2021 marks the 20th Anniversary of the Faculty of Business and Economics. The Faculty has planned for a new branding campaign and invited our faculty members, students, staff and alumni to co-create a tagline that aligns with our vision and mission, and conveys powerful message to the community.

We are thrilled to receive over 120 entries from the FBE community. Five outstanding ideas as follows are shortlisted based on the relevance to the Faculty, creativity and catchiness of their tagline ideas:

*Listing in alphabetical order of surname

Congratulations to all the selected contributors and you will receive individual notification email accordingly.

Thank you everyone for your participation in this campaign. We are now finalising the tagline, based on the five selected ideas, to best reflect the uniqueness and highlight the essence of the Faculty.

Please stay tuned to our upcoming events and we count on your support to make the 20th Anniversary Celebration a remarkable one.

Dr. Jingqi Wang, receives Faculty Outstanding Researcher Award 2019-20r. Jingqi WangAssociate Professor of Innovation and Information Management, is the recipient of the Faculty Outstanding Researcher Award 2019-20. Possessing strong interest in conducting empirical studies in operations management, technology supply chains, and innovation in supply chains, Dr. Wang’s work were published in academic journals of international standing, such as Management Science, Manufacturing and Service Operations Management, and Production and Operations Management.

The Selection Committee acknowledges the high quality and quantity of Dr. Wang’s research publications, and his important contributions through novel research during his service with the University of Hong Kong.

The Faculty Outstanding Researcher Award was established to honour and reward faculty members for having done excellent research and achieved international recognition in the field of business and economics.

The ultimate multitasker

While Dr. Phan asserts that he is never in the academic rat race, his dedication and interests towards science and technology have rewarded him the opportunity to major in computer science and electronics engineering at MIT with concentrations in business and economics. Excellent academic performances, mastery over technical skills, has brought Dr. Phan with other like-minded individuals to establish a start-up in software engineering during his sophomore years. Dr. Phan’s multitasking ability is very impressive. Few could manage to study three majors, run a start-up, prepare for job interviews, and win ball-room dancing competitions in tandem.

“I am a person motivated by interest. I do things that I am interested in, therefore I never have problems with time management.”

From the private sector to the academia

While Dr. Phan’s start-up had produced a state-of-the-art 3D graphics drawing software, the market response was lukewarm. At the start-up, he fell in love with applying his technical skills to business problems. After a stint in the corporate world, Dr. Phan realized that business problems can be more complicated than engineering problems. Engineering problems are usually placed in a right-or-wrong dichotomy. They are well defined, and an absolute answer could be obtained. Business problems, on the other hand, are amorphous. Depending on how you define it, the problems can be addressed.  Otherwise, it can be intractable. While data are increasingly available, it is critical for business leaders to place it into context and include other hard-to-observe factors including consumer psychology, endogenous economic effects, and sundry processes.

This discovery has encouraged Dr. Phan to become a marketing consultant to look at intangible problems with a quantitative lens. After taking a PhD in marketing and accidentally falling in love with knowledge creation, Dr. Phan has decided to become a marketing scholar.  

Consultation works in Hong Kong

In addition to teaching and research, Dr. Phan also engages with industry leaders in Hong Kong. His duty is to consult local companies from different sectors, mainly through marketing, education, social media, Big Data, AI and Fintech. Dr. Phan will assist them to incorporate big data, AI, and digital technologies into their strategies. Furthermore, he will advise them on the development of micropayments and micro-lending technologies.

Knowledge sharing – Fintech Development in Southeast Asia & Human adaptability

On Jan 2, Ant Finance, a subsidiary of Alibaba has applied for a virtual bank license in Singapore. Given that local students have little understanding of the Southeast Asian financial market and they are generally enthusiastic about Fintech, we have taken this opportunity to seek Dr. Phan’s knowledge. Moreover, as Dr. Phan is an expert in social networks, youth mental health, and education, we would also like to seek his advice on social problems created due to the lack of face-to-face communications with the rise of the digital era.

First of all, will virtual banks replace traditional banks?

In the realm of virtual banking, there are Fin-tech firms and Tech-fin firms. Fintech firms are originally technology companies that have eventually transformed into financial institutions. For example, while Ant Finance was originally responsible for the E-commerce of Alibaba, it has eventually become a virtual bank due to the development of Big Data technologies. Tech-fins are financial institutions that have been modernizing themselves with the latest financial technologies. Although they have different starting points, they share the same destination.

Dr. Phan believes that competition between traditional financial institutions and Fintech firms is unlikely. Fintech firms are very specialized, mostly in the fields of micro-lending and payment services, a niche where traditional financial institutions may not have a comparative advantage. On the other hand, traditional financial institutions provide a package of general services to the market. They handle deposits, sell investment plans, and issue huge loans for businesses. Dr. Phan believes that even if the Fintech firms so desire, they are unable to challenge traditional financial institutions as they are unable to take deposits. This is a point made by the CEO of Citibank, to be one of the mistakes Citibank had made in previous years. Without sufficient retail chains to collect cash (deposits), Citi has a hard time to get entrenched in the Asian financial market. While North Asian countries are heading towards a cashless society, the Southeast Asian countries are still very cash-based.

An overview of the Southeast Asian financial market

Dr. Phan said that the Southeast Asian financial market is very fragmented. Judging from the market size and population, the VIPs of the region are Vietnam, Indonesia, and the Philippines. However, their progress of development in Fintech and their legal framework on financial laws varied greatly. While most of the Southeast Asian countries are still very cash-based, things are changing in Indonesia. In an unofficial survey, Dr. Phan realized that 80% of the Indonesian population would use Gojek as a digital wallet, implying that Fintech development is progressive in Indonesia, whereas the development of Fintech in Vietnam will be slower, as the threshold to attain virtual banking license is high. In Cambodia, the emergence of Fintech loan sharks has made a lot of citizens seriously in-debt.

The development in Singapore is a totally different story. Singaporeans on average have around half a dozen credit cards and they are open to Fintech. However, Dr. Phan is of the opinion that E-payment is not going to challenge the supremacy of credit cards in Singapore. This is mainly because the benefits given by E-commerce are incomparable to credit card companies in the present.

