RESEARCH 

Overview: I am passionate about doing research and aim to publish in high-quality peer-review journals. My research primarily focuses on the relation between competition and corporate finance. Specifically, I study how rival’s characteristics and competitive choices affect a firm’s financial policies and other outcomes. While a copious body of literature has been dedicated to the topic, the multi-dimensional and dynamic nature of competition calls for further investigation. 

Publications

"Competition, Peer Firm Effects, and Cash Composition", with Megan Ramsey (2024)

• Published at the Journal of Banking and Finance (ABDC: A*)

• Conference Presentation: SWFA 2023, SFS 2021, SFA 2020 

• Abstract: We show competition influences the composition of corporate cash holdings. Using a sample of U.S. publicly traded firms between 1980 and 2017, we estimate the impact of competition on cash composition. We use fluidity as a proxy for product market competition and exploit an exogenous shock to competition following a reduction in industry import tariff rates. When the threat of competition increases, we find firms increase their short-term investments. We explore possible explanations for this firm behavior. We rule out a valuation explanation since the market’s valuation of short-term investments is lower than that of cash when competition increases. Instead, we show peer effects influence firm cash composition. We identify a causal relationship between rival cash and short-term investments and firm cash and short-term investments and show that mimicking of rival cash holdings is concentrated in short-term investments. When competition increases, we find firms reduce cash mimicking but do not change their mimicking of short-term investments. 

“Military CEOs, Firm Dividends and Cash Holdings”, with Megan Ramsey and Zhe Li (2023)

• Published at the International Journal of Managerial Finance (ABDC: A)

• Abstract: The purpose of this study is to examine the relationships between CEOs with military service and firm dividend and cash holding decisions. We use a sample of S&P 1500 firms in the U.S. over a sample period from 1999 to 2017 and a panel data approach. The models control for firm characteristics as well as industry and year-fixed effects. The results show CEOs with military service are associated with higher total payout and less cash. Higher dividends appear to drive the total payout result. When we split cash holdings into pure cash and short-term investments, the reduction in cash holdings is driven by a reduction in pure cash. The findings are more pronounced for powerful CEOs and CEOs with low labor mobility. Military CEOs are also associated with less risk, measured by stock return volatility and ROA volatility. Overall, the results are consistent with military CEOs implementing conservative policies that reduce firm risk, curtailing the demand for precautionary cash and reducing the necessity to forego dividend payouts.

Working Papers

"Rivals’ Cash Holdings and Corporate Innovation", with Julian Atanassov

• Under Review at the Journal of Financial Economics (ABDC: A*)

• Conference Presentation: EFMA 2022, FMA Europe 2021, FMARC 2021, FMA 2020, SFA 2020, FMA 2019 Doctoral Student Consortium

• Abstract: We examine the effect of rivals’ cash holdings on corporate innovation. To establish causality, we employ an instrumental variable approach and use the American Jobs Creation Act as an exogenous shock to rivals’ cash holdings. We find that when rivals hoard more cash, firms apply for significantly more patents, but generate fewer citations. Further analyses reveal the motivation for this phenomenon: firms strategically accelerate their patenting activity to (1) secure crucial competitive advantages which enhance product market performance and firm value and (2) avoid intellectual property loss due to talent poaching and proprietary information expropriation from cash-rich rivals. This paper contributes to the understudied literature about the competitive effect of cash holdings and shows evidence of a strategic use of innovation.

"Labor Mobility Risk and Payout Policy: Evidence from Non-compete Agreements Enforcement"

• Under Review at the Journal of Banking and Finance (ABDC: A*)

• Conference Presentation: FMA 2019, FMA 2019 Doctoral Student Consortium, SFA 2019, VICIF 2019

• Abstract: Using the Non-compete Agreement (NCA) enforceability as a proxy for labor mobility, I find that lower labor mobility to rivals increases a firm’s propensity to pay dividends and dividend amounts. To establish causality, I rely on both cross-sectional and time-series variation in the state-level NCA enforceability, namely the NCA enforceability index, and three major NCA legal reforms that occurred during the period from 1992 to 2004. Additional analyses indicate that the increase in dividends is concentrated in firms that face greater ex-ante risk of human capital loss, suggesting that more stringent labor mobility regimes significantly reduce this risk, thus allowing these firms to pay more dividends. Further, I document that the increase in dividends is partially driven by an ex-post reduction in earnings uncertainty. 

"Managerial Sentiment and Corporate Investments", with Nate Nguyen and Megan Ramsey 

• Abstract: This study examines the impact of managerial sentiment on corporate investments. Using quarterly data of U.S. publicly traded firms between 2002 to 2013, we find that when managerial sentiment is more positive, firms invest and innovate more aggressively. Specifically, they increase short-term investments and spend more on capital expenditures. Further, while there is no significant change in R&D, we find that firms generate significantly more patents with substantially higher scientific and economic value in the subsequent year. This finding suggests that managerial-sentiment-induced negative stock returns found in prior research are largely due to investments other than innovation. We also show that the effect is stronger for short-term investments and capital expenditures but weaker for R&D and innovation when investor sentiment is more positive, suggesting that optimistic managers favor less risky and more tangible investments in response to the overall market's upbeat sentiment.