Spring 2019 Newsletter

                              Issue 2

The countdown to the end of another academic year has begun and I thought we would sneak in this newsletter before we celebrate the commencement of our new graduates of 2019. In this newsletter, you will learn about some of the exciting research accomplishments of our finance faculty. Kathleen Hanley, our Bolton-Perella Chair, has developed a sophisticated method employing analysis of language in financial disclosures to detect risks in the financial sector. Jesus Salas examines the impact of CEO skills on firm value. Qianqian Yu investigates the role of management influencing innovation in firms, and Haibei Zhao examines the relationship between investor protections and capital fragility. The distinguishing mark of these disparate research topics is that they investigate issues of practical importance to the financial arena. I am sure you will benefit from reading more about these interesting research projects. Our curriculum capitalizes on this research and consequently, our students benefit from exposure to cutting edge developments.
On the topic of new developments, in the spirit of collaboration across disciplinary boundaries which is quite unique to Lehigh University, the department is proud to partner with the Business Information Systems area to offer a new FinTech minor to our students. The area of FinTech is a huge growth area and this minor will position our students to better tackle the new boundaries of finance.
While I am proud to share the news about our finance faculty and the new FinTech minor, I also take tremendous delight in presenting to you some of our students in this newsletter. After you read about them, I am absolutely positive that you will agree that Lehigh finance students are special 
– and at the Lehigh Commencement ceremonies coming up on May 20th, we will be celebrating the graduation of another cohort of these individuals. We know that they will make us proud. 
Go Lehigh Finance! 

Nandu Nayar
Professor of Finance
Hans Julius Bär Endowed Chair

Research News

Prof. Kathleen Weiss Hanley

Is it possible to predict the build-up of emerging risk in the financial system and bank-specific exposures in a timely fashion? In their paper, "Dynamic Interpretation of Emerging Risks in the Financial Sector," Prof. Kathleen Hanley and Prof. Gerard Hoberg of University of Southern California, use computational linguistics to develop a dynamic, interpretable methodology that can indeed detect emerging risks in the financial sector. Their model predicts heightened risk exposures as early as mid 2005, well in advance of the 2008 financial crisis. Individual bank exposure strongly predicts returns, bank failure, and return volatility, and risks related to real estate, prepayment, and commercial paper are elevated. A rise in market instability since 2014 related to sources of funding and mergers and acquisitions is documented. Their paper has been accepted in the Review of Financial Studies. Learn more about emerging risks in the financial sector by viewing their paper here.

Research News

Prof. Jesus Salas

Are generalist CEOs more valuable than specialist CEOs? In recently published research, Prof. Jesus Salas working with Profs. André Betzer of the University of Wuppertal, Hye Seung (Grace) Lee of Fordham University, and Peter Limbach of the University of Cologne, show that generalist CEOs (CEOs who have worked in more companies and industries) are more valuable to their companies than specialist CEOs (CEOs who moved up the rank in one single company). By examining the stock price reaction to sudden executive deaths, they find that the market reacts more negatively to deaths of generalist directors than to deaths of specialists, and that firms cannot easily replace a deceased generalist CEO with another generalist CEO. Their paper, "Are Generalists Beneficial to Corporate Shareholders? Evidence from Exogenous Executive Turnovers," is available here

Research News

Prof. Qianqian Yu

Does top management human capital affect corporate innovation? In their paper titled,“Top Management Human Capital, Inventor Mobility, and Corporate Innovation,” Profs. Thomas Chemmanur of Boston College, Lei Kong of the University of Alabama, Karthik Krishnan of Northeastern University and Qianqian Yu analyze the relation between top firm management quality and corporate innovation input and output. Using panel data on top management characteristics and a management quality factor constructed based on common factor analysis on individual management quality measures, they show that top management quality is an important determinant of corporate innovation, with different individual aspects of management quality affecting innovation in younger and older firms differently. Further, firms with higher top management quality engage in more risky (“explorative”) innovation strategies. They also find that hiring more and higher quality inventors is an important channel through which higher management quality firms achieve greater innovation output. Their paper has been accepted for publication in the Journal of Financial and Quantitative Analysis. Gain insight into how corporate innovation is being affected by viewing their paper here

