Charles C.Y. Wang
Assistant Professor of Business Administration
Charles C.Y. Wang is an assistant professor of business administration in the Accounting and Management Unit and teaches the Financial Reporting and Control course in the MBA required curriculum. Professor Wang is a former lecturer in law and economics at Harvard Law School and a past fellow in its Olin Program on Corporate Governance.
In his research, Professor Wang studies empirical asset pricing, equity valuation, corporate governance, and financial regulation. His current focus is on the connections between firm fundamentals and expected returns and on the relationship between governance characteristics and managerial incentives and firm performance. Professor Wang's research has been published in leading journals such as the Journal of Financial Economics and the Journal of Accounting and Economics. Media outlets including The Economist, the Financial Times, The New York Times Dealbook, U.S. News, and Smart Money have cited his research findings.
Professor Wang holds a Ph.D. and an MA in economics from Stanford University and an MS in statistics, also from Stanford. He graduated from Cornell University with a bachelor’s degree in industrial and labor relations. Before his graduate studies, he worked in economic and litigation consulting.
Learning and the Disappearing Association between Governance and Returns with Bebchuk and Cohen
The correlation between governance indices and abnormal returns documented for 1990-1999 subsequently disappeared. The correlation and its disappearance are both due to market participants’ gradually learning to appreciate the difference between good-governance and poor-governance firms. Consistent with learning, the correlation’s disappearance was associated with increases in market participants’ attention to governance; market participants and security analysts were, until the beginning of the 2000s but not subsequently, more positively surprised by the earning announcements of good-governance firms; and, although governance indices no longer generated abnormal returns during the 2000s, their negative association with firm value and operating performance persisted.
Boardroom Centrality and Firm Performance
Firms with central or well-connected boards of directors earn superior risk-adjusted stock returns. Initiating a long position in the most central firms and a short position in the least central firms earns an average risk-adjusted return of 4.68% per year. Firms with central boards also experience higher future growth in return-on-assets (ROA) with analysts failing to fully reflect this information in their earnings forecasts. Return prediction, growth in ROA, and analyst forecast errors are concentrated among firms with high growth opportunities or firms confronting adverse circumstances, consistent with boardroom connections mattering most for firms that stand to benefit most from the information communicated and resources exchanged through the network of board members. Overall, our results suggest that board of director networks provide economic benefits that are not immediately reflected in stock prices.
How Do Staggered Boards Affect Shareholder Value? Evidence from a Natural Experiment
This paper examines whether staggered boards reduce firm value or are merely associated with it due to the tendency of low-value firms to maintain staggered boards. To analyze this causal question, we take advantage of a natural experiment involving two recent court rulings, separated by several weeks, that affected in opposite directions the antitakeover force of staggered boards. We find evidence consistent with the hypothesis that the market viewed the antitakeover force of staggered boards as value reducing. Our findings have implications for the long-standing policy debate on the desirability of staggered boards.