provide consistent causal evidence that LSC constrains acquisition activity. LSC also influences deal structure: acquirers in high-LSC regions avoid geographically or industry-proximate targets that may trigger antitrust scrutiny, favor socially responsible partners, and rely less on stock payments when overvalued. These frictions reduce acquisitiveness but improve shareholder value by curbing value-destroying overinvestment. Our findings highlight how community-level social preferences operate as informal yet powerful constraints on corporate decisions, with important implications for debates on corporate purpose and the welfare consequences of stakeholder orientation.

• Presentation: MFA (2023), SFA (2023), 17th California Corporate Finance Conference (2024), FMA (2024), Joint Conference with the Allied Korea Finance Associations (2025), Eastern FA (2026)*

Sovereign ESG and the Pricing of Sustainability-Linked Bonds with Heungju Park

Revise & Resubmit, Journal of International Money and Finance

SLBs are issued at lower yields than comparable conventional bonds, with a larger pricing advantage in countries with weaker sovereign ESG. It shows that this ESG-dependent pricing effect weakens after the Russia–Ukraine war and after national environmental policy rollbacks, indicating state-dependent relevance of sustainability benchmarks. Issuers in low-ESG countries also use more granular sustainability targets in SLB contracts, suggesting that contract design substitutes for weaker national sustainability institutions.  

Informal Institutions and Sustainium with Hak-Kyum Kim and Heungju Park

“Sustainium”—the price premium for SLBs relative to conventional bonds—has been documented in prior research as insignificant or at most moderate. Informal institutions of generalized trust reduces sustainium, implying that SLBs issued in high-trust countries are more costly. For example, all U.S. SLB issuers combined would have saved about \$1.1 billion in issuance costs had their bonds been issued in the lowest-trust countries. Our findings are consistent with that SLBs primarily serve as incentivizing tools. 

• Presentation: CAFM (2025), Eastern FA (2026)*

*Indicates scheduled presentation

Publication

Zero-leverage puzzle revisited: Evidence from acquisition behaviors with Hae Jin Chung

International Journal of Financial Studies, 10(3), 62

Work in Progress

Shock Propagation and Long-Term Contracting (with Sudheer Chava)

Interest Rate Swap (with Sudheer Chava and Heungju Park)

Financial Distress and Dual Ownership: Evidence from Steel Consuming Industries

Board Connectedness and Board Busyness

Spillover Effects of Corporate Fraud: Evidence from Financial Constraints of Intra- and Inter-Industry Firms