Industry Outreach Dialogue
With Professor Steven J. Davis
Text-Based Insights into Stock Market Behavior
U.S. equities rose sharply in reaction to Donald Trump’s surprise presidential election victory in November 2016. The boom perplexed many analysts, including prominent economists who had predicted a market crash in the event of a Trump victory. To throw light on the market’s reaction, Professor Davis look to firm-level equity returns in the wake of the election. In particular, he relate firm-level equity price movements to text-based measure of exposure to government policy and regulatory risks, which he construct from text in mandatory filings with the U.S. Securities and Exchange Commission. The results show that the election precipitated major shifts in expectations regarding the regulatory climate, trade policy, tax policy, and healthcare policy. While average equity prices responded positively to Trump’s win (and Clinton’s loss), firm-level reactions vary enormously. For example, firms with high exposure to regulatory risks enjoyed especially large equity gains in the days after the election, while those with high exposure to healthcare policy risks saw large relative and, in some cases, absolute equity price drops. If time permits, he will also discuss from another study that uses text-based indicators derived from newspapers around the world to characterize large movements in national equity markets.
Distinguished Service Professor of International Business and Economics, University of Chicago Booth School of Business, and Senior Fellow at the Hoover Institution & ABFER
Dean, NUS Business School and Stephen Riady Distinguished Professor & ABFER
Professor Steven J. Davis
William H. Abbott Distinguished Service Professor of International Business and Economics, University of Chicago Booth School of Business, Exco Member & Senior Fellow, Asian Bureau of Finance and Economic Research (ABFER)
Steven J. Davis studies business dynamics, employment, labor market institutions, economic fluctuations, public policy and other topics. He is a former editor of the American Economic Journal: Macroeconomics and an elected fellow of the Society of Labor Economists. He is also a research associate of the National Bureau of Economic Research, senior academic fellow with the Asian Bureau of Finance and Economics Research, advisor to the U.S. Congressional Budget Office, and visiting scholar and consultant, respectively, with the Federal Reserve Banks of Atlanta and Chicago.
Davis is known for his influential work using longitudinal data on firms and establishments to explore job creation and destruction dynamics and their relationship to economic performance. He is also a co-creator of the Economic Policy Uncertainty Indices and the DHI Hiring Indicators, and he co-organizes the Asian Monetary Policy Forum, held annually in Singapore. Davis has received research grants from the Alfred P. Sloan Foundation, Ewing Marion Kauffmann Foundation, John D. and Catherine T. MacArthur Foundation, and other organizations, including several grants from the U.S. National Science Foundation. In 2013, he received the Addington Prize in Measurement, awarded by the Fraser Institute for Public Policy, for his research on “Measuring Economic Policy Uncertainty.” His teaching experience includes Ph.D. courses in macroeconomics and labor economics at the University of Chicago, the Massachusetts Institute of Technology, and the University of Maryland; MBA courses in macroeconomics, money and banking, business strategy, and financial institutions for Chicago Booth; and executive MBA courses in macroeconomics for Chicago Booth in Barcelona, London, and Singapore. Davis has also taught undergraduate courses in microeconomics, econometrics, and money and banking at Brown University and the Massachusetts Institute of Technology. In addition to his scholarly publications, Davis has written for the Atlantic, Bloomberg View, Financial Times, Forbes, Wall Street Journal and other popular media and appeared on Channel News Asia, CNBC, CNN, Fox News, NBC Network News, and the U.S. Public Broadcasting System, among others.
Professor Bernard Yeung (Moderator)
Dean and Stephen Riady Distinguished Professor in Finance and Strategic Management, National University of Singapore
President, Asian Bureau of Finance and Economic Research (ABFER)
Bernard Yeung is the Dean and Stephen Riady Distinguished Professor in Finance and Strategic Management and President of the Asia Bureau of Finance and Economic Research at National University of Singapore (NUS) Business School. Before joining NUS in June 2008, he was the Abraham Krasnoff Professor in Global Business, Economics, and Management at New York University (NYU) Stern School of Business. He has also served as the Director of the NYU China House, the honorary co-chair of the Strategy Department of the Peking University Guanghua School of Management. From 1988 to 1999, he taught at the University of Michigan and at the University of Alberta from 1983 to 1988.
Professor Yeung has published widely in academic journals covering topics in Finance, Economics, and Strategy; his writing also appears in top-tier media publications such as The Financial Times, Economist, and The Wall Street Journal.
He has also won several scholarly honours and awards for academic excellence, including the Irwin Outstanding Educator Award (2013) from the Business Policy and Strategy (BPS) division of the Academy of Management and Teaching Excellence Awards in NYU’s Stern School of Business and University of Michigan’s Ross School of Business. He is an elected Fellow of the Academy of International Business.
Professor Yeung is a member of the Social Science Research Council (SSRC) in Singapore. He was a member of the Economic Strategies Committee in Singapore (2009) and also a member of the Financial Research Council of the Monetary Authority of Singapore (2010 -2013).
Professor Yeung sits on the 3rd Advisory Board of the Antai College of Economics and Management at Shanghai Jiao Tong University, the Advisory Council of the Economics and Management School of Wuhan University, and an independent Non-executive Director of the Bank of China (BOC) Aviation Limited.
Professor Yeung received his Bachelor of Arts in Economics and Mathematics from the University of Western Ontario and his MBA and PhD degrees from the Graduate School of Business at the University of Chicago.