Topic: On the Motives of Corporate Hedging: New Evidence from an Information Perspective
Speaker: Joe Hong Zou, University of Hong Kong
Time: Wednesday, 20 May, 10:00-11:30 Beijing Time
Location: Microsoft Teams Online conference room
We revisit the unsettled research question of how information asymmetry affects corporate derivatives hedging. Exploiting brokerage firm mergers and closures as plausibly exogenous shocks and using hand-collected hedging data over the period 1995-2011 in the U.S., we find that treatment firms that are affected by such mergers and closures and thereby lose analyst coverage reduce the extent of derivatives hedging, particularly in firms that are subject to higher information asymmetry, more financially constrained and simultaneously face more growth opportunities, or whose CEOs have lower quality than sample median before the loss of the analyst coverage. Our results provide new evidence on the complex relationship between information asymmetry and corporate hedging.
Joe Hong Zou is a Professor of Finance at University of Hong Kong. He graduated in Statistics from Fudan University, completed a Master degree in insurance & accounting with distinction (sponsored by UK insurer Aviva) and received a PhD in Finance from University of Wales (UK). He had six-year industry experience (four years in a local government and two years in an investment bank) and qualified the CPA and investment analyst exam. He previously taught at Cardiff University (UK) and City University of Hong Kong, and received a Faculty of Business and Economics MBA teaching award in 2017/2018 in the University of Hong Kong. He was ranked as one of the HKU Scholars in the Top 1% based on Thomson Clarivate Analytics' Essential Science Indicators in the 10-year period (2008-2018) (http://hub.hku.hk/local/top1pc/top1pc.jsp?year=2018).
His research interests include corporate finance, corporate governance, risk management, financial services, and the Chinese financial market. He published 31 peer-reviewed journal articles in English and his research works appear in top finance journals (Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Financial and Quantitative Analysis), top accounting journals (e.g., Journal of Accounting and Economics), top international business journals (e.g., Journal of International and Business Studies), and top insurance journals (e.g., Journal of Risk and Insurance). He won 7 international research awards (including the 2002 & 2003 Shin Insurance Research Awards at New York-based International Insurance Society (IIS), the 2012 Patrick Brockett and Arnold Shapiro research award given by the American Risk and Insurance Association (ARIA), the 2012 China International Conference in Finance (CICF) best paper award). He also published 17 journal articles in Chinese (e.g., Economic Research). He is ranked in the top 10% of Authors on SSRN by all-time downloads. His research works are featured in the Handbook of Insurance, the CFA Digest, the Harvard Law School Forum on Corporate Governance and Financial Regulation, and an industry-practitioner-oriented textbook.
He once gave a lecture in the Lloyd’s of London, and received media interviews (e.g., Reactions, Forbes, Bloomberg). He was a finance paper examiner of the professional qualification exams at the Hong Kong Institute of Bankers (HKIB) and Hong Kong Institute of Chartered Secretaries (HKICS). He is a research fellow at the Center of China Insurance and Social Security Research, and is an associate editor for British Accounting Review - a flagship journal of the British Accounting and Finance Association, an associate editor for Journal of Insurance Issues – the official journal of Western Risk and Insurance Association in the U.S., and is on the editorial board of China Journal of Accounting Studies. He was also on the editorial board of Frontiers of Business Research in China (published by Springer) between 2010 and 2016.
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