Introducing New Faculty

DIVERSE GROUP WILL EXPLORE THE FRONTIERS OF FINANCE, ACCOUNTING, MARKETING, AND MANAGEMENT

SIX NEW RESEARCH FACULTY MEMBERS AT TEXAS McCOMBS REPRESENT INTERESTS AS DIVERSE as using online searches to gauge consumer behavior and assessing the impact of published findings on inventors. These new researchers will build on their previous work as they explore ways to meet evolving industry demands. Here’s a closer look at the six:

DURING THE PAST DECADE, Professor of Marketing Rex Du has worked on leveraging online search trend data as a source of market intelligence. One project uses Google searches as a proxy for consumer interest and pairs it with sales data to deconstruct the impact of marketing.

Du comes to McCombs from the University of Houston. With a doctorate from Duke University, he also served on the faculty at the University of Georgia.

In his research, he has looked at how online searches can clue marketers in to how much consumers value various product attributes and how these evaluations evolve over time.

Another stream of Du’s research measures the effect of television advertising, using data from smart TVs to help advertisers better target their ads.

In his most recent study, Du assesses how consistency in work schedules affects productivity for shift workers. With data from a grocery retailer, he linked the speed with which checkers process grocery items at the register with the checkers’ schedule consistency (e.g., whether they work the same hours of the day or the same days of the week).

“I like to find a firm that has interesting data and interesting problems — ‘pain points’ — that may generalize across industries. Then I come up with a method to leverage this data and address the pain points that I think would make a difference in the world of practice,” Du says.

COMING TO MCCOMBS after an appointment at Columbia Business School, Associate Professor of Accounting Urooj Khan has published work on the economic consequences of banks’ financial reporting, how banks use information to make lending decisions, and the costs and benefits of financial regulations.

“Banks are unique in the kind of information they collect — both soft information and hard information — a lot of which is private. But the financial reports that banks file actually give you insight into some of this information,” Khan says.

He found ways to leverage that insight to predict changes in local economic activity and to build a better metric of banks’ expected credit losses.

Much of his other work has centered on the controversial fair value accounting, which he discovered does lead to timelier write-downs. Fair value accounting can also be used to predict future performance, even though it can increase the systemic risk of the banking sector.

Khan’s work on lending decisions found that personal relationships between company managers and lenders are crucial for debt contracting. In addition, he found that tightening lending standards improves borrowers’ financial reporting.

His current research seeks an improved metric for earnings quality, bridging the gap between academics and practitioners in the field.

AN INDUSTRIAL ORGANIZATION economist with an interest in energy, Assistant Professor of Finance Andrey Ordin earned a doctorate from Duke University and recently completed postdoctoral research at the University of Chicago Harris School of Public Policy.

His research in the oil and gas industry concerns finding equitable leasing contracts for all drilling stakeholders — the landowners, the companies that drill, and the government.

Other studies look to optimize oil tax policies.

“If tax rates are designed to change depending on oil prices, they can reduce the uncertainty faced by the firms, simplify investment, and reallocate it in time,” Ordin says.

In other work, he has looked at municipal bonds and learned that state taxes are a highly efficient tool for lowering the cost of borrowing for municipalities. The study is especially timely in light of the uptick in state and local borrowing during the pandemic.

Curious about how innovation is influenced by behavioral constraints, Assistant Professor of Management Cha Li used data from GitHub to observe the process of evaluating proposals in the context of an organization’s interdependent structure.

One study looks at the search stage of innovation, where people try to find promising opportunities.

“People can be irrational and get stuck on the local peak instead of looking for higher peaks,” says Li, who has a doctorate in strategy from the University of Michigan. “This paper suggests government policies can help firms dislodge from those local peaks.”

Her current research looks at open-source production communities such as Linux, Wikipedia, and GitHub, aiming to understand how paid participants differ from hobbyists in how they explore innovation.

ASSISTANT PROFESSOR OF MANAGEMENT Subrina Shen looks at innovation and entrepreneurship in the context of new technology.

Her previous work assessed the social and social-psychological processes in how potential investors evaluate high-tech startups.

Shen’s current research draws on patent and publication data to examine why companies publish research papers disclosing the knowledge behind their inventions, knowing their competitors may use the information to imitate or replace them.

“We found that publications help an invention attract external follow-up inventions from a diverse set of technology fields, and that those follow-up inventions inspire the focal firm to create better subsequent inventions,” Shen says.

She found knowledge-sharing especially beneficial in fields such as artificial intelligence, because companies can generate external variations without bearing the cost of exploration. Shen has a doctorate from Cornell University, with training in organizational theory and strategy.

ASSISTANT PROFESSOR OF FINANCE Marius Ring conducts research that is largely empirical and focused on further understanding how individuals and companies are affected by financing frictions and taxes.

TOP ROW, LEFT TO RIGHT: Rex Du, Urooj Khan Andrey Ordin BOTTOM ROW, LEFT TO RIGHT: Cha Li, Subrina Shen, Marius Ring

“My main goal is really to provide the types of empirical evidence that we need to inform economic modeling, particularly the kinds of models that are used to determine tax policy. There’s a lot of room for new evidence here,” says Ring, who has a doctorate from Northwestern University’s Kellogg School of Management.

Through a study conducted in Norway, Ring researched how an annual net-wealth tax affected households’ decision-making across time. This is an interesting question, because economic theory is ambiguous on how wealth taxes would affect saving behavior. Although it is common to assume that wealth taxes discourage saving, there’s little empirical evidence to support this. In his study, which puts issues such as evasion and tax avoidance aside to look at actual saving responses, he finds that wealth taxes actually cause households to save more, not less.

Ring has also studied the effects of delayed taxation, finding that young workers were essentially nonresponsive to a 50% marginal income tax that did not have to be paid for 10 years. The theoretical explanation is that credit-constrained individuals care much more about current rather than future cash flows. Therefore, the strategy of adding a long gap between the timing of accrual and the timing of payments may inform models of taxation, he says. —Judie Kinonen