Date/Time
Date(s) - Fri 30 October
12:30 - 13:30
Location
RH 104, Rutherford House, VUW
Dr Justin Hung Nguyen is a Lecturer (Assistant Professor) at Wellington School of Business and Government. Justin completed his PhD in Finance from RMIT University in Australia, and MSc in Finance from University College Dublin in Ireland, and joined Victoria University of Wellington in October 2017. He was previously affiliated with RMIT University, Banking Academy of Vietnam, Central Bank of Ireland, Ernst & Young Vietnam, and a local investment bank in Vietnam. His current research primarily examines the effects of global challenges such as climate change, political uncertainty, or human capital risk on corporate financial policies and governance practices. His studies have been published in internationally recognised journals in accounting and finance, including Journal of Corporate Finance, Journal of Banking and Finance, and European Accounting Review.
Abstract:
Because the state right-to-work (RTW) laws weaken the bargaining power of labor unions and decrease firm leverages, we conjecture that RTW-treated firms are motivated to conduct more innovation activities due to the decreased financial distress risk. Our difference-in-differences analysis shows that the RTW strongly encourages treated firms’ successes in their innovation activities in terms of patent grant and citation count three years after its adoption. Consistent with our prediction, the RTW adoption also significantly decreases treated firms’ financial distress risk ex post, and its treatment effect on innovation is stronger for firms that are ex ante more likely to experience financial distress. Further analysis indicates that treated firms intensify in-house research and development expenditures as the inputs to their improved innovations, and as a result enhance their competitiveness in product markets. Collectively, our findings contribute to the bright side of RTW effects.