Working with the large FIRN member institutions we have developed a virtual seminar series where all FIRN members can participate. 

Please click on the links to register for the seminars. Once registered you will receive an email with the zoom code the day before the seminar.

Friday 12 June, 1pm (AEST).   David Reeb, NUS
Seminar hosted by University of Queensland
Title: The CEO-Employee Pay Gap
Houning Ma and David M Reeb
Abstract: We explore the impact of minimum wage hikes on the CEO-employee wage gap. Contrary to our expectations, we find that a one-dollar raise in the minimum wage reduces the CEO-employee pay ratio by 21% in minimum wage reliant firms. This reduction stems from an 8.3% decrease in CEO wages, coupled with a 12.7% increase in median employee salary. Further tests reveal that low CEO compensation is explained by recently promoted CEOs, franchising-structure, and low managerworker ratio (low manager reliance). Moreover, the CEO-employee pay gap narrows with competition and labor-intensity. Notably, the combined wages of all employees and executives in a minimum wage firm remains unchanged after a minimum wage hike. Overall, our results indicate that minimum wage hikes lead to lower within-firm pay gaps, suggesting that firms divide a fixed-wage budget between the CEO and employees.
Moderated by: Min Zhu, UQ
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Friday 19 June, 1pm (AEST).   Ekaterina Volkova, Melb
Seminar hosted by FIRN Women
Title: Is Blockholder Diversity Detrimental?
Miriam Schwartz-Ziv and Ekaterina Volkova
Abstract: We find that block diversity, i.e., having multiple block types, is detrimental to firm performance in three settings which experience exogenous variation to (the revelation of) changes in block diversity. In the first setting, we find that the market response to an increase in block diversity revealed around an exogenously pre-determined date is negative. In the second setting we find that following an individuals’ death/ retirement leading to a decrease in block diversity, firm performance improves. The third setting focuses on the 2003-4 mutual fund scandal which led to the dissolution of blocks thereby decreasing block diversity, and was followed by an improvement of firm performance. Additionally, we show that firms held by heterogeneous blockholders consistently perform worse than firms held by homogeneous blockholders. These patterns can be explained by our findings that firms with a heterogeneous blockholder base are prone to experience disagreement: in such firms, we uniquely demonstrate that shareholders are more likely to sue the firm, and disagreement is more prevalent at shareholder meetings.
Moderated by: Jacquie Humphrey, UQ
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Friday 26 June, 10am (AEST).   Zahi Ben-David, Ohio State University
Seminar hosted by University of Queensland
Title: TBC
Moderated by: Min Zhu, UQ
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Friday 3 July, 1pm (AEST).   Zhongyan Zhu, Monash
Seminar hosted by Monash University
Title: Constrained Households, Risk Tolerance, and Fund Flows
Woon Sau Leung and Zhongyan Zhu
Abstract: Constraints are normal for typical households. We introduce a constrained household that engages a mutual fund with limited wealth to meet the household’s debt payment dues. A constrained household withdraws from an engaged mutual fund because fund returns are not enough to meet debt payment dues. An unconstrained household could keep the engagement, however, even if fund returns are low. The difference is because the unconstrained household can earmark additional wealth as a cash reserve. To test the different decisions between constrained and unconstrained households, we locate fixed income mutual funds in two risk categories. Households with a high (low) debt-to-wealth ratio have a low-risk (high-risk) tolerance. The risk tolerance of households manifests on the left half of the return distribution. When mutual funds deliver low returns, investors with low-risk tolerance withdraw, but investors with high risk tolerance could keep their engagements. Fund flows to the risky fund category are significantly larger than those to the safe fund category right after mutual funds deliver low returns. Our study reveals the financial decisions of typical households in Campbell (2006).
Moderated by: Thanh Huynh, Monash
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Friday 17 July, 1pm (AEST).   Zhaoxia Xu, UNSW
Seminar hosted by FIRN Women
Title: TBC
Moderated by: Jacquie Humphrey, UQ
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Friday 24 July, 11am (AEST).   Huu Duong, Monash
Seminar hosted by Monash University
Title: TBC
Moderated by: Thanh Huynh, Monash
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Friday 7 August, 10am (AEST).   Joan Farre-Mensa (University of Illinois)
Seminar hosted by ANU
Title: TBC
Moderated by: Nhan Le, ANU
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Friday 21 August, 1pm (AEST).   Min Zhu, UQ
Seminar hosted by FIRN Women
Title: Crowding: Evidence from Fund Managerial Structure
Campbell R. Harvey, Yan Liu, Eric K. M. Tan, Min Zhu
Abstract: Over the past 30 years, there has been a striking evolution in fund management structure with team-managed funds growing from 30% of funds to over 70% today. While much attention is focused on fund performance, our paper presents evidence that this transformation is likely a response to crowding: adding new managers brings fresh investment ideas meaning any particular idea is less likely to be crowded. Our results show that funds that transition from solo to team management have less concentrated portfolios and lower decreasing returns to scale. Consistent with the crowding of ideas, we show that diversification of team skills is important for reducing the impact of fund size on performance. We also find that the performance of managers that employ systematic investment processes are not as sensitive to inflows suggesting that discretionary managers with a limited number of ideas are more likely to run into capacity constraints.
Moderated by: Jacquie Humphrey, UQ
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Friday 28 August, 10am (AEST).   Constantine Yannelis (University of Chicago)
Seminar hosted by ANU
Title: TBC
Moderated by: Nhan Le, ANU
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Friday 18 September, 1pm (AEST).   Shushu Liao, AUT
Seminar hosted by FIRN Women
Title: The Joint Effect of Measurement Error in Q and Covariance Between Regressors on Coefficient Biases
Abstract: The effect of measurement error, which operates via the covariance between q and cash flow, plays an important part in explaining the time-series and cross-section of cash flow sensitivity. We find that the measurement error decreases investment-cash flow sensitivity in the recent decades because it biases cash flow sensitivity downward when q and cash flow are negatively covaried. The covariance structure also offers explanations for the perceived “wrong-way” differential investment-cash flow sensitivity between constrained and unconstrained firms (the perceived negative relationship between investment-cash flow sensitivity and constraints status) classified under the widely used a priori measures. Moreover, we show that even the higher-order moment-based GMM estimator cannot address the bias if the measurement error is not independent of q (a nonclassical error).
Moderated by: Jacquie Humphrey, UQ
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