Prof. Dr. Shushu Liao is Assistant Professor of Finance at the KLU. She obtained her Ph.D. degree of Accounting and Finance from the Lancaster University Management School, United Kingdom. Prior to that, she received her M.Sc. in Finance from Imperial College London, United Kingdom, and her B.A. of Financial Management from Sun Yat-sen University, Guangzhou, China. Before joining KLU, she was appointed as a research fellow at Auckland Center for Financial Research of Auckland University of Technology, New Zealand. Before that, she was also employed as a lecturer in finance and engaged in teaching of finance courses at Lancaster University Management School.
Her research covers a broad range of topics in corporate finance and corporate governance. In general, her research constantly asks the question of what determines the optimal corporate strategies. Specifically, she investigates the interaction between financing and investment decisions, corporate risk management, financial stability, labor finance, product market competition, managerial styles and executives compensation. Moreover, she employs dynamic structural modelling techniques to explore the impact of financial shocks.
Prof. Liao is recognized as an Associate Fellow of the Higher Education Academy (HEA) in the UK. At Lancaster University, she taught students how to use Bloomberg for financial analysis and how to use Stata to conduct time series analysis. She also taught introductory course for Quantitative Methods for Finance and Investments, guiding students to develop mathematical techniques to build a financial model. At Auckland University of Technology, she supervised master students’ thesis required for the completion of the degree program.
Publications
Journal Articles (Peer-Reviewed)
(2023): Board cultural diversity and firm performance under competitive pressures, Financial Review, 59 (1): 89-111.
Abstract: We examine the impact of board cultural diversity, based on directors' ancestry, on firm performance conditional on product market competition. We argue that culturally diverse boards foster critical thinking and offer creative solutions that help firms thrive in competitive environments. We document that culturally diverse boards are associated with superior performance for firms operating in highly competitive industries. To address potential endogeneity issues, we use a quasi-natural experiment of the U.S. import tariff cuts. The positive impact of board cultural diversity on firm performance in competitive markets manifests itself in firms that innovate more, require creative inputs, and face heightened predation risk due to their high interdependence with industry rivals, in line with culturally diverse boards effectively performing their advisory role. Lastly, we find no evidence that board cultural diversity is associated with enhanced monitoring as its benefits fade in the presence of powerful CEOs.
(2022): CEO Marital Status and Insider Trading, British Journal of Management, 34 (4): 1974-1991.
Abstract: We investigate the association between the chief executive officers’ (CEOs’) marital status and their tendency to profit from insider trading. We argue that marriage can constrain CEOs’ opportunistic behaviour, which could increase litigation risk and show that married CEOs earn lower future abnormal profits compared to unmarried CEOs. We also find that married CEOs are less likely to engage in opportunistic trades and earn lower insider trading profits among firms with weaker corporate governance and those with higher information asymmetry. Our empirical results remain robust after accounting for several endogeneity tests.
(2023): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity?, Journal of Financial and Quanitative Analysis: 1-26.
Abstract: It is well documented that since at least the 1970s investment-cash flow (I-CF) sensitivity has been decreasing over time to disappear almost completely by the late 2000s. Based on a neoclassical investment model with costly external financing, we show that this pattern can be explained by the gradual increase of capital adjustment costs, attributable to the accumulation of knowledge capital. The result is robust to a variety of approaches, including Euler equation estimation and the simulated method of moments. More generally, our findings demonstrate that I-CF sensitivity should only be interpreted as a joint measure of financial and real frictions.
(2021): The effect of credit shocks in the context of labor market frictions, Journal of Banking & Finance, 125: .
Abstract: The recent financial crisis was associated with a large and prolonged deterioration of the credit supply. I build and calibrate a structural model to explore the impact of credit-supply shocks on firm behavior in the context of labor market frictions. I discover that (i) a negative shock to the credit supply can lead to a protracted depression in business activities when firms have a steady level of productivity (demand) and that (ii) a reduction of labor adjustment costs can improve investment and mitigate the negative impact of credit-supply shocks, especially for firms with a high level of productivity. I also empirically corroborate that a lower labor unionization rate can mitigate the negative impact of supply shocks on high-demand firms during a crisis.
(In Press): Does CEO extraversion pay off when in need? Evidence from the global financial crisis, The British Accounting Review: .
