Each week, Daniels is featuring a researcher who conducts meaningful research that impacts their field and the wider community. Learn more about their work in Q&As with the Daniels Research team and email them to nominate yourself or a colleague for a future Q&A.
Pisun (Tracy) Xu is an associate professor of finance. Her areas of interest include corporate finance, corporate governance, international finance and real estate finance. Xu has performed research on the role of managerial incentives in shaping corporate cash policies, the impact of corporate governance on bank lending, the role of information in financial markets, as well as the global credit default swap and REIT markets. Her scholarly work has been published in leading journals, including Financial Management, Journal of Financial and Quantitative Analysis, Journal of Banking and Finance, and Real Estate Economics.
What have you studied over the course of your career?
My research focuses on the role of information in economic and financial decision-making, with work spanning the areas of corporate finance, corporate governance, international finance and real estate finance. I believe that information is the lifeblood of economic and financial systems, so understanding the mechanism of information transmission and processing will help us understand corporate policy and behavior. Information impacts incentives pricing and the market structure. I hope that my research can provide fresh perspectives and findings that are both meaningful and impactful for academics, practitioners and policy-makers.
What have you been studying recently?
One of my current projects looks at the information environment of newly divested subsidiaries, and how it impacts the spin-off’s performance. Specifically, we examine the relationship between analysts’ forecasts and the performance of these firms following the spin-off, uncovering an interesting U-shaped relationship. This indicates that firms with information environments at either extreme—highly transparent or highly opaque—outperform those in the middle of the transparency spectrum. Our findings provide insights into how spin-off firms can strategically manage their information disclosure to enhance performance and attract valuable resources.
Another project I’m working on is looking at how companies’ ESG practices impact their capital allocation and investment policies. ESG strategies have become a priority of many companies and investment decisions are a key area where ESG considerations can have a significant impact. For example, firms that prioritize ESG factors are increasingly directing their capital expenditure towards projects that support sustainability goals, such as renewable energy installations, energy efficiency improvements and sustainable supply chain initiatives. On one hand, we think that these investments will reduce costs in the long run, mitigate risks and lead to better operating performance. On the other hand, investing in these ESG projects might result in higher upfront costs and compete with existing projects., Investigating this can shed light on how companies integrate ESG factors into their strategic planning and decision-making processes.
There is so much variation in ESG ratings, and conversations surrounding green-washing and green-hushing, that it can pose a challenge to research in this field, but there is also a lot of opportunity. Opportunities for creating better research designs or thinking about better metrics or measures. It’s a newer area and is still exciting.
How would you like to see your work impact the world?
My main goal is for my research to have a meaningful impact on the business community and global society. This motivation drives my current work at the intersection of corporate governance and sustainability. In a few of the recent papers, I have explored topics currently under discussion in boardrooms and offered recommendations that boards can use to enhance their company’s ESG practices. My aim is to provide actionable insights that help organizations align their operations with broader societal goals, positively impacting the communities they serve and the environment they depend on. Ultimately, I hope my research contributes to fostering a more resilient and inclusive global economy.
How do you incorporate your research into the classroom?
I have a firm belief in the Teacher-Scholar model and always strive to create a strong synergy between my research and teaching. I teach corporate finance and valuation courses and try to integrate theories and research findings and papers into the lectures. I actively share my research and ongoing projects with students, encouraging their participation in research initiatives. I also engage with students through independent studies, guiding their research projects and have served as a dissertation chair and committee member for our Executive PhD program as well as for doctoral students in other disciplines. In addition, I serve in the university’s Partners in Scholarship (PinS) committee, which supports collaborative research between undergraduate students and faculty members.