When asked whether there is a bubble in the Fintech sector, Dr. Phan is convinced that as the banking industry is more cautious nowadays, another dot-com bust is unlikely. Valuing factors such as sustainable cash flow and healthy credit records more than business ideas may slow down the growth of technology, but it creates a more stable investment environment.

The adaptability of humans and the necessity to salvage those who failed

The lack of face-to-face communication and the development of online technologies have enabled oneself to isolate themselves in niches of the internet, creating cynical communities such as the Incels (involuntary celebrated). However, putting the issue in a bigger scope in the history of mankind, the development in communication technologies have always created better than harm.

Thousands of years ago we have to ride a horse in order to traverse geographical boundaries and carry out long-distance communication. Now, with the help of the internet, boundaries of space and time are broken and communication costs are greatly reduced. Dr. Phan had worked with data scientists on Facebook and other big technology companies through the years and has observed how people’s attitude and behavior towards social media has changed over time. For example, when Facebook was first introduced, people are very open about their private life online. After realizing the detrimental effects such as identity theft, data loss, and social media addiction disorder, governments have started to regulate their usage and grow awareness of online privacy. What politicians and academics can do is to educate citizens more systematically on issues such as online privacy and security.

Way forward

Dr. Phan believes that Hong Kong is experiencing an awakening. The city has realized that she is more than an IFC but also a major regional and global research and R&D hub. However, the city is seriously lagging behind in the implementation of new technologies in business operations and daily life. Dr. Phan suggests that Hong Kong could learn from the USA, China, Europe, and Singapore in its success to be technologically developed.

For example, the success of Singapore is credited to its government’s willingness to provide support to upgrade all its sectors.  Initiatives such as labor force upskilling, upgrades on the company’s systems and business models are carried out with full support. Dr. Phan recommends the Hong Kong government to take a two-pronged approach. On one hand, the education system should put a heavy focus on information technologies and AI since primary education. On the other hand, free or subsidized short-term non-degree programs for the labor force in order to make them compatible with the introduction of high-end production technologies. It is only when the norm of learning technologies is formed, the city would have the momentum to catch up with its neighbors.

Hasta La Vista Family Business

Prior to the father of Dr. Maurer becomes an entrepreneur, he was the successor of his family business. Instead of taking joy of becoming the torchbearer, working and arguing with his own kin were miserable to him. Therefore, he admonished his children that they should pursue their own interests instead of following his footsteps.

Pursuing the interests he did, Dr. Maurer had taken major in Economics and furthered his economic studies by enrolling in a master's programme. Propelled by flying colors on his scorecard and strong business acumen, Dr. Maurer was awarded an equity research internship with a renowned titan in the banking sector. Although conducting equity research in private banking is a dream to many business students, Dr. Maurer found it not his cup of tea.

While most practitioners in the industry are only keen to know how financial models and equations could assist them in trading, Dr. Maurer is interested in understanding the inner workings behind different models and equations. To gain new knowledge by exploring the unknown, and to prove hypothesis through scientific corollaries and nuance logical deduction is what Dr. Maurer find financial studies interesting. Eventually, Dr. Maurer took a PhD in finance and became a scholar.

Pedagogy as a noble pursuit

In the natal years of Dr. Maurer’s academic career, he only treated teaching as an obligation. But subtle changes soon occurred and Dr. Maurer began to develop interests to connect with his students. During his teaching career in the US, Dr. Maurer reminisced that classes were small. One professor only has to lecture around 40 students. Capitalizing the advantage of a small class-size, Dr. Maurer took the initiative to discuss with students on their studies and career choices. Dr. Maurer felt privileged to be a teacher, as clearing the fog shrouding students’ future with his experience and knowledge, and subsequently receiving their gratitude, is a very rewarding achievement.

PhD is not the best path to investment banks

While Dr. Maurer welcomes students to join academia, he stresses that one must be passionate towards knowledge creation and must have great endurance. Creating new knowledge out of the blue is no easy task. While most enjoy the process of brainstorming new ideas, it could be boring to keep reading literature and thinking on the same problem for weeks, for months, and for years. Errors will also keep popping out, forcing researchers to redevelop their models over and over again. But Dr. Maurer believes that one could still seek joy from the ordeal. To discover special patterns and share your findings with other like-minded individuals in seminars and conferences, are what Dr. Maurer describes as “small happiness” in research.

Although taking a PhD could help you to land a job in the back office of an investment bank, Dr. Maurer considers this strategy an uneconomic one. PhD is not only difficult to accomplish, but it also takes 4-6 years from you. One would have been promoted several times during this interval already. In addition, research skills developed in PhD is not entirely compatible with the private sector. While the academia offers scholars unlimited research time and full discretion on topics selection, financial institutions do not offer you such luxury. It will be difficult for one to adapt to transfer from academia to the private sector.

Foreign exchange research

Over the years, Dr. Maurer has developed a great interest in researching on foreign exchange rates. His latest research focuses on what risks do investors face in the foreign exchange market and how they would mitigate and hedge these risks. Dr. Maurer points out that while there are a lot of existing financial models capable of explaining different economic forces, they are usually terrible at analyzing the economic forces behind the risks in the foreign exchange market. In order to solve this conundrum, Dr. Maurer adopts a two-pronged approach.

From a theoretical point of view, Dr. Maurer investigates how different investors from different countries price different risks by investing in different assets, and how their actions are related to exchange rates. On the other hand, Dr. Maurer will analyse this phenomenon empirically in order to investigate the optimal combination of different risks which generates the highest possible average return. In addition, Dr. Maurer will also investigate the risk compensation each risk in the foreign exchange market earns. Dr. Maurer believes that this research is useful to currency traders, high net worth individuals and international corporations’ which aims to hedge risks and even central banks around the world.

Using the Hong Kong Monetary Authority (HKMA) as an example, it is tasked to maintain the fixed exchange rate between the Hong Kong dollar and the US dollar. However, as the stability of the link is constantly under-challenged caused by local and US economic shocks, the HKMA has to buy or sell US dollars regularly in order to stabilise the exchange rate. Therefore, it is important to understand these risks and to know how expensive monetary interventions could get.

The time discount rate of US soldiers’ pension

In addition to his research on foreign exchange rates, Dr. Maurer is also researching on time discount rates by using data from the US military. The model aims to analyse how the changes in time discount rates affect asset pricing and the equilibrium model.

