Based on textual analysis and a comparison of cybersecurity risk disclosures of firms that were hacked to others that were not, we propose a novel firm-level measure of cybersecurity risk for all U.S.-listed firms. We then examine whether cybersecurity risk is priced in the cross-section of stock returns. Portfolios of firms with high exposure to cybersecurity risk outperform other firms, on average, by up to 8.3% per year. Yet, high-exposure firms perform poorly in periods of high cybersecurity risk. Reassuringly, the measure is higher in information-technology industries, correlates with characteristics linked to firms hit by cyberattacks, and predicts future cyberattacks.
Professor Michaely is a professor of Finance and Entrepreneurship at The University of Hong Kong. Before that he spent a significant portion of his career as The Rudd Family professor of Finance at Cornell University and Cornell Tech. His teaching include Corporate Finance and Entrepreneurial Finance for MBAs, executive MBAs, DBA and PhD students. Professor Michaely’s research interests are in the areas of empirical corporate finance, corporate governance, entrepreneurial finance, and FinTech. His current research focuses on how frictions in capital markets affect managers’ corporate decisions and new product developments; with a particular focus on corporate payout policy, the effect of competition in firms’ behavior, and on the impact of Fintech on capital market efficiency. He was recently recognised as one of the most prolific researchers in finance with over 25,000 citations.
His research has appeared in such scholarly journals as the Journal of Finance, Review of Financial Studies, Journal of Financial Economics, Management Science, The Review of Finance, and Journal of Financial and Quantitative Analysis. His research has been frequently featured in the Wall Street Journal, New York Times, the Economist, Investor’s Business Daily, Bloomberg, BusinessWeek, Forbes, Barrons, Money, and others. Prof. Michaely has given over 200 invited research talks, conference presentations and key-note speeches around the world, and is working with scholars from Asia, the US, and Europe, on research in corporate finance. Professor Michaely collaborates on research projects with many research scholars from Asia, the US, and Europe.
Professor Michaely’s research has also received many awards and honors. Awards include the 2020 Review of Finance best paper award, the 2017 Distinguish research award of the Eastern Finance Association, the 2005 Journal of Financial Economics Fama Prize for best paper, the 2000 Journal of Finance Smith Breeden Prize for distinguish paper, the 2000 Western Finance Association Award for the best paper on capital formation, The Review of Financial Studies 1999 Barclays Global Investors/Michael Brennan Runner-up Award, the 1999 Western Finance Association Award for the best paper, 1996 Quantitative Alliance Group Prize for best paper, and the 1996 Western Finance Association Award for best paper on investments.
Professor Michaely is a co-founder of Gina Life, a medical devise startup, and is currently on the board of Tipranks, and on the advisory board of Mogul, Hyro and Nielsen Innovate. He was a director of the Israeli Securities Authority (ISA) from 1998 to 2003, and was the chairperson of Tachlit (mutual fund) investment committee.
