Finance Research Seminar – Dr Kai Li
Finance Research Seminar – Dr Kai Li
Title: Set in Stone: The Persistence and Origin of Corporate Culture
Date: 26 March 2025
Time: 16:00-17:00
Venue: FDC.1.17
If you would like to attend, please register using the following link:
Set in Stone: The Persistence and Origin of Corporate Culture
Speaker: Dr Kai Li
Dr Kai Li, a Fellow of the Royal Society of Canada (Class of 2022), holds the Canada Research Chair in Corporate Governance and W. Maurice Young Endowed Chair in Finance at the UBC Sauder School of Business, University of British Columbia. She is Managing Editor of Journal of Financial and Quantitative Analysis. Dr. Li’s research focuses on the economic consequences of corporate governance mechanisms. Her current research projects explore: (1) gender and finance, (2) machine learning in finance, and (3) bond ownership and creditor governance. Her research has appeared in Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Financial and Quantitative Analysis, Management Science, Journal of International Business Studies, and many other leading journals in Finance and Economics. She is the recipient of the UBC Killam Research Award, the Sauder School of Business Research Excellence Award (both junior and senior categories), and the Barclays Global Investors Canada Research Award, a Senior Fellow of the Asian Bureau of Finance and Economic Research, a Research Member of the European Corporate Governance Institute, and a Research Fellow of the FinTech at Cornell Initiative. She is on the Editorial Board of Journal of International Business Studies, Journal of Financial Intermediation, Journal of Financial Stability, and Pacific-Basin Finance Journal. She has also served on the Editorial Board of Review of Financial Studies, Review of Finance, Management Science, Journal of Corporate Finance, Journal of Banking and Finance, and Financial Management. Her research has been featured in Wall Street Journal, New York Times, Washington Post, Financial Times, The Time Magazine, Reuters, CNBC, Bloomberg, Dow Jones Newswire, New Yorker, BBC, BNN, CBC National, CTV National News, National Post, Globe and Mail, U.S. News & World Report, Harvard Business Review, and Yahoo! Finance.
Abstract:
We examine the evolution of corporate culture and trace its origin, differentiating the values and norms prevailing within a company from the preferences of corporate insiders. Leveraging one of the largest panel data sets on corporate culture, we first show that corporate culture is fairly stable: Firms with a strong (weak) culture tend to remain so for the subsequent decade. We then show that the majority of the variation in corporate culture is driven by time-invariant firm fixed effects, largely attributed to a firm’s culture formed around its initial public offering. Employing a rich set of founder, founding time, and founding location characteristics to explain a firm’s early culture, we show that a founder’s cultural heritage, the business environment at the start of a founder’s career or at a firm’s founding, a founder’s birthplace, and a firm’s founding location all have significant influences on its early culture. Finally, we provide some suggestive evidence on the presence of CEO-firm matching on cultural values as a possible mechanism underlying the persistence in culture. We conclude that the early culture of a firm, influenced by its founder, founding time, and founding location, is behind the persistence in corporate culture.