Finance Faculty Research

A Mason professor finds yet another example of the value of diversity in senior management teams.

Analysts and top executives are usually not on the same page –or even reading the same book.

A George Mason University professor is working on ways to measure one of the great intangibles of today’s companies: employee talent.

For most drivers in the U.S., obeying a stop sign upon approaching an intersection is an unavoidable annoyance. But for Mason finance professor Jiasun Li, it’s a problem waiting to be solved. His recent working paper proposes a simple and economical improvement: removing one stop sign from every four-way intersection. According to his calculations, this would boost not only driver safety, but environmental sustainability as well. 

Corporate social responsibility (CSR) has been on the business leadership agenda for more than 50 years, yet executives and corporate boards still demand to see the "business case" for CSR. Clearly, CSR’s familiarity as a concept has not translated into coherent ideas of where it fits into the cost-benefit calculations that motivate business strategy. A forthcoming article in the Journal of Financial and Quantitative Analysis by Lei Gao, associate professor of finance at George Mason University School of Business, Jie (Jack) He (of University of Georgia) and Juan (Julie) Wu (of University of Nebraska – Lincoln) goes beyond the business case to form cause-and-effect connections involving companies’ CSR efforts.

Exceptions may prove the rule, but they must first be explained. That is why finance researchers are drawn to the distress anomaly-- a well-documented phenomenon that challenges the risk-return paradigm in equity markets. Generally, higher-risk investments are expected to yield higher returns than safer, more stable securities. In recent years, however, studies have shown that high-credit-risk securities for companies in distress – i.e. when their already-low credit rating is being downgraded -- realize abnormally low returns compared to non-distressed securities of the same or lower risk.  Academics have proposed a range of rationales for this puzzle. Alexander Philipov, finance area chair and associate professor at George Mason University, says they mainly fall into two categories. 

According to a recent working paper co-authored by Mason finance professors Lei Gao and Bo Hu, more than 80 percent of U.S. public firms use graphics in their annual reports. Further, visual presentation has market benefits as well as aesthetic ones.

The combination of two unlikely bedfellows—cryptography, a subfield of computer science, and currency, a topic in economics—is at the heart of the transformative potential of its underlying blockchain technology. But the uniqueness of the pairing can make it very difficult for research professionals in either field to predict, let alone positively influence, blockchain’s future development. Jiasun Li, an assistant professor of finance at Mason, is among an elite group of academics who are bridging the divide by merging relevant concepts from computer science with game theory—a subfield of economics that studies the interactions of decisions made by interdependent economic actors.

Lin Sun, an assistant professor of finance at the George Mason University School of Business, has uncovered that even top investors share a very human weakness– their professional acumen can be thrown off by inclement weather.

New research by Serdar Aldatmaz, assistant professor of finance, benefits organizations that are seeking to move operations overseas.