Speaker: Professor Sun Hyun Park, Seoul National University
Title: Risks Related to Doing Business in China: Country Risk Attributions of Negative Earnings Surprise by Cross-listed Firm CEOs
Date: Thursday, 20 Feb 2025
Time: 10:00am – 11:45am
Venue: Building 21, PAP Moran, G058, Seminar Room
EY Song and Lin Cui are the hosts of this visit.
Abstract:
We investigate the self-serving attributions of negative firm performance (negative earnings surprise) to country risk by the CEOs of cross-listed companies. SEC’s risk disclosure requirement, introduced to serve the host country investors’ information demand, inadvertently provided an institutional arbitrage opportunity for cross-listed company CEOs to utilize the country risk as an excuse for negative earnings surprises. The recent rise of geopolitical risk made it more likely for the CEOs to engage in this country risk attribution, which essentially decreased their dismissal likelihood. The efficacy of this unique CEO impression management tactic was significantly constrained by host country financial analysts’ stock recommendation downgrades and the presence of local directors on the board. We test our hypotheses utilizing the panel data for 430 Chinese companies listed on U.S. stock exchanges between 2010 and 2022.
Bio:
Sun Hyun Park is Professor of Strategy and International Management at the College of Business, Seoul National University. He received his Ph.D. in Corporate Strategy from Ross School of Business, University of Michigan. Prior to joining SNU, he served as Assistant Professor of Management and Organization at the Marshall School of Business, University of Southern California. Professor Park’s research focuses on how corporate managers cope with a firm’s external environment, which includes technological, institutional, and competitive dynamics. His research has been published in Administrative Science Quarterly, Organization Science, and Strategic Management Journal. He teaches topics in corporate strategy, corporate governance, and research methods both at the undergraduate and graduate levels. Professor Park is a recipient of the Academy of Management Best Paper Award (OMT, 2010) and the Strategy Research Foundation Dissertation Scholar award (2011) from the Strategic Management Society. He also served as a global representative for the Organization and Management Theory division of the Academy of Management (2017-2019), the Editorial Review Board of Administrative Science Quarterly (2022-2024), and the International Corporate Governance Society. He currently serves as an Associate Editor for Strategic Management Journal.