- Empirical Corporate Finance
- Corporate Governance
- Fin Tech
- “Cybersecurity Risk” (with Chris Florackis, Christodoulos Louca, and Michael Weber). The Review of Financial Studies, Forthcoming, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3725130
- “Concierge Treatment from Banks: Evidence from the Paycheck Protection Program” (with Ran Duchin, Xiumin Martin, and Hanmeng Wang). Journal of Corporate Finance, Vol 72, February 2022, Article 102124, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3775276
- “On the Fast Track: Information Acquisition Costs and Information Production” (with Deqiu Chen, Yujing Ma, and Xiumin Martin). Journal of Financial Economics, Vol 143(2), February 2022, pp. 794-823, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3503441
- “Disappearing and Reappearing Dividends” (with Amani Moin). Journal of Financial Economics, Vol 143(1), January 2022, pp. 207-226, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3067550
- “Do Index Funds Monitor?” (with Davidson Heath, Daniele Macciocchi, and Matthew Ringgenberg). The Review of Financial Studies, Vol 35(1), January 2022, pp. 91-131, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3259433
- “FinTechs and the Market for Financial Analysis” (with Jillian Grennan). Journal of Financial and Quantitative Analysis, Vol 56(6), September 2021, pp. 1877-1907, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3136150
- “Signaling Safety” (with Stefano Rossi and Michael Weber). Journal of Financial Economics, Vol 139(2), February 2021, pp. 405-427, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3064029
- “Information Revealed through the Regulatory Process: Interactions between the SEC and Companies ahead of Their IPO” (with Michelle Lowry and Ekaterina Volkova). The Review of Financial Studies, Vol 33(12), December 2020, pp. 5510–5554, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2802599
- “Cultural Diversity on Wall Street: Evidence from Consensus Earnings Forecasts” (with Kenneth Merkley and Joseph Pacelli). Journal of Accounting and Economics, Vol 70(1), August 2020, Article 101330, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3068232
- “Owners’ Portfolio Diversification and Firm Investment” (with Evgeny Lyandres, Maria-Teresa Marchica, and Roberto Mura). The Review of Financial Studies, Vol 32(12), December 2019, pp. 4855-4904, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2234195
- “Consumption Taxes and Corporate Investment” (with Martin Jacob and Maximilian Müller). The Review of Financial Studies, Vol 32(8), August 2019, pp. 3144-3182, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2800146
- “Are US Industries Becoming More Concentrated?” (with Gustavo Grullon and Yelena Larkin). Review of Finance, Vol 23(4), July 2019, pp. 697-743, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2612047
- The 2020 Review of Finance best paper award (the Pagano-Zechner Award) for the paper: “Are U.S. Industries Becoming More Concentrated?”
- Distinguish Research Award, Eastern Finance Association, 2017
- The 2005 Jensen Prize for the best paper published in the Journal of Financial Economics in the Areas of Corporate Finance and Organizations; (for the paper: “Payout Policy in the 21st Century”).
- The 2000 Journal of Finance Smith Breeden Prize for distinguish paper (for the paper: “When the Underwriter is the Market Maker: An Examination of Trading in the IPO Aftermarket”)
- The 2000 Western Finance Association Award for the best paper on capital formation (for the paper: “The Making of a Dealer Market: From Entry to Equilibrium in the trading of Nasdaq Stocks”)
- The Review of Financial Studies 1999 Barclays Global Investors/Michael Brennan Runner-up Award (“Conflict of Interest and The Credibility of Underwriter Analyst Recommendations “)
- The 1999 Western Finance Association Award for the best paper (for the paper: “When the Underwriter is the Market Maker: An Examination of Trading in the IPO Aftermarket”)
"To lead the creation of the HKU Entrepreneurial and Innovation Hub in Israel is a truly exciting journey for me. I am looking forward to work with my excellent colleagues at HKU, to meet the students and interact with the business community in Hong Kong and China. I believe the innovation center HKU is establishing in Israel will bring significant benefits to all communities involved and I am very happy to be a part of this.”
Over the past three decades, the rise of passively managed index funds has transformed how Americans and other investors around the world invest. In 1990, index funds held only less than 1% of all mutual fund assets. By 2018, this had grown to more than 30%, which worth over US$6 trillion and now represent the largest shareholders of many US corporations.
Study by Professor Roni Michaely, Professor in Finance of HKU Business School and his co-authors reveals Index Funds put less efforts in monitoring their portfolio firms, resulted in power imbalance between investors and firm managements.
A recent research by the scholars from the University of Hong Kong (HKU) shows there are discernible factors that can indicate the relative success of a SPAC.
New research by Professor Roni Michaely and other co-authors shows that while Socially Responsible Investment Funds are good at picking firms that adopt such behaviours, they do not inspire those firms to further improve their performance.
Socially Responsible Investment (SRI) Funds have become popular in recent years as investors increasingly give weight to measures such as reducing pollution, maintaining employee and customer satisfaction and diversifying board membership. However, new research shows that while such funds are good at picking firms that adopt such behaviours, they do not inspire those firms to further improve their performance.