NYU Shanghai Talk

Anti-Corruption Reforms and Shareholder Valuations: Event Study Evidence from China
Date & Time: 
Thursday, September 7, 2017 - 16:30 to 18:00
15F, NYU Shanghai
Chinese share prices rose sharply on the Politburo’s December 4th 2012 announcement of its "Eight-point Regulation", an uncharacteristically detailed and concrete Party policy, initiating an extensive anti-corruption campaign and announced surprisingly soon after a change in leadership. The reaction is uniformly positive for state-owned enterprises (SOEs), but not heterogeneously across non-SOEs. The reaction is more positive for non-SOEs in provinces with more developed market institutions and with higher prior productivity, greater external financing dependence, and greater growth potential. A non-SOE’s prior spending on entertainment and travel costs (ETC), a proxy for investment in “connections”, correlates negatively with the share price changes of firms based in provinces with weak market institutions. In this talk, Professor Bernard Yeung will posit that limiting corruption cuts the valuations of these non-SOEs by limiting their ability to utilize “connections” where these are more important. SOEs are well-connected in any case, and their ETC may reflect their top insiders’ perks consumption or self-dealing. Reforms that limit this boost SOEs’ valuations. Overall, these results are consistent with investors expecting the reforms to be meaningful and limiting corruption to be more valuable if prior reforms have strengthened market forces.

Professor Bernard Yeung is the Dean and Stephen Riady Distinguished Professor in Finance and Strategic Management and President of the Asia Bureau of Finance and Economic Research at National University of Singapore (NUS) Business School. Before joining NUS in June 2008, he was the Abraham Krasnoff Professor in Global Business, Economics, and Management at New York University (NYU) Stern School of Business. He has also served as the Director of the NYU China House, the honorary co-chair of the Strategy Department of the Peking University Guanghua School of Management. From 1988 to 1999, he taught at the University of Michigan and at the University of Alberta from 1983 to 1988.

Professor Yeung has published widely in academic journals covering topics in Finance, Economics, and Strategy; his writing also appears in top-tier media publications such as The Financial Times and The Wall Street Journal.

He has also won several scholarly honours and awards for academic excellence, including the Irwin Outstanding Educator Award (2013) from the Business Policy and Strategy (BPS) division of the Academy of Management and Teaching Excellence Awards in NYU’s Stern School of Business and University of Michigan’s Ross School of Business. He is an election Fellow of the Academy of International Business.

Professor Yeung is a member of the Social Science Research Council (SSRC) in Singapore. He was a member of the Economic Strategies Committee in Singapore (2009) and also a member of the Financial Research Council of the Monetary Authority of Singapore (2010 -2013).

Professor Yeung sits on the 3rd Advisory Board of the Antai College of Economics and Management at Shanghai Jiao Tong University, the Research Advisory Council of the Centre for Advanced Financial Research and Learning (CAFRAL), Reserve Bank of India, the Advisory Council of the Economics and Management School of Wuhan University, and an independent Non-executive Director of the Bank of China (BOC) Aviation Limited.

Professor Yeung received his Bachelor of Arts in Economics and Mathematics from the University of Western Ontario and his MBA and PhD degrees from the Graduate School of Business at the University of Chicago. 

The Center for Business Education and Research (CBER) is co-sponsoring this talk. Introduction and moderation of the Q&A by Dean Yuxin Chen.
Location & Details: 

This event is for NYU Shanghai community only.