Glenn and Mary Jane Creamer Associate Professor of Business Administration
Charles C.Y. Wang is an associate professor of business administration in the Accounting and Management Unit and currently teaches the Business Analysis and Valuation course in the MBA elective curriculum. He has also taught executives in Strategic Financial Analysis for Business Evaluation as well as first-year MBAs in Financial Reporting and Control. 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.
Charles C.Y. Wang is an associate professor of business administration in the Accounting and Management Unit and currently teaches the Business Analysis and Valuation course in the MBA elective curriculum. He has also taught executives in Strategic Financial Analysis for Business Evaluation as well as first-year MBAs in Financial Reporting and Control. 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 corporate governance and equity valuation. His 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, Wall Street Journal, 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.
From 2007 to 2016, S&P 500 firms distributed $7 trillion via buybacks and dividends, over 96% of their aggregate net income, prompting claims that “short-termism” is impairing firms’ ability to invest and innovate. We show that, accounting for both direct and indirect equity issuances, net shareholder payouts by all public firms during this period totaled only 41% of net income. And, during this decade, investment substantially increased while cash balances ballooned. In short, S&P 500 shareholder-payout figures cannot provide much basis for the notion that short-termism has been depriving public firms of needed capital.
After decades of de-prioritizing shareholders' economic interests and low corporate profitability, Japan introduced the JPX-Nikkei400 in 2014. The index highlighted the country's “best-run" companies by annually selecting the 400 most profitable of its large and liquid firms. We find that managers competed for inclusion in the index by significantly increasing ROE, and they did so at least in part due to their reputational or status concerns. The ROE increase was predominantly driven by improvements in margins, which were in turn partially driven by cutting R&D intensity. Our findings suggest that indexes can affect managerial behavior through reputational or status incentives.
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.
We provide a tractable model of firm-level expected holding period returns using two firm fundamentals — book-to-market ratio and ROE — and study the crosssectional properties of the model-implied expected returns. We find that: 1) firm level expected returns and expected profitability are time-varying, but highly persistent; 2) forecasts of holding period returns strongly predict the cross section of future returns up to three years ahead. We document a highly significant predictive pooled regression slope for future quarterly returns of 0.86, whereas the popular factor-based expected return models have either an insignificant or a significantly negative association with future returns. In supplemental analyses, we show that these forecasts are also informative of the time-series variation in aggregate conditions: 1) for a representative firm, the slope of the conditional expected return curve is more positive in good times, when expected short-run returns are relatively low; 2) the model-implied forecaster of aggregate returns exhibits modest predictive ability. Collectively, we provide a simple, theoretically-motivated, and practically useful approach to estimating multi-period ahead expected returns.
