Corporate stakeholders have long assessed companies based on indicators of financial performance. Recently, however, “softer” indicators have been added to these assessments, under the rubric of corporate social responsibility (CSR) . Today, CSR significantly influences depositors’ assessments of banks’ trustworthiness, according to HKUST’s Mingyi Hung and ... Read More

In the last decade, reforms have been implemented worldwide to improve gender diversity in corporate boardrooms. “Boardroom diversity is a key social performance issue, and boardroom reforms represent major social and governance policy initiatives,” say HKUST’s Mingyi Hung and Emily Jing Wang, working with colleagues. Their forward-thinking study sheds light ... Read More

Recent decades have seen extraordinary growth in cross-border debt financing as financial systems become more globally integrated and companies take advantage of foreign markets to share risk, increase liquidity, and obtain cheaper capital. In the first study to comprehensively identify corporate rating patterns for a broad set of international firms, HKUST ... Read More

“Fair value” is a gold standard in valuation, but there is no consensus on its usefulness in other areas, such as evaluating management performance. HKUST’s Mingyi Hung and her colleagues settle this dispute in important new work, contending that fair value accounting may actually be unhelpful when it comes to contracting. This finding is particularly ... Read More

Debt covenants are an important monitoring mechanism that govern cash-flow rights and control rights between borrowers and lenders. Although it is believed that enforcement and property rights are primary determinants of a firm’s ability to write comprehensive contracts, there is currently little evidence supporting if or how these legal institutions affect ... Read More

We examine the impact of corporate board reforms on firm value in 41 countries. Using a difference-in-differences design, we find that board reforms increase firm value. Reforms involving board and audit committee independence, but not reforms involving separation of chairman and CEO positions, drive the valuation increases. In addition, while comply-or ... Read More

Political connections have been associated with various benefits to firms and shareholders around the world – from better access to banking finance, to lower tax barriers, to lax regulatory enforcement, to receipt of government contracts and support. But how do these connections affect a firm’s willingness to voluntarily disclose information? That question ... Read More

A study on the mandatory reporting of corporate social responsibility (CSR) activities in China has found that companies’ profitability declined after the rule came into effect, but so did pollution, providing a benefit to society. The study by Yi-Chun Chen, Mingyi Hung and Yongxiang Wang focused on a requirement introduced in 2008 for the Shanghai Stock ... Read More

The past 20 years has seen a marked global increase in the amount of corporate board reforms aimed at increasing firm value. It is believed that with greater outside representation on the board, insiders – such as top executives and shareholders – will be discouraged from reaping private rewards, and instead will encourage investment in projects that benefit ... Read More

A one-off event provided HKUST researchers with an unparalleled opportunity to investigate a “hot topic” related to stock markets: post-earnings announcement drift, or PEAD. It is defined as a significantly positive relation between currently announced earnings “surprises” (when results are above or below expectations) and subsequent stock returns. What ... Read More