Research

Working Papers

1. “Learning through the Natural Disasters”

Abstract: This paper examines whether financial analysts learn and benefit from covering firms affected by devastating natural disasters. Evidence suggests that analysts are incentivized to learn about the disaster firms (i.e. firms located in a disaster zone) promptly after the natural disasters. I document the spillover effect of learning: analysts who issue forecasts for disaster firms improve in their relative forecast accuracy for the other portfolio firms. The spillover effect is persistent, and is more pronounced for the informationally-connected firms. Analysts who learn through the disaster events--especially the fast learner-- advance in their industry rankings, earn credibility in the capital market, and get a better prospect in the labor market. The aggregate learning of analysts injects greater information content to firms they follow. Collectively, these results indicate that analysts learn through time of natural disasters and their learning benefits their own research outputs, as well as the information environment of the firms under-covered.

Presented at: CUHK Brown Bag Seminar; Vietnam International Conference in Finance, 2018; FMA Doctoral Student Consortium--Job Market Paper Presentations, 2018; 32nd AFBC Australian Finance and Banking Conference 2019 (Scheduled)

2. “Inventors' Turnover and Firm Value” (with Darwin Choi and Sudipto Dasgupta)

Abstract: We study the relationship between the turnover of a class of highly specialized labor and firm value. We find that the difference in productivity between inventors who join and those who leave a firm, measured by their patenting activities, can positively predict stock returns in the following year. This productivity gap remains for a few years after inventors switch employers, and companies that hire more productive inventors also increase other related investments, such as capital expenditure and research and development (R&D) expenditure. Our results suggest that employers who hire higher-quality inventors are able to better identify these workers or provide more effective research environment, which is not completely observable by the market at the time of inventors' turnover and is associated with higher future firm value. These employers tend to explore different technologies rather than refining existing ones.