Research News

 Prof. Haibei Zhao

Does country-level corruption perceptions influence capital flows to the global hedge fund industry? Prof. Haibei Zhao working with Profs. George Aragon of Arizona State University and Vikram Nanda of University of Texas at Dallas, find evidence that weak investor protection amplifies investor concerns about operational risks, such as risk of fraud, poor investor protection, and weak legal enforcement associated with corrupt environments, leading to capital fragility. Specifically, investors in such environments are more prone to run-like behaviors and hastily remove their capital from funds at the earliest sign of trouble. The findings have important implications for global asset management and capital and liquidity regulations based on operational risks (e.g., Basel regulations). Their paper, "Investor Protection and Capital Fragility: Evidence from Hedge Funds Around the World" can be read here.

Student Spotlight

Gillian Gude '19

Finance and Economics
Health, Medicine, and Society

Why did you choose Lehigh?

"I chose Lehigh because I knew it would provide me with a well-rounded college experience. It has an amazing academic curriculum, a plethora of extracurriculars, social events, and a beautiful campus to call home. However, what really sold me was the way alumni spoke about Lehigh. Whenever I would connect with alumni, you could see how much they loved it, even many years or decades after they had attended the university. I wanted to go to a university that I could be proud of and boast about when I’m older too. I know that I made the right decision and will be proud of my alma mater forever, especially as I enter the last weeks of my senior year."

What are you career aspirations?

After graduation, I will start my career at Citigroup as an analyst in the Healthcare Investment Banking group. After completing my internship in the group last summer, I knew that this was where I wanted to enter the workforce to start my journey on Wall Street. I am excited to be in a fast-paced field where you are constantly learning something new. I hope to continue in a career that combines my interests in finance and the healthcare industry."

Read more about Gillian's Lehigh story and career goals. 

Student Spotlight

Max Rodenborn '19

Finance and Business Information Systems
Political Science

What was the highlight of your Lehigh experience?

"Being given the opportunity to participate in the Lehigh in Prague program the summer after my sophomore year was the highlight of my Lehigh experience. The program gave me the opportunity to intern for KPMG while living in Prague, Czech Republic. This international work experience truly broadened my horizons and challenged me. The time I spent in Prague was some of the most enjoyable of my Lehigh experience and while I was not necessarily on Lehigh’s campus, the fellow students and professors on the program created a strong sense of a Lehigh community."

Do you see yourself as part of a community that is instrumental to success now and beyond Lehigh?
"Absolutely, I have been incredibly fortunate to interact with dozens of Lehigh alumni throughout my time here and have been consistently amazed by their overall willingness and drive to support current students. Throughout my internship search, I was fortunate to connect with alumni who not only spoke with me and discussed my interests and goals, but who also actively made efforts to support my applications within their respective firms. For example, my sophomore year while I was coaching soccer in New Jersey wearing a Lehigh shirt, an alumnus approached me, asked me about my career interests and goals, and immediately agreed to support my application for an internship within his firm. I believe that it is this level of support and guidance that makes the Lehigh community so strong for both students and alumni."

Read more about Max's Lehigh story and career goals. 

Student Spotlight

Lindsay Shagrin '19

Why did you choose Lehigh?

"I chose Lehigh for two main reasons. First, I felt immediately connected to the student body when I visited in high school. The students could not have been more welcoming and enthusiastic about Lehigh, and the alumni I met had a lasting, passionate connection to the school. The second reason is the importance Lehigh places on encouraging students to be involved in activities outside of the classroom. By ending classes at 4 o’clock, I knew that the school valued a well-rounded college experience, which would allow me to pursue interests outside of my core curriculum."

What are some of your extracurricular activities, and how have they better impacted your college career?

"My most important extracurricular activities during my time at Lehigh were the Tamid Group, the Dreyfus Portfolio, and the Thompson International Portfolio. The Tamid Group allowed me to have an internship opportunity in Israel and my first introduction to real-world business experiences through consulting projects. Dreyfus and Thompson both allowed me to better understand different investing strategies and to work collaboratively with my classmates. These experiences helped me to be more successful in my classes as well as more knowledgeable in interviews."

Read more about Lindsay's Lehigh story and career goals. 