In the US military, soldiers are given a choice to either use a normal pension plan, or to get a cash pay-off immediately from their future pensions. This data enables Dr. Maurer to estimate the implied time discount rates for these soldiers and based on these results, Dr. Maurer discovers that there is a huge time variation in the discount rates among different service members. After further research, Dr. Maurer discovers that changes in local macroeconomic, especially in the changes of the property price, have a significant impact on the time discount rates on US soldiers.

In the US, if the value of your property appreciates, house owners could make their house a collateral and borrow more money from the bank, encouraging an increase in consumption expenditure. On the other hand, an appreciation in property value makes one feels wealthy, which may encourage additional consumption expenditures. After the US housing market crashed in 2007-2009, the country has been in need of efficient property policy. It is vital to understand whether relaxing borrowing constraints or asset purchasing programs are more effective to stimulate the economy. More recently one may wonder whether cash handouts by the HK government to citizens are an efficient policy to revive the local economy.

Are fintech firms deceiving investors?

Ever since the fintech trend has taken off, there have been concerns that fintech firms are deceiving investors by producing unnecessarily sophisticated and expensive technologies to solve simple tasks that could be handled by cheaper alternatives. Dr. Maurer had once heard of a story, where a firm had added the word Blockchain in its company name whilst none of its business is involved in Blockchain. The stock price of that company raised greatly immediately after the rename but it plunged after it was debunked.

While these kinds of fiascos are unpreventable, Dr. Maurer remains positive that the development of fintech does inject new impetus into the market. For example, the emergence of crowdfunding platforms has enabled a lot of micro start-ups who were rejected by traditional financial institutions to acquire capital. Crowdfunding platforms are also very useful in pushing social agendas. For example, in October 2019, YouTuber MrBeast and Mark Rober had started an initiative called TeamTrees, which aimed to raise USD 20 million to plant 20 million trees. The project received overwhelmingly positive feedback on the internet and its advertisements were featured in over 8000 YouTube videos by December 2019. The movement had also drawn the attention from big investors such as Elon Musk, who donated USD 1 million (and changed his Twitter account name into Treelon afterward), and the CEO of Shopify Tobias Lütke, who donated USD 1 million and 1 dollar. The project had met its goal in December 2019.

Machine Learning, on the other hand, is also a game-changer in the financial sector. Compare with traditional formulas and programmers, an AI could process large amounts of unprocessed data to calculate and predict different growth patterns. While the data produced by AI are highly accurate, Dr. Maurer also thinks that its major problem lies in its opaque operation pattern. AI operates in a black box. It presents the results to users without conveying how the result is produced. While financial institutions may not be keen on truth-seeking, it more or less implies that AI will not be beneficial to fields other than finance, such as in the fields of policymaking. When fathoming policies or predicting the impact of a certain policy, policymakers would have a strong incentive to understand what role do different factor play and how to do different factors impact one another. This matters to policymakers as the government serves as a platform to bridge and balance the interests of different stakeholders. Simply focusing on the end results without analyzing the impacts could yield catastrophic results.

Way forward

Joining HKU, Dr. Maurer hopes that he can create a positive impact on students’ personal development. Teaching in HKU for one semester, Dr. Maurer observes that students are relatively shy compare with the West. Dr. Maurer understands it is difficult to speak publicly as he himself takes years of practice to overcome this challenge. While he is keen to hang out with students, Dr. Maurer believes that the class size in Hong Kong might be too overwhelming to pull it off.

Inspired by the dean’s ambition to make the business school one of the best in the world, Dr. Maurer is aspired to form an international foreign exchange rates, expert group, by leveraging the reputation and connection of HKU.

Final destination

Before Dr. Li becomes a scholar, she was a practitioner of a financial leasing company. Frustrated by the lack of systematic record management methodologies in the market, Dr. Li decided to develop these tools herself. But eventually, the joy of creating and passing down knowledge has Dr. Li stayed behind.

Dr. Li herself is a very passionate teacher. Her students find her friendly and approachable. They also commented that she is exceptionally good at simplifying complicated phenomena into simple understand principles. Substantiating her views with rich case studies, students genuinely believe that they could learn a lot from her. Satisfied with what she has achieved, Dr. Li views academia as where she belongs.   

What to do after graduation?

Many have asked Dr. Li on whether they should further their studies after graduation. Other than time and funding, the important question is to understand what kind of career you are pursuing. If you are into knowledge creation, Dr. Li encourages students to enter academia through MPhil and PhD. If you are keen on developing a career in the private sector, taking a Master would be conducive. Master programmers are the best venues for industry practitioners to establish their network and the programme itself has a strong focus on real-life applications.

To become an all-rounded person

No matter what paths students are choosing, Dr. Li believes that keeping an open mind greatly empowers one to excel in both academia and the private market. Most of the time, the reason we cannot solve a problem is likely because our view is limited and the knowledge and methodologies we possess are insufficient. It is therefore important for one to broaden their horizons and develop an international worldview.

As a scholar of economics, Dr. Li strongly recommends economics major to pay attention to other business and non-business related disciplines. Economics is omnipresent. Its theories and econometrics models are used by political scientists in policymaking, used by marketing teams to predict growths, and used by computer engineers in developing financial products. Therefore, one cannot fully understand the reach and implications of economics simply through textbooks. Business students are, therefore, highly encouraged to develop a second major in a non-business related stream.

For students interested in developing a career in the private sector, Dr. Li believes that computer science suits them best. In the age of data, having expertise in coding and programming would be very desirable. But for students who hope to realize their knowledge and create social impacts, Dr. Li believes that studying international relations and political science could empower them to achieve their aspirations.

Beyond career choices, Dr. Li believes that majoring in communications could greatly benefit one in their studies and work. After all, we need to present ourselves clearly in order to persuade effectively. Either persuading investors through project proposals or persuading our teachers that we really have to pay attention in class via term assignments. As business students lack the opportunity to write, other than majoring in communications, the best way to hone one’s writing skills is to read novels and journey articles. However, given that business students are occupied by case competitions, intern interviews, and other after-school activities, Dr. Li believes that consultation reports could be a short-cut. Consultation reports are masterpieces. They are very short but they are capable of conveying important messages with the easiest of words.