Abstract: We examine the effect of CEO extraversion on corporate performance during the Global Financial Crisis (GFC). Contrary to the expectation that extraverted CEOs should shield firms better from GFC adversities, we document that the extraversion characteristic of CEOs places a significant, though negative, effect on corporate performance during the financial crisis. Our findings are robust to controlling for other CEO personality traits. We also perform a battery of robustness tests and validate the underperformance of firms with extraverted CEOs during the GFC using stock returns and measures of operating performance. We argue that because extraverted CEOs are associated with heightened firm risk profile, this can hurt firms when the market disciplines excessive risk-taking during the crisis.
Academic Positions
Since 9/2021 | Assistant Professor of Finance, Kühne Logistics University, Hamburg, Germany |
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| 2020 - 2021 | Research Fellow in Finance, Auckland Center for Financial Research, Auckland University of Technology, Auckland, New Zealand |
| 2019 - 2020 | Fixed-term Lecturer, Lancaster University, Lancaster, United Kingdom |
Education
| 2014 - 2019 | PhD in Finance, Lancaster University, Lancaster, United Kingdom |
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| 2012 - 2013 | M.Sc in Finance, Imperial College London, London, United Kingdom |
| 2008 - 2012 | B.A. in Financial Management, Sun Yat-sen University, Guangzhou, China |
- Shushu Liao (2023): The presentation for the second conference is Title : The role of inventory in firm resilience to the Covid-19 pandemic, 2023 Vietnam Symposium in Supply Chain Management, Hanoi, Vietnam, 23 October 2023
- Shushu Liao (2023): Parent CEOs and Corporate Investment, Finance and Accounting 2023 Annual Research Symposium, University of Westminster, London, UK, 5-16 June 2023
- Jeong-Bon Kim, City Univ of Hong Kong; Shushu Liao, Kühne Logistics Universoty (2023); Yangke Liu, Queen's Univ Belfast (2023): Creditor Rights, Access to Finance, and Stock Price Crash Risk, FMA 2023, European Conference, Aalborg, Denmark, 7-9 June 2023
- Dodd, Olga and Liao, Shushu (2021): Health or wealth? New Zealand response to the Covid-19 pandemic and stock market performance. 25th Annual New Zealand Finance Colloquium Proceedings (Best Paper), Tauranga, New Zealand, 11-12 February 2021.
- Dodd, Olga and Liao, Shushu (2021): Health or wealth? New Zealand response to the Covid-19 pandemic and stock market performance. 11th Financial Markets and Corporate Governance Virtual Conference, La Trobe Business School, Australia, 7-9 April 2021.
- Liao, Shushu, Nolte, Ingmar and Pawlin, Grzegorz (2020): Hit by the Double Whammy: The Joint Effect of Measurement Error in Q and Covariance between Regressors on Coefficient Bias, FIRN Women Virtual Conference.
- Gounopoulos, Dimitrios, Liao, Shushu, Yang, T., Zhang, X. (2020): It´s all about Family, Auckland University of Technology Department of Finance.
- Kim, J.B., Liao, Shushu, Liu, Y. (2020): Married CEOs and Stock Price Crash Risk. 24th Annual New Zealand Finance Colloquium, Auckland, New Zealand, 13-14 February 2020.
- Liao, Shushu (2019): The effect of credit shocks in the context of labor market frictions. 16th Corporate Finance Day, Groningen, The Netherlands, 19 September 2019.
- Liao, Shushu (2019): The effect of credit shocks in the context of labor market frictions. EFiC 2019 Conference in Banking and Corporate Finance, Essex, United Kingdom, 4-6 July 2019.
- Liao, Shushu, Nolte, Ingmar and Pawlina, Grzegorz (2019): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity? Research Seminar Series, University of Southern Denmark, Odense, Denmark, May 2019.
- Liao, Shushu, Nolte, Ingmar and Pawlina, Grzegorz (2019): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity? Research Seminar Series, Bilkent University, Bilkent, Turkey, March 2019.
- Liao, Shushu, Nolte, Ingmar and Pawlina, Grzegorz (2017): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity? 6th Annual Corporate Finance Conference, Exeter, United Kingdom, July 2017.
- Liao, Shushu, Nolte, Ingmar and Pawlina, Grzegorz (2017): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity? World Finance Conference, Calgari, Italy, August 2017.
- Liao, Shushu, Nolte, Ingmar and Pawlina, Grzegorz (2017): Can Capital Adjustment Costs Explain the Decline in Investment-Cash Flow Sensitivity? British Accounting and Finance Association Annual Meeting, Edinburgh, United Kingdom, March 2017.