Latest Research Publications
In the Media
We use staggered share repurchases legalization from 1985 to 2010 across the world to examine its impact on corporate behaviors. We find that share-repurchasing firms do not cut dividends as a substitution. The cash for repurchasing shares comes more from internal cash than external debt issuance, leading to reductions in capital expenditures and R&D expenses. While this strategy boosts stock prices, it results in lower long-run Tobin's Q, profitability, growth, and innovation, accompanied by lower insider ownership. Tax benefits and paying out temporary earnings are two primary reasons that firms repurchase.
Journal of Financial Economics
When Does Guanxi Hurt Interfirm Cooperation? The Moderating Effects of Institutional Development and IT Infrastructure Capability
Relying on the resource-based view, this study tests the moderating effects of the region’s institutional development and the firm’s IT (information technology) infrastructure capability, and examine how and when interpersonal and government-firm (GF) guanxi influence the distributor’s opportunism and cooperative performance. Using both survey data from 550 industrial manufacturers and secondary data, the study shows that both types of guanxi can mitigate the distributor’s opportunism and facilitate cooperative performance. However, the region’s institutional development strengthens the effects of interpersonal guanxi while weakening the effects of GF guanxi, and the firm’s IT infrastructure capability weakens the effects of interpersonal guanxi while strengthening the effects of GF guanxi. These findings enrich both the literature on guanxi in the emerging economy by distinguishing two types of guanxi and RBV by testing the moderating effects of institutional development and IT infrastructure capability. Theoretical and practical implications are discussed.
Journal of Business Research
What capital allocation role can China’s stock market play? Counter to perception, stock prices in China have become as informative about future profits as they are in the US. This rise in stock price informativeness has coincided with an increase in investment efficiency among privately owned firms, suggesting the market is aggregating information and providing useful signals to managers. However, price informativeness and investment efficiency for state-owned enterprises fell below that of privately owned firms after the postcrisis stimulus, perhaps reflecting unpredictable subsidies and state-directed investment policy. Finally, evidence from realized returns suggests Chinese firms face a higher cost of equity capital than US firms.
Journal of Financial Economics
Dr Sangwoon Park’s study takes a scientific look at what makes friendships at work tick and how these friendships affect productivity in the workplace. His findings reveal that worker productivity declines when friends socialize at work, but that, surprisingly, people are also willing to “pay” almost 5% of their wages to work near a friend – suggesting that friends who work together get more out of their jobs than just money.
Dr Michael Chau’s study uses the machine learning and rule-based classification components of artificial intelligence to find people online who are in emotional distress. Using these techniques may help health professionals locate struggling individuals faster, getting help to them before it’s too late.
Innovation and Information Management
A “Time Travel” – Discover the Link Between Ancient China’s Civil Examination And modern Economic Development
HKU Business School Professor James K.S. Kung has recently won the Royal Economic Society Prize for the best article published in The Economic Journal in 2020. His paper, “Long Live Keju! The Persistent Effects of China's Civil Examination System”, co-authored with Dr. Chicheng Ma and Dr. Ting Chen, examines the long-term consequences of China’s millennium-long civil examination system for human capital or educational outcomes.
20 Apr 2021
On Thursday, January 21, the online dialogue between Mr. Stephen A. Schwarzman, Chairman, CEO and Co-founder of Blackstone, and Professor Hongbin Cai, Dean of HKU Business School, attracted over 500 attendees from around the world. As an event kicking off the School’s 20th Anniversary celebration, the dialogue between two masterminds perfectly aligns with the School’s commitment to engaging globally impactful academic and business leaders in cultivating thought leadership and inspiring our young leaders. During the event, the two speakers discussed insightful topics ranging from management skills to global economic prospects.
1 Feb 2021
5 May 2021
Wine and wheat. Lobsters and logs. Beef and barley. If Australia exports it, China has likely put up barriers to entry over the past year, as diplomatic relations between the two countries rapidly deteriorated. Now, one commodity is almost single-handedly keeping the trade relationship afloat: iron ore.
6 May 2021