Vitae
Academic Appointments
Director, Master of Science in Financial Analytics, Lucas Graduate School of Business, San José State University, 2023 – Present
Associate Professor of Finance, San José State University, 2021 – Present
Co-Director, Center for Banking and Financial Services, San José State University, 2018 – Present
Assistant Professor of Finance, San José State University, 2015 – 2021
Education
PhD, Finance, University of Missouri
MBA, University of Missouri
MA in Economics, University of Missouri
BS, Economics, University of Belgrade, Serbia
Publications
The international effect of managerial social capital on the cost of equity, Journal of Banking and Finance, 2017 (January), Volume 74, pp. 69-84.
Abstract: We examine the effect of managerial social capital on the firm's cost of equity capital. We argue that social ties alleviate information asymmetry and agency problems, which in turn leads to a decrease in the cost of equity. Using a large panel of companies from 52 countries over the period 1999–2012, we document that social capital inversely affects the cost of equity. Our evidence suggests that the association between social capital and the cost of equity capital is stronger in underdeveloped financial markets and those characterized by weak legal protection. The marginal effect of social capital is also stronger for constrained firms with profitable investment opportunities. Our results are robust to alternative model specifications and tests for endogeneity.
CEO social capital, risk-taking and corporate policies, Journal of Corporate Finance, 2017 (December), Volume 47, pp. 46-71.
Abstract: We provide the first direct empirical evidence of the effect of CEO social capital on aggregate corporate risk-taking. Our theory predicts that CEOs with high social capital display higher levels of risk-seeking behavior. Consistent with this prediction, we find a positive association between CEO social capital and aggregate corporate risk-taking. Examining the channel, we show that social ties cause corporate policy actions, and these actions lead to greater volatilities in stock returns and earnings. In addition, we uncover a number of factors that significantly moderate the effects of social capital on risk-taking. We also show that this increase in risk-taking is value-enhancing to the firm. Our results are robust to alternative proxies for risk-taking, alternative model specifications, and tests for endogeneity.
An international analysis of CEO social capital and corporate risk-taking, European Financial Management, 2019 (January), Volume 25 (1), pp. 3-37.
EFM 2019 Top Download Best Paper Award
Abstract: This study examines the effects of CEO social capital on corporate risk-taking around the world. We document a significant positive relation between CEO social capital and aggregate corporate risk-taking. Further, we find that CEOs with large social capital prefer riskier investment and financial policies. We also determine that the effect of CEO social capital on corporate risk-taking is moderated by the extent of legal protections provided to shareholders, the financial development, and the culture of the country in which a firm is incorporated. Our results are robust to alternative proxies of risk-taking, alternative model specifications, and tests for endogeneity.
How friends with money affect corporate cash policies? The international evidence, European Financial Management, 2019 (September), Volume 25 (4), pp. 807-860.
Abstract: We examine the association between managerial social capital and the cash flow sensitivity of cash in an international setting. We find that social capital reduces the marginal propensity to save cash out of cash flows. This association is stronger for more financially constrained firms, firms with high hedging needs, and firms with more uncertain cash flows. The effect of social capital is partially moderated by the extent of legal protection standards and financial development. We also show that social capital matters for valuation. These findings are robust to alternative model specifications, alternative variable measurement, and tests for endogeneity.
Lead independent directors and investment efficiency, Journal of Corporate Finance, 2020 (October), Volume 64, 101690.
Abstract: I show that the presence of a lead independent director on the corporate board is positively associated with investment efficiency. The result is more pronounced for firms with weaker corporate governance standards, less transparent financial disclosure, and greater financial constraints. The lead director presence is negatively associated with overinvestment (underinvestment) for firms with large cash balances and low leverage (high cash flow volatility). Moreover, the lead director investment-related committee membership as well as CEO power matter in this setting. The lead director board role is also positively associated with future firm performance.
Unlocking Dividends: The Impact of Managerial Social Capital on International Corporate Payouts, Journal of International Financial Markets, Institutions & Money, 2024 (September), Volume 95, 102025.
Abstract: We present robust international evidence that managerial social capital is a significant determinant of dividend policy worldwide. Our analysis reveals that social capital mitigates information asymmetry and financial constraints, thereby resulting in increased dividend payouts. The effect is particularly pronounced for firms anticipating high cash retention costs. These findings are consistent with the pecking-order perspective of corporate payouts. Moreover, we identify a significant moderating role of shareholder legal protection and national cultural characteristics. Our results remain robust across alternative model specifications and tests for endogeneity.
Presentations
Financial Management Association Annual Meeting, Chicago, Illinois, 2023
Financial Management Association Annual Meeting, New York, New York, 2020
Eastern Finance Association Annual Meeting, Boston, Massachusetts, 2020
Southern Finance Association Annual Meeting, Orlando, Florida, 2019
Southern Finance Association Annual Meeting, Asheville, North Carolina, 2018
Financial Management Association Annual Meeting, San Diego, California, 2018
Eastern Finance Association Annual Meeting, Philadelphia, Pennsylvania, 2018
Eastern Finance Association Annual Meeting, Jacksonville, Florida, 2017
Southern Finance Association Annual Meeting, SanDestin, Florida, 2016
Southern Finance Association Annual Meeting, Captiva Island, Florida, 2015
Financial Management Association Annual Meeting, Nashville, Tennessee, 2014
Maastricht - National University of Singapore - Massachusetts Institute of Technology (MIT) Real Estate Finance and Investment Symposium, Cambridge, Massachusetts, 2013
Courses Taught
BUS1-170 - Fundamentals of Finance
BUS1-171B - Commercial Banking
BUS1-173A - Financial Management: Theory and Policy
BUS-270 - Financial Management
BUS-270D - Case Studies in Corporate Finance