However, even though there is a short cut, developing good writing skills is still a chronic process. Dr. Li recommends students that after they have finished writing, they should read it to themselves and seek comments from their friends. If time allows, students should leave their writing for 3-4 days before reading it again. Then, you could review it with a fresh mind and may even discover hidden problems.

But at the end of the day, the purpose of taking a second major is to diversify our skills and broaden our horizons. Therefore, if students are interested in non-business related disciplines such as music, literature, and sports, Dr. Li would also offer them her full support. (If you are interested in the relationship between arts and economics, please check out Professor Li Jin’s article: “Art, Life, Economics”)

The ABCs of a Researcher

During the interview, Dr. Li had also shared with us her life as a researcher. She believes the presentation for her PhD dissertation was the most remarkable experience in her scholar career. She was very nervous at the beginning but after being encouraged by her PhD adviser, she had gained the confidence to present it eloquently. Dr. Li believes that the gist to excel in a public presentation is to have faith in yourself. Once you have successfully convinced yourself that you are THE expert in what you are presenting, you could express yourself freely on stage.

It is easier said than done and practice makes perfect. As the first step is the most difficult, Dr. Li encourages students to practice with her prior to their presentations. Although she would kindly offer them advice to improve, she hopes that students could gradually expand the size of their practice audience. From your parents to your friends, from 20 audiences to 200 audiences, you will eventually get used to public presentation.

The elementary school teacher of Dr. Li had told her that “Those don’t know how to play, don’t know how to study.” Now she thinks about it, this sentence is particularly true after she has embarked on her academic journey. As it is very often for one to face setbacks and failures during research, one must learn how to relax. Dr. Li herself will take one day off every week in order to refresh her mind. When she returned to her work desk tomorrow, she would be able to view the problem from a whole new perspective. In addition to talking with friends and family, discussing with other Ph.D. students and scholars could be conducive to gain new professional insights.

Research in the pipeline

Currently, Dr. Li is working on two research papers. The first one is about consumer preferences for variety. When speaking of purchasing preferences, we often think that we will only buy one specific type of product. For example, we will either buy a bottle of coke or a bottle of orange. But in reality, consumers will prefer variety. Dr. Li observes that consumers will purchase different products of the same group (E.g. plain yogurt and strawberry yogurt) and consume them in rotation. Therefore, Dr. Li attempts to translate this behavior into an economic model in order to facilitate future analysis of consumer demand estimation.

The second research is about product quality in the Chinese steel industry. Dr. Li observes that if you try to increase product quality, the costs will grow because of resources spent on R&D and QC. However, in the Steel industry, Dr. Li discovers that the construction for normal buildings does require the perfect steel. The market for average steel exists and it is surprisingly large! Therefore, Dr. Li aims to investigate how steel factory owners will make their production decision. Whether they will produce the hard-to-produce perfect steel and seek value from the high-profit margin, or will they go for the easy-to-produce average steel to guarantee income.

Knowledge sharing: Case studies of proper indirect advertisements & The economy in the era of solitude

Since Dr. Li is an expert in consumer preferences and she has been keeping a keen eye on social issues, we have decided to seek her knowledge on these issues.

Indirect advertisement – a Hong Kong case study

In November 2016, during an anniversary celebration of a TV station, its artists are arranged to consume fried chicken from a famous brand on screen for more than a minute. This incident not only angered netizens, but it also caused the company to be fined HKD 150,000. This is not the first time the TV station was criticized for its improper advertisements. In 2016, in a fantasy costume film, some netizens found that the protagonist in the Ming Dynasty was consuming bucket fried chicken.

Regarding this problem, Dr. Li believes that indirect advertisements should only be made under three considerations: First, is it necessary? Second, will the audience accept it? Third, does it constitute to the commercial success of the show?

The bottom line is that indirect advertisements must not upset the audience. For example, people will not complain if they see a protagonist in a modern show working in 7-11 or drinking Heineken beer. As advertisement is an important source of income for TV broadcasts, Dr. Li hopes that the industry could be more professional.

An era of solitude

We are living in a digital age, where technological advancements have allowed us to communicate beyond the barrier of space and time. However, this has also reduced interpersonal interactions in real life. As we are entering an era of solitude, Dr. Li believes that there will be the following changes in the market.

In terms of human behaviors, Dr. Li believes that the lack of face-to-face communication could save up a lot of time and make communication more efficient. With more time saved, people would have more time to learn, receive, and disseminate new information. Dr. Li is optimistic that as people could work more efficiently as a unit on their own, it will be conducive to the world’s development and innovation.

On the other hand, market demand for a better evaluation system increase. As people are spending more time online, the time they are exposed to internet news will also increase. Therefore, a good evaluation system is necessary to fight off fake news and accredit the truth. Likewise, demand for personal information protection will also increase, as we are leaving more and more footprints on different websites and social media platforms.

While the era of solitude harbors opportunities to mankind, it also brings detrimental effects to our society. For example, the presentation skills of people may be weakened as the era of solitude allows people to isolate themselves and avoid verbal expressions. Speaking is an art that requires practice to perfect. Thinking about the words in your mind is different from saying it out. Being speechless and replying only in single words will cause one to stutter and have difficulties in organizing fluent and reasonable speech patterns in real-time. Unable to convey yourself effectively can also lead to embarrassing encounters, damaging one’s confidence and creating a vicious cycle that forces one to speak even less. This may explain why a lot of university students can only conduct their presentations looking at a fully-written Q card and are being quiet during group discussions. The emergence of a generation that cannot even speak confidently and effectively is detrimental to the competitiveness of our city. Moreover, an era of solitude also implies that interaction among people will also decrease, making it more difficult to cultivate good interpersonal skills. This is one of the reasons why the young generation is often considered to be rude, self-centered, and are unable to get along with each other.

The cocktail of low self-esteem, poor presentation skills, and weak social skills has resulted in anti-social communities such as the Incels (the Involuntarily Celebrated). The Incels is a community of young males in North America. Members are usually unemployed or are barely able to make ends meet. They are characterized by extremely low self-esteem, especially in romantic relationships. Although most are just whining about their misfortune and are acting as violent misogynists on the internet, their worshiping of Elliot Rodger, (A 22-year-old Incel who killed seven and injured 14 before committing suicide in 2014), has risen a red flag. It is an established fact that most of the Incels are victims of depression and anxiety but that does not justify their cynical world view and twisted values.

