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Faculty spotlight on finance’s Baixiao “Tony” Liu

Oct 02, 2017

baixiao_LiuTitle: Assistant Professor and Dean’s Emerging Scholar

Leadership service: Department of Finance’s International Programs coordinator; member, college’s International Programs Committee

Recent honors/special recognitions: Dean’s Emerging Scholar Award;

College of Business Undergraduate Teaching Award

Course taught: Problems in Financial Management (FIN 4424) at the undergraduate level

Areas of expertise: The impact of media on the capital market, short selling, mergers and acquisitions

This area interests me because: The media play a key role in generating and disseminating information and, perhaps more importantly, shaping people’s perceptions on this information. I find it fascinating to examine how the media can influence choices of participants in the capital market, including investors, corporate managers and financial regulators.  

Most recently published:

  • “The Role of the Media in Corporate Governance: Do the Media Influence Managers’ Capital Allocation Decisions?” co-authored with John J. McConnell, 2013, Journal of Financial Economics
  • “The Power of the Pen Reconsidered: The Media, CEO Human Capital, and Corporate Governance,” co-authored with John J. McConnell and Wei Xu, 2017, Journal of Banking & Finance
  • “When Is Good News Bad, and Vice Versa? The Fortune Ranking of America’s Most Admired Companies,” co-authored with FSU faculty member Yingmei Cheng, John J. McConnell, and FSU doctoral student Aaron Rosenblum, 2017, Journal of Corporate Finance

The practical implications of my research: By influencing corporate managers’ reputational capital, the media can influence corporate allocation of capital, the managerial compensation structure and appointments to the board of directors. Such influence could be both good and bad to shareholders. On one hand, by incentivizing managers to recoup their loss in reputational capital, the media can facilitate the abandonment of value-destroying corporate decisions. On the other hand, the media can also enhance managers’ reputational capital and induce managers to consume more non-pecuniary benefits.

This is especially relevant today because: Media have become part of our lives, especially accompanied with the explosion of information technology. Think about the amount of time we spend every day reading news, watching TV, surfing on the internet, and logging into Facebook, Twitter, SnapChat, etc. Therefore, traditional media outlets together with internet-based mobile media and social media are exerting more and more influence on our decision-making. The same argument applies to capital-market participants whose decisions could be translated into billions of dollars. Thus, the investigation of the impact of media on the capital market could help us explain choices made by capital-market participants and, hopefully, facilitate them to make better choices.

Why students should consider the field finance: Many years from now you’ll go to a high school reunion. Some of your classmates became doctors; they save lives. Some became engineers; they build houses, bridges, highways and so forth. It seems so easy for them to explain the importance of their profession and their contributions to the society at large. Now they turn to you and ask, “What do you for a living, finance guy?” Your answer should be, “We are the invisible hands that ensure price equals value and, thereby, resources are allocated to their utmost use through the history of mankind.”  

I appreciate COB alumni involvement because: Alumni are key to our growth. Their sharing of experiences, both successes and failures, inspires our students to purse career paths and business adventures that are more likely to succeed in the future. Their generous and kind financial endowments equip us with more resources to expand facilities and pursue further academic achievements.

 

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