(with Lucia Silva-Gao) Accepted at Global Finance Journal

We explore information from extreme climate events to study if and how they impact firm-level risk. The results indicate a positive association between the level of a firm’s exposure to catastrophic climate events, measured based on the location of its headquarters and affiliations, and both systematic and idiosyncratic volatility, suggesting that this risk is to some extent unpredictable and undiversifiable. Furthermore, geographical dispersion increases the exposure of firms to the risk of extreme climate events. Our results also indicate that this effect is more pronounced in industries where environmental issues are financially material and is mitigated by better environmental performance of the firm. In addition, the effect is more pronounced in recent years and increases with investor awareness. Overall, our research contributes to a better understanding of businesses’ exposure to climate change associated risks.

I investigate the role of CEOs' perception of climate risk in corporate policy-making when catastrophic disasters attack their hometowns. I argue that the exogenous occurrence of extreme climate events in a CEO's hometown will lead to CEOs' response to variations in corporate policies, such as cash holdings, ESG disclosure score, and environmental performance of CSR score. I focus on an essentially important question of whether and how climate change risks should be considered by managers when making decisions. This paper also contributes to the existing literature regarding how the CEO plays a crucial role in determining firm policy and brings more evidence on the CEO's hometown and background affect firm decision-making.

(with Lucia Silva-Gao, Mine Ertugrul, and Prianka Musa )

We investigate if climate disasters influence a firm's likelihood of initiating environmental innovation. And we find that firms increased both the number of environmental patents and patents for mitigation or adaptation against climate change after companies' headquarters were exposed to a federal-declared climate disaster. However, the effect decreases as the level of financial constraints of the company increases. Moreover, the effect is enhanced when the company is located in a democratic county. This paper adds to the literature that examines uncertainty and innovation. We demonstrate that climate disaster-induced uncertainty impacts corporate environmental innovation. Our findings deliver empirical support to a body of research showing that financial constraints and political orientation adversely affect innovations.

(with Kun Yu and Xin Gu )

This paper examines whether and how ASC 842 increases the relevance of operating lease liabilities. We find that ASC 842 increases the value and risk relevance of operating lease liabilities through both the recognition of previously disclosed lease information and additional disclosure of operating lease assumptions. Our results are consistent with the standard setters’ view that ASC 842 should increase the relevance and decision usefulness of operating lease liabilities.

(with Lucia Silva-Gao)

This paper examines how CEO make decisions regarding their own wealth after facing the salient risks when companies are exposed in the neighborhood area of hurricanes. We find that CEO confidence, measured by the level of vested but unexercised option holding decreases when the companies are close to the hurricane.

Work in progress

(with Atreya Chakraborty, Lucia Silva-Gao, and Shahbaz Sheikh )

Conference Presentations

• 2022 FMA Doctoral Student Consortium
• 2022 Southwestern Finance Association (SWFA) Meeting
• UMass Boston doctoral seminar 2020, 2021, 2022