While groups like the Incels are branded as the minority, as the era of solitude goes on, the demand for related rehabilitation serves may increase to salvage our future generation. Dr. Li believes that it is also likely that enterprises may have to purchase more ice-breaking and team-building services in order to develop social skills among staff.

Way forward

Joining HKU, Dr. Li is ready to dedicate herself to pedagogy. As a passionate teacher, Dr, Li will try her best to offer the most detailed career advice and academic guidance to her students. She concludes her aspiration in HKU by the following sentence:

“Make me more knowledge and make my students enjoy themselves to be knowledgeable”

From tax consultant to researcher

Accounting is generally considered to be the bedrock of the modern financial markets. Through studying different financial statements from different firms, one could develop a keen sense of the inner workings of the capital market. As a young man with a curious soul, Dr. Fan decides to observe the world through the lenses of accounting.

Graduating with flying colors, Dr. Fan’s relentless effort had rewarded him offers from every one of the Big4 accounting firms. Eventually choosing to become a tax consultant, Dr. Fan has explored the private sector for a year and a half. Working for the Big4 has opened up the door to the new world for Dr. Fan. During his tenure, Dr. Fan had come across financial statements from hundreds of companies. Studying them is like running inside a kaleidoscope. Their different organizational structures, business models, and financial performances have piled up into a formidable array of knowledge to be explored. The process of being intellectually stimulated by questions the world has to offer, Dr. Fan is encouraged to become an accounting scholar in order to seek truth from facts.

How to excel in undergrad and postgrad

While many believe that the skills required to excel in undergraduate courses are entirely irrelevant to postgraduate research, Dr. Fan believes that the gist to succeed in both curriculums is the same. To stay hungry, stay foolish has always been the iron law to succeed in studies. One will never improve if staying content with knowledge spoon-fed by teachers. It is equally important for students from both curriculums to hone their accounting expertise and stay tuned for financial news. While entry-level posts focus mostly on your accounting expertise, managerial roles in the accounting industry will require employees to exercise judgment and act according to the latest development in the business world. It is, therefore, crucial to read financial news from multiple sources in order to broaden your horizons. Moreover, as it is common for different authors to take different stances on the same issue, analyzing their differences would be the perfect opportunity for undergraduates to intellectually stimulate themselves.

In addition, as managers in the accounting industry are responsible for a lot of business persuasion, Dr. Fan also recommends students to develop and polish their communication and organizational skills at an early age. The rich and diverse out-school activities offer by student societies are the best whetstones the university could offer. 

Postgraduates, on the other hand, should pay relatively more attention to develop their understanding of economic theories and advance their statistical knowledge in order to produce credible and systematic research work. Reading financial news is still important, as new business phenomena are easily the best research topics to work on. Since research is hard and failure is often, Dr. Fan recommends postgraduates to set reasonable goals and stay positive during the process. Dr. Fan believes that his unrelenting interests in accounting have given him the courage to face his failures squarely in order to troubleshoot and improve.

Writing skills are also very important to a postgraduate, as the readability of your research papers is a critical factor considered by journal editors when deciding which paper should be published. In the case of Dr. Fan, he alleged that his verbal reasoning skills are developed during his preparations for GMAT exams. Dr. Fan believes that doing aptitude tests allows one to systematically enhance their skills in numerical reasoning, verbal reasoning, and logic in tandem. Therefore, even if you are uninterested in developing a career in the private sector, you should not shy away from opportunities to holistically develop yourself.  

The value of internships

Having internships with prestigious accounting firms could glamorously embroider your CV. Although tasks assigned to interns are usually mundane and maybe insignificant, Dr. Fan hopes that students could be more thoughtful and look for opportunities that could stimulate their personal growth. For example, students could immerse themselves in the company’s perspective when dealing with tasks that involve monetary interests. To be able to feel the pressure could encourage students to be more cautious and serious.

Dr. Fan also believes that internships provide students the opportunity to develop a proper and professional working attitude. Dr. Fan recommends students to do more background research before working on your assigned tasks. Being better informed on the subject matter would definitely give you an edge in out-performing others and build up your reputation in the long run. Applying this mindset in your studies could encourage one to seek knowledge beyond the undergraduate curriculum and develop a more solid foundation than your peers. As accounting is the bedrock of the financial world, mastering it grants one an edge to master any advance financial knowledge.

Blockchain technology as a hot research topic

The blockchain technology is a buzzword in recent years, renowned for its competence in producing highly transparent and highly credible transaction records. Researching its actual effect on the market has, therefore, become a hot topic among researchers.

Dr. Fan has recently conducted research on whether the introduction of blockchain could add value to shareholders. Using an event study in the US, by analyzing the impacts caused by a regulation that enables firms to record stock transactions with blockchain, Dr. Fan observes that the market reacts positively to the technology. Dr. Fan posits that the blockchain technology shines brightly in the fields of increasing the accuracy of proxy voting during shareholder meetings.

Before the introduction of blockchain, voting often entails a lot of problems and errors due to the complicated voting system and non-simultaneous update in the information. However, utilizing blockchain in the voting process enables users to receive perfect information on the voting process and the voting results. As data uploaded are copied to users at the same time, it is nigh-impossible for individuals to manipulate and fabricate the records.

Blockchain has not only solved the fundamental problem in bookkeeping, but it also gives an alternative to the market to decentralize itself if necessary. However, Dr. Fan believes that the degree of decentralization varies in different sections. Bitcoin, for example, is a financial product existed due to the mistrust of the authority figures in the banking industry. Its market is totally decentralized and although buyers are anonymous, the on-going transactions are transparent to all thanks to blockchain technology. However, to the extent the market demands privacy protection in transactions, buyers would still prefer to trade through traditional intermediary agencies and willingly be monitored by authority figures.

The future of the accounting industry

As the introduction of AI has taken up a lot of traditional accounting duties, accountants must evolve from compliance workers to strategic consultants. When asked how students could better prepare themselves for these roles, Dr. Fan begins by introducing us to the three ways accountants are important to the market.

First, accountants are responsible for making external financial reporting of firms. This task is crucial as it is the window to draw external investors. In order to effectively perform this task, students must develop a better understanding of the accounting standards, laws, and regulations in different regions. Students should also work hard on their numerical reasoning skills and data analytical skills in order to produce better accounting estimates and minimize the information asymmetry between firms and investors.

