University of Cambridge > Talks.cam > Cambridge Finance Workshop Series > Board Diversity and Rare Disasters Risk Insurance

Board Diversity and Rare Disasters Risk Insurance

Add to your list(s) Download to your calendar using vCal

  • UserDunhong Jin (Hong Kong University Business School) World_link
  • ClockThursday 24 February 2022, 13:00-14:00
  • HouseOnline.

If you have a question about this talk, please contact CERF/CF Admin.

About 37% of Chinese listed firms have medical expertise, as measured by the existence of senior executives with a medical degree or medical-industry experience. Using the COVID -19 outbreak in China as a natural experiment, we find that stock returns of firms with medical expertise, excluding those within the healthcare and pharmaceutical industry, are significantly higher than firms without. This effect has a similar effect that financial variables such as leverage, short-term debt, and cash have on the stock price. The positive impact is more pronounced if a CEO or Chairman has medical expertise and if the firm is not state-owned, or when the firm is located in a place with higher infection rates or with fewer public health resources. To shed light on the underlying mechanisms, we also show that senior executives with medical backgrounds enable their firms to react strategically. They have a more conservative attitude toward the pandemic and advise their firms to hoard more cash. Overall, through disentangling macro shocks, this study underlines the importance of diversified executive human capital on firm performance. Even though this diversity does not seem to increase firm value in normal times, it has the potential to insure the firm against rare disaster risks.

This talk is part of the Cambridge Finance Workshop Series series.

Tell a friend about this talk:

This talk is included in these lists:

Note that ex-directory lists are not shown.

 

© 2006-2024 Talks.cam, University of Cambridge. Contact Us | Help and Documentation | Privacy and Publicity