Faculty Sponsor: Professor Abigail Hornstein
Live Poster Session:
Joshua Ng
I am a rising senior studying Economics and Applied Data Science. I am from Hong Kong SAR and this is my first summer working as an apprentice at the Hazel Quantitative Analysis Center. My summer research will become the foundation for my senior honors thesis in Economics next academic year.
Abstract:
My research investigates the bidirectional relationship between political risk and CEO dismissal, using corporate investment as a mediating factor (Richardson, 2006). We began by looking at extensive literature review to identify determinants of CEO turnover and the mechanisms that explain how risk influences managerial behavior of CEOs. We construct a firm-year panel master dataset by merging Compustat financial data, LSEG CEO employment data, and Hassan et al.’s (2019) firm-level political risk measure. Fuzzy matching is used to merge the Compustat and LSEG CEO data set, as company names differ across different data sources. Investment efficiency is measured following Richardson’s framework where the over or under investment can be computed through the residuals of an investment regression. We also build on Bertrand and Schoar’s (2003) managerial fixed effects framework, where we decompose risk into firm-specific and CEO-specific components. This helps us examine how risk transmits when a CEO switches to another firm.