Second, accountants are also consultants. Accountants’ responsibilities in analyzing financial statements and make recommendations based on the statistics are often being looked over. While it is a task that requires years of practical experience in order to have decision-makers entrusted you with the task, students could start developing their business acumen by paying attention to the latest business phenomena.

The third and the most important duty of an accountant is to performing internal control. Effective accounting control is critical to the operational capacity and efficiency of a company. It reduces accounting errors and ensures that the firm’s performances are reflected accurately. To perform this task, Dr. Fan advises students to skills in programming and data analytics, as so to improve the data management of firms by ensuring that the data generation process is error-free.

Way forward

Before joining HKU, Dr. Fan had taught in the US. Although it is believed that local students are much quieter compare with US students, he believes that being thoughtful could still be a good trait for learning. However, he would still try his best to encourage students to actively participate in class, as discussions are the best ways to induce knowledge exchange.

Moreover, Dr. Fan also hopes that students could be more far-sighted instead of narrowly pursuing a high GPA. The purpose of tertiary education is to develop skills in critical thinking and in the long term, make the world a better place. Solely focusing on exams and assignments would bring nothing new to the world. It is only through perpetual thinking and learning, the world could improve. Dr. Fan hopes students could be more aware of their surroundings and try to apply theories they have learned to better understand these phenomena. Preferably, try to amend the present with new ideas.

As a novice scholar equipped with practical experience in the industry, Dr. Fan is looking forward to conducting research on down-to-earth topics such as blockchain and accounting and finance. In the future, when he has developed a more thorough understanding of accounting, he may consider engaging in cross-faculty research collaborations to dive deep in the ocean of knowledge.

Marketing as an ever-evolving subject

Although Dr. Du majored in economics and finance, a string of fortuitous occurrences has eventually brought him to marketing. Through a chronic process of attending marketing seminars and experiencing the joy of using economics theory in his marketing electives, Dr. Du started to believe that he has a perfect fit with marketing. Dr. Du believes that marketing is a very lively subject to study. The market changes quickly, that the best sales strategy today would be obsolete next year. This has not only supplied an endless stream of questions to research but also encourages collaboration between scholars and industry practitioners. Therefore, Dr. Du believes that studying marketing could allow one keeping pace with the world.

Although the private sector also has its research teams, Dr. Du believes that tight deadlines and hectic work pace are unconducive to knowledge creation. Dr. Du enjoys being intellectually challenged, he wanted to focus on a specific topic deeply. In addition, he observes that the private sector rarely provide opportunities for researchers to revise and improve unsatisfactory projects. Dr. Du believes that failure is not necessarily the end of a program. It may offer researchers a deeper understanding of the subject matter and allow researchers to investigate them from a different perspective on their next try. Given these concerns, Dr. Du had chosen to develop his career in academia.

To beat the postgrad game

For students interested in becoming a scholar, Dr. Du recommends them to attend more seminars for research insights and seize every research assistant opportunity in order to experience the researcher’s life. Dr. Du observes that students often choose research topics in order to follow the footsteps of their idol scholars. But what your idol is working on may not necessarily be your interests. Dr. Du argues that being passionate about your research topic is very important to keep you moving on amidst repeated failures. As failure in research is common, Dr. Du recommends students should work on several projects in tandem. In case one of your projects has met a dead end, you can immediately hop onto another one.

To provide more background information to students, academia is a very generous place for knowledge creation. It encourages scholars to keep polishing and adding on their existing research for an unlimited time until it is published. This explains why some scholars could keep on working their PhD papers years after they have finished their postgraduate programme.

During the interview, Dr. Du had also debunked the misconception that scholars do not need people skills. Dr. Du points out that as the focus questions in marketing are not clearly identified, scholars have to pay extra effort in persuading industry practitioners and other scholars why their research matters. Moreover, good communication skills are important in the creation of readable papers and to deliver your message clearly on different occasions.

A remarkable experience – Why hiding information is conducive

One of the most remarkable experiences for Dr. Du is his sharing in a Boston symposium. As a short summary, Dr. Du concludes that platforms that seek to match two sides of users need not provide perfect information to its users in order to minimize competition. For example, users of lodging platforms are exposed to both vertical and horizontal information. Vertical information is very general and would usually be goods preferred by most users, such as Wi-Fi and air-con. Horizontal information, on the other hand, is very specific and stringent, referring to location, interior design, and transportation network. While everyone wants Wi-Fi, not everyone wants to live in Kings Road.

While everyone wants the perfect house, the sad reality is that the supply for the perfect good is scarce no matter how many vendors a platform has. Providing too much vertical information for users will also create a false competition that everyone is competing for that particular house with Wi-Fi in Kings Road. As users expect platforms can deliver services instantly, competition among users is undesirable. Therefore, Dr. Du suggests that platforms should let the horizontal information guide the selection.

This research finding has drawn the attention of a representative of a venture fund specializing in investing lodging platforms. Receiving recognition from cross-sectoral talents is rewarding, as it implies that his research has its value in real life.

Coaching doctoral students – Reverse engineering

Communicating with industry practitioners is important for scholars as it allows them to attain firsthand information and keep themselves researching on matters relevant to the world. Dr. Du is honored that he has the opportunity to coach two leading executive figures in their doctoral degree in business administration.

Dr. Du believes that experience is a reverse engineering process. On one hand, Dr. Du is teaching them how to utilize different economic models to calculate the rate of return of digital marketing under a given set of variables and assumptions. On the other hand, he is also learning a lot of industrial insights from them. This is particularly useful to Dr. Du as he is currently researching on how to improve business communications.

Business communications are important as different specialists in a company have their own sets of jargon. Ineffective communication could be costly. For example, if the engineers cannot effectively tell the marketing team what they can or cannot do, while the marketing team cannot effectively tell the engineers what customers want, the end product will be totally irrelevant to the market demand. We see large corporations such as Microsoft have developed their own language manual in order to facilitate inter-company communication. However, it takes a lot of effort to learn a language, and the language is only useful if all parties can understand it. People are realistic and if they believe other parties are not putting in enough effort into learning the language, they will lack an incentive to learn it and the internal language system may collapse. One of Dr. Du’s current project is on studying when the introduction of an internal language system can improve communication and firm advantage, and how a firm can incentivize each party to put in the adequate effort. It is therefore very important for marketing scholars to work closely with industry practitioners in order to create knowledge that will be conducive to their actual operation.