Student Spotlight

Reed Cunningham '20

Finance and Economics

How well do you think the Lehigh Business curriculum prepared you for success in getting a job or internship?
"Overall Lehigh did a remarkable job in preparing me for the investment banking recruiting process. Due to the accelerated nature of investment banking recruiting, I had only taken part of an introductory finance class (FIN 125) prior to networking calls and interviews. Even though my technical knowledge was sparse in the beginning, Lehigh provided me access to countless resources that allowed me to take my technical and industry knowledge to the level required for interviewing. Available resources such as the Vault Guide and the Bloomberg Terminals helped me study and my professors provided invaluable knowledge and experience that assisted me succeed during the competitive interview process. Finally, the challenging business school curriculum prepared me not only to answer finance related questions, but the breadth of the curriculum allowed me to answer questions that highlighted my skills outside of the finance community."

Do you see yourself as part of a community that is instrumental to success now and beyond Lehigh?
"As many Lehigh students experience and can attest, the recruiting process for jobs and internships can be quite hectic, overwhelming, and competitive. The Lehigh community along with its vast alumni network, are important keys to helping students succeed on campus, in the workplace, and beyond. Many alumni have supported me during the recruiting process, and I know that one day I will be able to provide that crucial networking opportunity and connection to the next generation of Lehigh students."

Read more about Reed's Lehigh story and career goals.

Student Spotlight

Will Pemberton '20

Political Science

What are some of your extracurricular activities, and how have they better impacted your college career?
"My formula for success throughout my Lehigh career has always been rooted in striking a balance between involvement in and outside of the classroom. Having had valuable, enriching experiences in the classroom at Lehigh, I’ve also enjoyed similar experiences outside of the classroom such as being the president of my class, a TRAC (Technology, Research, and Communication) Fellow, a desk attendant manager at Taylor Gym, chairman of the Lehigh Minority Business Alliance (LMBA), a member of the Council of Student Presidents (CSP), and a co-director of the college’s Junior Board."

How well do you think the Lehigh Business curriculum prepared you for success in getting a job or internship?
"From spending time at OneMain Financial and PriceWaterhouseCoopers over the past two summers, and being slated to spend this summer at Citigroup within Investment Banking; the Lehigh business curriculum is certainly the highlight of my resume and I never hesitated to confidently toss my resume into the mix for an internship opportunity."

Read more about Will's Lehigh story and career goals. 

Student Spotlight

Polina Riabkova '21
Real Estate

Have you found the curriculum to be flexible in allowing you to pursue diverse interests in addition to your business interests?

"Even though I have mainly focused on business-related courses, Lehigh is extremely flexible in allowing its students to pursue a diverse interest. During my study abroad trip to Shanghai, China, I was able to receive six credit hours that helped me fulfill the humanities distribution requirements. In addition, I can take courses in the College of Arts and Sciences and in the College of Engineering. Recently, I took my first ever computer science class and I absolutely loved it. I can take different courses that help me learn new skills and grow as an individual while still graduating on time."
What are some of your extracurricular activities, and how have they better impacted your college career?

"As of right now, I am heavily involved in Lehigh’s real estate program and the Goodman Center for Real Estate. I am serving as a secretary for the Real Estate Club and was recently named a Fioretti Family Scholar. I also had the opportunity to participate in the Villanova Real Estate Case Competition. This experience was very challenging yet rewarding because it combined everything I learned in and outside of the classroom. This provided me with a platform to put my knowledge into practice. I am also serving as the vice president of outreach in the Finance Club, a vice president of Dancin’ Club, and an analyst in the Investment Management Group. I believe that my involvement in different organizations helps to develop my leadership, time management, and other skills that are vital for success now and in the future."

Read more about Polina's Lehigh story and career goals. 
Finance Careers 
Corporate Finance

Do you strive to understand internal financial workings of a business? Are you a self starter who works well under pressure?
Real Estate

Do you have an entrepreneurial bent? Do you like working  independently? Are you interested in management and have good people skills?
Investment Banking

Do you have strong analytical abilities, a desire to work in M&A and valuation, and work well under pressure?
Sales & Trading (sales focused)

Do you have good people skills and are quick on your feet? Do you have a degree of persistence and a strong desire to understand capital markets?
Sales & Trading (quantitative)

Do you have good computational and computing skills coupled with a solid background in finance, economics, and accounting?
Learn More About Finance Careers
Meet the Finance Faculty
Support Lehigh Finance

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