Sunwoo Hwang
I am an Assistant Professor of Finance at Korea University Business School (KUBS). My research interests lie in the areas of corporate finance, which include labor finance, entrepreneurial finance, and environment, social, and governance (ESG).
Email: sunwoo_hwang(at)korea.ac.kr
SSRN / Google Scholar / ResearchGate
I co-organize the K virtual finance seminar (link).
Working Papers
Labor-Management Relational Capital with Biwon Lee
Abstract: Using novel data from surveys on randomly selected establishments, which include common questions asked to employees and management about their relationship, we show labor-management relational quality has a positive impact on profitability, labor productivity, and employee retention. We measure relational quality based on the distance of numerical answers of employees from those of management. We exploit within-stratum-year variation in relational quality, which is random, to predict outcomes in the next survey year. Neither responses of employees nor those of management alone predict outcomes, implying the significance of evaluating a bilateral ESG factor based on input from both parties involved. The results are driven by the cultural dimension of relational quality, establishments that offer job training to rank-and-file employees, and establishments that belong to private firms.
Contingent Employment and Innovation
Abstract: Using novel indirect employment data and a Supreme Court ruling against subcontracted employment, I show that the contingent employment of skilled labor reduces innovation. Following the ruling, establishments with a higher reliance on subcontracted workers innovate more compared to those with a lesser reliance. This finding is conditional on compensation schemes rewarding employees for their investment in firm-specific skills and long-term performance, stems from collaborations with existing inventor employees, and does not coincide with increases in operating leverage, R&D, or capital intensity.
Featured in University of Cambridge Judge Business School's News & Insight (Link)
Mandating Women on Boards: Evidence from the United States with Anil Shivdasani and Elena Simintzi
Abstract: On September 30, 2018, California became the first U.S. state to set quotas for women directors on corporate boards. The law resulted in a decline in shareholder value for firms headquartered in California. This decline increases with the number of female directors required to be added under these quotas. We find evidence that supply-side constraints drive the announcement effects. The law expanded the supply of women in the director pool. Female directors appointed to meet the quotas are as skilled as male directors, but possess a less similar set of skills and are given fewer responsibilities on the board.
Featured in Harvard Law School's Forum on Corporate Governance and Financial Regulation (Link)
Revealed Board Non-Independence
Abstract: Decades of research on corporate boards have wrestled with the issue that board composition is endogenously determined by the CEO and a board and relays incomplete information about board independence. This paper establishes that there exist circumstances under which the CEO reveals the private information she has made a board non-independent and that her decision constitutes perfect Bayesian equilibria. Further, the paper shows that the revelation is followed by a sharp decline in firm value and board monitoring quality. The results are stronger for firms in a poor information environment. Tests based on sudden director deaths suggest the evidence is causal.
Publications
Does Diversification of Share Classes Increase Firm Value? with Sojung Kim and Woochan Kim, 2020, Asian Review of Financial Research
When Heirs Become Major Shareholders: Evidence on Pyramiding Financed by Related-Party Sales with Woochan Kim, 2016, Journal of Corporate Finance
Managerial Entrenchment of Anti-Takeover Devices: Quasi-Experimental Evidence from Korea with Woochan Kim, 2012, Pacific-Basin Finance Journal
Teaching
Korea University Business School
Financial Management (undergraduate), Spring 2021, Fall 2021, Fall 2022
Corporate Finance (undergraduate), Fall 2021, Fall 2022, Spring 2023
Corporate Finance I (graduate), Fall 2023
Entrepreneurial Finance (KMBA special lecture), Winter 2023
Seminar in Finance (graduate), Fall 2021, Spring 2022, Fall 2023
University of North Carolina at Chapel Hill, Kenan-Flagler Business School
Corporate Finance (undergraduate), Summer 2017
Media
"South Korea has had enough of being called an emerging market," Economist, June 2023