My name is Sunwoo Hwang. I am thirty-three years old and married to Jineui Kim. I am the son of Kyudong Hwang and Hyunae Lee, the brother of Nari Hwang, and the father of Yewon Hwang. I am a doctoral student in finance at the University of North Carolina (UNC) at Chapel Hill’s Kenan-Flagler Business School.

My current research focuses on corporate finance and ranges from corporate governance to entrepreneurial finance. In my second year, I designed a framework that enables one to model three heterogeneous agents. The framework overcomes shortcomings of existing preference-based modeling frameworks – e.g., optimization and game theory – with which we model only up to one and two ex-ante heterogeneous agents. It is useful to design and analyze a system like governance that involves at least three key players of principal, agent, and a mechanism operator. Using the framework, I for the first time provide a scientific definition of governance, the necessary and sufficient conditions a governance mechanism must satisfy to be valid and effective, and a simple way to characterize complex interplay between governance mechanisms.

The framework and theories which build on it produce rich intuition and testable predictions, some of which I am testing empirically. One of them is to study the role of the board not as a monitor but more importantly as a controller of other governance mechanisms. Using state anti-takeover law adoption as a source of exogenous variation, I identify boards that are effective as a controller and examine their impact on corporate policies and performance. Another project exploits information revealed by the event of removing poison pills to uncover quality of a board and examine its association with various board and firm characteristics. I experiment the idea using regression discontinuity design as a type revelation mechanism and difference-in-differences estimation for causal inference of the association. I compare boards whose type is revealed against board whose type is not revealed.

Further, I plan to explore other intuitions the framework generates. One is that the emergence of shareholder activism is an equilibrium response to the restrictions on existing external governance mechanisms, which include the market for corporate control.