The quantification of marketing

While not everyone looks forward to becoming a scholar, students nowadays are keen on taking a second major to increase their competitiveness in the market. In that regard, Dr. Du recommends students to major in statistics or computer science.

Dr. Du observes that the market’s demand for talents sensitive to statistics and programming is growing exponentially. Marketing talents are not only expected to make strategies through business intuition or past experiences but also using more scientific methodologies to substantiate their claims. Managers nowadays are also increasingly keen on developing their data acumen in order to establish their own views when reading data prepared by their analysts.

Marketing is no longer a talking subject. It is incorporating more and more multidisciplinary knowledge from the fields of psychological science, economic models and statistical knowledge. Students must, therefore, work harder on their numerical reasoning in order to excel.

Knowledge sharing: Competition behaviors among hegemonic platforms & A case study on effective and ethical pricing

Platform competitions and pricing are hot topics in marketing. In order to facilitate students in their studies, we have capitalized on this opportunity to seek advice from Dr. Du in these aspects.

Can regional hegemons invade the market of another regional hegemon and win?

Regional platform hegemons are platform companies so entrenched in their regional market that their dominating status has become unchallenged. However, can the hegemon in Asia beat the African hegemon in its own market? Dr. Du believes that it is possible in three ways.

First, a regional platform hegemon’s rise to power is likely because of a network effect. They have become a natural monopoly because they have entered the game so early that they have the time and resources to capture the first batch of vendors and buyers. When time-lapse, it will create a snowball effect, making them more and more reputable and large in the market. Creating a situation that they are THE best platform in the region. However, Dr. Du believes that the market structure of platform companies allows multi-homing to take place, referring to the situation that customers could afford buying the services of multiple platform companies in tandem. For example, mainland customers could purchase goods from both Taobao and Tianmao.

Second, companies can compete through specialization. Using Craigslist and Airbnb as an example, while the former is an ad platform advertising all kinds of residences, Airbnb focuses specifically on lodging services. Specialization has enabled Airbnb to stand out while indirectly competing with Craigslist.

Lastly, companies are free to adopt different monetary strategies to entrench in different niches and market segments. For example, Tidal and Pandora are both music streaming giants in the North American market but they focus on different customers. Tidal, for example, provide high-quality music without any ads interruption. As a result, it requires customers to pay subscription fees. Pandora, on the other hand, relies heavily on ads income. Therefore, they have opted to provide free services to customers while forcing them to sit through ads. While both are delivering the same services, both are not competing head-to-head with each other as they are targeting customers with different preferences.

Effective pricing and ethical business – A Japanese case study

About a century ago, the CEO of a renowned Japanese retail chain had stated that the market value is unable to reflect the real value of a product and the company will only charge above the cost price. Moreover, even during the Fukushima earthquake in 2016, the company did not mark up the price of their bottled water.

Regarding pricing, in order to encourage students to study marketing in a more scientific manner, Dr. Du believes that students should emphasize on the incremental value of goods and services. If your competitors are charging at 2 dollars and if you can provide an extra value (increment) of 3 dollars, you can charge at 5 dollars. Pricing is beyond supply and demand. Companies not only have to take their competitors’ strategies into consideration, but they also have to be aware of consumers’ pursue of fair pricing. For example, assuming that the functions of a cell phone and an iPhone are the same, it is rational for the retailer to charge both at the same price. However, if consumers discover that the cost price of a cell-phone is 30% lower than that of an iPhone, they would demand the retailer to mark-down the cell phone.

In addition, pricing strategies is to a large extent based on cost structures. Using Walmart as an example, as they purchase in bulk, they could always get the best price from suppliers and charge at a low price. However, if your cost structure cannot afford that, it is better to highlight service experience and product quality instead.

Lastly, about ethical business, Dr. Du argues that doing business is not a one-time game. You have to develop your reputation as your business is expected to continue for years to come, and you want your customers to keep coming back. While CSR may not have a direct impact to support company performance, it is an effective way to avoid being antagonized by social groups.

Way forward

Dr. Du felt very impressed with the strong business acumen that HKU students possess. Comparing case analysis made by MBA students and the undergraduates from his introductory course at HKU, Dr. Du is shocked that the undergraduates are sometimes performing as good as the MBA students. The only thing he felt a bit disappointed is that many undergraduates took marketing because they considered that it’s for those who are bad at mathematics. While Dr. Du is willing to teach them step by step, he hopes that they could muster up the courage to face their inner demons.

Other than nurturing students’ numerical reasoning skills, Dr. Du also hopes that he could contribute to HKU by producing more high-quality research on platform sales. In the long run, he hopes that he can put his practice into work by consulting platform giants such as Alibaba.

The newly launched Alumni Corporate Ambassador Programme (Programme) bought alumni Teddy Liu (MBA 1998) and Udara Senevirathne (BEcon&Fin 2017) together. Though belonging to two generations and sharing different backgrounds, they become colleagues both working at New World Development. We recently had a chance to sit down with them and talk about the Programme.

As the General Manager of Corporate & Talent Development at New World Development, Teddy recalled his MBA journey over 20 years ago, and shared his passion towards nurturing the younger generation. “Young people are very talented, but they need more coaching so they can excel at their work’, said Teddy. Wearing on his another hat as the Founding President of HKU Business and Economics Alumni Association, Teddy expressed his devotion to the Faculty: “it is my honor to be the alumni representative. I am calling all FBE alumni to support this meaningful Alumni Corporate Ambassador Programme, and contribute to our alma mater”.

Originally from Sri Lanka, Udara successfully started his career as one of the few elite international Management Trainees at New World Development. “The Faculty offered me the opportunities to learn business in the backdrop of a world-class city, and it also prepared me to move into an ecosystem of the huge corporate world,” Udara said, “with the support and guidance from mentors and senior alumni, an international student like myself can blend in perfectly and develop my career goal here in Hong Kong. I am very grateful. This Alumni Corporate Ambassador Programme provided me with a great chance to give back to the Faculty, and to work with fellow alumni to empower the FBE community.”

