The University of Sydney Business School
Corporate Finance, Capital Market, Labor Economics, Networks, Household Finance
Rm 421, Codrington Building H69
The University of Sydney, NSW, 2006, Australia
Email: d.cho@sydney.edu.au / drumcdk@gmail.com
It's Not Who You Know---It's Who Knows You: Employee Social Capital and Firm Performance (with Lyungmae Choi, Michael Hertzel, and Jessie Jiaxu Wang)
Accepted for publication at Management Science (Supplemental Material)
General Research Fund from the Research Grants Council of Hong Kong (Project No. 21502018)
The Journal of Law and Economics, 2025, 68(3), 671-710 (Supplemental Material)
Best Doctoral Paper Award in Corporate Finance at the 2017 SWFA Annual Meeting
Semi-finalist for Best Paper Award in Corporate Finance at the 2017 FMA Annual Meeting
Media: Economics Blog by Marginal Revolution
Journal of Financial and Quantitative Analysis, 2023, 58(1), 29-70 (Online Appendix)
Best Paper Award in Behavioral Finance at the 2016 MFA Annual Meeting
Journal of Corporate Finance, 2024, 89, 102664-.
Best Paper Award at the 2022 Joint Conference with the Allied Korea Finance Associations
The Role of Employees as Information Intermediaries: Evidence from Their Professional Connections (with Lyungmae Choi and Stephen A. Hillegeist)
Revision Requested by The Accounting Review
Media: The FinReg Blog by Duke Financial Economics Center
Presentations: 2022 CAFM, 2023 HARC, 2023 SARAC†, 2023 XJTLU AI and Big Data in Accounting and Finance Research Conference, 2023 KAA, 2023 SSES†, 2023 MIT Asia Conference in Accounting, 2023 AAA, 2023 EEA†, 2023 SBFC, 2024 AFA, 2024 KFA-TFA Joint Conference, 2024 FMA Asia/Pacific, 2024 ESAM, KU-KAIST Accounting Seminar Series, City University of Hong Kong, Arizona State University, Peking University HSBC Business School, Sogang University
†(withdrawn due to COVID travel restriction or other reasons)
This paper investigates whether employees and their professional networks act as information intermediaries. We find that firms with more-connected employees experience smaller market reactions to earnings surprises, and these results are not due to reverse causality or information inflows. Further analyses show that employees primarily disseminate private information about positive earnings news and the firm-specific component of earnings news, and are driven largely by the connections of mid-level managers. Consistent with social networking theory, the associations are stronger for weaker professional connections. Supporting employees’ role as information intermediaries, we find that the stock prices of more-connected firms incorporate information about forthcoming earnings more quickly, have more informative retail order imbalances, and exhibit lower post-earnings announcement drift. Overall, our results suggest that more-connected firms have more efficient stock prices due to employees and their professional networks acting as information intermediaries.
Best Paper Award at the 2022 AsianFA Annual Meeting
Presentations: 2021 International Symposium on Human Capital and Labor Markets, 2022 KAFA Brown Bag Seminar, 2022 FMCG, 2022 PKU-NUS Annual International Conference on Quantitative Finance and Economics, 2022 ABFER, 2022 ITFA, 2022 AFES, 2022 AMES, 2022 AsianFA, 2022 AFAANZ, 2022 ESAM, 2022 CIRF, 2022 SIF, 2022 Corporate Finance Day, 2022 FMA, 2022 AASLE, 2022 CAFM, 2022 Boca Corporate Finance and Governance Conference, 2022 FMA Asia/Pacific, 2023 RES†, 2023 SSES, 2023 CFRC, 2023 ESEM†, 2023 SBFC, 2023 AFBC†, 2024 SES†, 2024 NASMES, 2024 EALE†, 2025 KIF-KAEA-KAFA, 2025 UNSW Corporate Finance Workshop, 2025 CICF, 2026 NAWMES (ASSA), 2026 HARC, Peking University HSBC Business School, Sogang University, The University of Sydney, The University of Newcastle
†(withdrawn due to COVID travel restriction or other reasons)
Declining worker bargaining power has been advanced as an explanation for major macroeconomic shifts in the U.S., such as declining labor share, reduced consumer purchasing power, and rising inequality. This paper explores microeconomic implications, focusing on the impact of declining worker power on firm-level investment responses to a labor cost shock arising from mandated minimum wage increases. Over four decades, we observe a shift in investment-wage sensitivities from negative to insignificant as management gains flexibility through enhanced outside options. This shift is more pronounced in firms that are more exposed to globalization, technological change, and declining unionization, reflecting broader trends in weakening worker power and its influence on corporate decision-making.
Bound by the Community Norms: Local Social Capital as an Informal Constraint on Acquisitions (with Chang Suk Bae, Goeun Choi, and Lyungmae Choi)
Presentations: 2023 MFA, 2023 SFA, 2024 FMA, 2024 California Corporate Finance Conference, 2025 Joint Conference with the Allied Korea Finance Associations
We examine how local social capital (LSC)—shared norms, trust, and networks within communities—shapes firms’ acquisition decisions. Using county-level LSC measured at headquarters, we find that firms in high-LSC regions acquire less. Exploiting within-firm variation from headquarters relocations, instrumental variables, and the 2017 Tax Cuts and Jobs Act, we provide causal evidence. High-LSC acquirers avoid targets likely to trigger antitrust scrutiny, match with socially responsible targets, and rely less on stock payments when overvalued. Our findings highlight how community preferences operate as informal constraints on corporate decisions, with implications for corporate objectives and stakeholder orientation.