Interested in joining Teddy and Udara to become FBE Alumni Corporate Ambassadors?  Please visit www.hkubs.hku.hk/go/aca for more details.

Dr. He Michael Jia, Assistant Professor of Marketing, Faculty of Business and Economics, has won the Research Output Prize (ROP) 2018-19, which is a Faculty-based award to honour the best research output from each Faculty.  This year, ten Research Output Prizes are conferred on the authors by the Faculties. 

The paper earned Dr. Jia this award was "Do Consumers Always Spend More When Coupon Face Value is Larger? The Inverted U-Shaped Effect of Coupon Face Value on Consumer Spending Level", which was published in the Journal of Marketing in 2018. While it is commonly expected that a larger coupon face value would incentivize consumers to spend more, this paper presented the conditions in which the relationship between coupon face value and consumer spending level did not take a positive form, rather, it was an inverted U-shape.

The research made an important first attempt to examine how coupon face value influences consumer spending level in the context of using a coupon for different products within the same product line of a brand. The findings provided advices for marketing practitioners with a contingency approach for effectively managing the face value of a product-line coupon to avoid the negative consequence. Marketers can determine when they should offer product-line coupons with either a large or a moderate face value based on the research findings, depending on whether the relationship between coupon face value and consumer spending is simply positive or inverted U-shaped.

Reference:

[1] Research Output Prize Winners 2018-19

[2] Jia, He, et al. "Do Consumers Always Spend More When Coupon Face Value is Larger? The Inverted U-Shaped Effect of Coupon Face Value on Consumer Spending Level." Journal of Marketing 82.4 (2018): 70-85.

From Literature to Finance

How Dr. Fang becomes a scholar in finance is a tortuous path. While Dr. Fang is interested in literature and history, life had cracked a joke to him by making his dream university admitting only non-arts stream students from his home town that year. As economics is relatively close to his interests, Dr. Fang has become a business student. This has turned out to be a wise choice, as it enables Dr. Fang to meet up with his mentor, Professor Lu Ming down the road.

‘Professor Lu Ming is a very passionate scholar. Interacting with him has stimulated me intellectually. He has a strong power to encourage people to follow his footsteps. That is why I would want to become a scholar.’

In addition to the influence of his mentor, the academic culture of his Alma Mater has encouraged intensive and fruitful discussions on the macroeconomic issues and structural problems of the Chinese economy. Dipped in a hotpot of knowledge for 4 years has eventually transformed Dr. Fang into an enthusiast of knowledge creation.

When asked whether he has thought of venturing to the private sector someday, Dr. Fang believed that academia has a better fit with him. Being a scholar is free. The academia grants you full liberty in choosing your research topic. It is something the private sector could hardly offer.

The puzzling exchange rates

The exchange rate is a heated topic in the press almost every day. While it draws attention from all sections of the society, we are still far from understanding of exchange rate movements thoroughly. It appears to be related to everything but at the same time, it seems to move on its own—disconnected from most fundamental variables we can think of.

Newcomers in the realm of research are always preying eyes on puzzling questions. The first research paper produced by Dr. Fang is to investigate the relationship between financial intermediaries and the exchange rate. Dr. Fang observes that the institutions are dominantly involved in the foreign exchange. These institutions are different from what traditional literature described as representative agents. Different institutions have their own behavioral patterns and they are subject to their own constraints. How these diverse institutions impact the exchange rates is something Dr. Fang really interested in.

Preferences for real-world research

As a researcher specialized in macroeconomics and finance, Dr. Fang has been paying attention to news featuring changes in the financial markets. Dr. Fang points out that as scholars research real-life issues, their research focus should also change flexibly in tandem with the real world. He has strong interests to interact with market participants, policymakers and regulators on how they think and view the market. These will be valuable experiences for him as a scholar and as a curious person. Meanwhile, he wishes to contribute his wisdom to society through these interactions.

Learn naturally, teach naturally

Despite Dr. Fang will only start teaching in the second semester, he is no stranger to pedagogy. When Dr. Fang was studying his PhD in the US, he had been a teaching assistant responsible for small class sessions that encompassed more than 90 students. Dr. Fang considered in-class activities fun and interactive.

Unlike secondary school where the teachers will keep pursuing you to hand in your assignments in time, the University gives students free reigns over themselves on resource allocation. There is no right or wrong on how one decides to spend their time but the key is to know what you want in life. The 4 years of undergraduate studies are the best period to fathom your future. Believing that your life is your own, Dr. Fang prefers to encourage the students to find their own path.

How to excel in undergraduate and postgraduate studies

Being good in an undergraduate does not necessarily mean that you are fit to be a researcher. Postgraduate research focuses on a very narrow topic for you to dig deep. Unlike undergraduate, studying postgraduate research allows you to read a wide range of literature and communicate with all the great minds. Dr. Fang observes that a lot of high performing undergraduates often cannot bear the boredom of performing repetitive and monotone tasks, such as drawing all the possible variations of an economic model you developed and dealing with tedious data details.

In addition, the research could be painful, long, and lonely. Sometimes not even your adviser can help you as you are the pioneer in that particular subject. Therefore, it is important to find someone to work with, or at least have someone to talk to in order to reduce the loneliness. Dr. Fang also stresses that failure is often. While sometimes you can turn failures into success, sometimes you cannot. If you cannot reverse the situation then let it, it is already a sunk cost. Failure and success cannot be compared on equal but it is definitely a part of life. No man can escape and should escape from failure. All we have to do is to maintain a peace of mind.

What to do After Getting Your Grad Job?

Dr. Fang believes that while different people make very different choices in career paths and lifestyles, fresh grads should always keep learning and educating themselves as it is beneficial in the long run. 

Dr. Fang emphasizes that we are living in a world of great changes and knowledge evolves so quickly. What students learn in universities can grow out of date quickly, but the ability and desire of lifelong learning are what really keep them with or even ahead of the rapid changes. After all, knowledge insignificant today may be useful and important in the future.”

Way forward

Been through the process of postgrad and undergrad, Dr. Fang greatly understands the difficulties students are facing. Therefore, joining HKU, Dr. Fang aims to utilize his experience and give a hand to students at all levels. In terms of research, Dr. Fang hopes that he could contribute to the community and tries his best to produce quality research.