March 28, 2024

Corporate Culture and Machine Learning in Finance



Published May 15, 2023, 1:20 p.m. by Jerald Waisoki


When it comes to finance, there are a lot of different cultures out there. Some people believe that the corporate culture is the most important thing to focus on, while others believe that machine learning is the key to success.

No matter what your beliefs are, it's important to understand both sides of the argument before making a decision. The corporate culture can be a great thing or a terrible thing, depending on the company. If you're working for a company that values teamwork and communication, then the corporate culture can be a great thing. However, if you're working for a company that's all about greed and making as much money as possible, then the corporate culture can be a terrible thing.

Machine learning is also a very important aspect of finance. Some people believe that it's the future of finance, while others believe that it's just a fad. Either way, it's important to understand how machine learning works and how it can be used to improve your financial situation.

No matter what your beliefs are, it's important to understand both sides of the argument before making a decision. The corporate culture can be a great thing or a terrible thing, depending on the company. If you're working for a company that values teamwork and communication, then the corporate culture can be a great thing. However, if you're working for a company that's all about greed and making as much money as possible, then the corporate culture can be a terrible thing.

Machine learning is also a very important aspect of finance. Some people believe that it's the future of finance, while others believe that it's just a fad. Either way, it's important to understand how machine learning works and how it can be used to improve your financial situation.

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i

i just very much look forward to um

hearing your thoughts and feedback as i

will discuss and totally i can see uh

ray's hand so just raise hands and i can

let you ask questions so just like

michelle said um this culture is very

dear to us i guess personal experience i

was very lucky to be in a place with

great culture

so that i always think about exactly how

culture can affect corporate

uh

performance for example

so here let's motivate analysis also

just like michelle said this is in

everybody's mind so let's just motivate

that from the field so i just want to

highlight a number of ceos quotes

regarding culture so like

uh

so this is a formal ceo from ibm the

gastoner he talked about culture it's

the only game it's the only game and

also co-founder and ceo of costco that's

also this is the only thing so clearly

culture or organization culture or

corporate culture is very important

to

the to the corporate decision maker at

the very top including the ceos and also

the founders

what is also relevant to us is that

this is a quote from another co-founder

also navidia they talk about

uh

culture has to come from the top from

the tones and actions of its leaders

that's exactly where we're going to

measure corporate culture

did i already have a chat

oh no

so what is corporate culture it's

something it's a part of the grand

scheme of things the so-called

intangible so it's really you leave and

bracing it but might be just very hard

to capture so from ovhr

from management scholars culture is

defined as shared values and norms that

define appropriate attitude and behavior

for organizational members think you are

in a business school you're in a

corporation that's the shared values and

the norms within that particular

organization

moreover both management scholars and

also finance scholars have

come to the conclusion that corporate

culture is not static

it's dynamic but it's it's evolving

slowly evolving over time so it it you

can call that past dependent culture

comes from where it originally started

and culture can also be shaped by major

corporate events a event that is very

dear to michelle is going public no

doubt going public can change a

company's

culture so as a major uh deal making

like mnas

so does corporate culture matter from

the ceos yes

so but unfortunately we just do not have

a lot of large

large sample evidence about cultural

matters

so from management scholar from the

theory perspective uh

management scholars argue that culture

matters because in employees face

choices without guidance without right

incentive scheme um culture could

properly regulate uh employees so later

i'll talk about during covey how culture

matters so that's exactly um

in the second half of this presentation

of presenting empirical evidence that

firms with a strong culture now

surprisingly just like firms engage in

esg and the like that they are

they outperform their peers so later

i'll talk more about that

so what motivate this work is really

just because everybody thinks culture is

so important like empirical evidence

mainly from questionnaires and the

surveys

so that

there's really not that simple evidence

because it's just so everybody feels

about it but just so hard to measure it

so what is the methodological innovation

of this paper is to use machine learning

techniques i'm i read michelle's paper

as well so we all got on that bandwagon

of machine learning so we're using word

embedding model

so that's a technique and i'll talk more

about that and the corpus we use so

places we try to capture corporate

culture is what ceos are saying during

earnings costs to matter corporate

culture

so for some of us who have done research

familiar with earnings calls it

typically involved top executives so

primary ceos cfo ceos and and the like

that they speak to analysts and review

so many talk about what they have done

to justify their performance and provide

guidance for future but in between

what this we are talking about it will

reveal the set of values that are

important to a company remember the uh

jensen once called from the video the

culture and culture is really come from

the top

but then how do we how do we get started

we start from

uh another prior work of us uh before us

that's fuso ital

they look at s p 500 firms so the

largest companies in the us look at

their website and look at so at a

particular point so early to uh 2012

also they look at what values those most

successful firms promote on their

website

and they came up with non-values and we

just going to use the top five

most mentioned values among the largest

companies in the us

so given that we introduce a new method

so it's important oh damn just moment

so how do i let attendees speak done

okay

more

can can you talk how do i make

uh dan can you talk now

um

yes can you hear me

uh hi

i want to uh

i wonder how to distinguish between uh

culture and employees bargaining

position like in your uh korean writing

case maybe in these firms the

employees are have a small part are more

powerful so they can ask the company to

provide more for them

which is different from culture that's

no that's a great one i think that part

you most likely you will great question

that most likely will get it from

glassdoor when employees really have a

free space to speak you remember

the places i'm measuring culture is not

even from 10k it's from q and a's so q

and a's are where ceos answer questions

from analysts it's just highly unlikely

uh analysis might ask yes she related

approach but it's just not going to be

the major one if you have seen enough

um

earnings called transcripts i think it's

going to be gaining more attraction

going forward but at least in our

setting

um that's not going to be a dominant

effect remember what i'm also going to

cover is because this is a new method

and also it's a new place to score

culture try to be convincing we need to

do a lot of validation

okay thank you yeah

but what you said correlated with

respect and teamwork and integrity it's

they are correlated a lot of the

positive attributes are firm yeah

so that's what we're going to do so we

start with somebody else has done uh

like and also very credible which is sp

500 firms what values they promote et

cetera we're just going to extend that

in in mass you know like large sample

over time we can build a panel data by

the way so the data we have is a little

uh it's available upon request

so here we are so also

related to dan's question right if we

start if we start like uh without some

deviation of what we have in mind we

might end up into not capturing culture

but something else so here is a total

transparency so this is a cut paste from

gilso it how jfe paper so remember so

these are the top five values they

identified from sp 500 firms so how do

you rate those five points so the first

one is like so that's what we're going

to capture the five values so integrity

teamwork innovation respect and quality

but what they also did uh something in

machine learning we call that a seed

word they actually did manually is to

look at um

about the integrity what are other words

companies also come frequently use to

support their claim about they care

about the integrity so the words after

integrity we call that with those seed

words so like teamwork really

straightforward there's only two

supporting o explanation for what they

make they mean teamwork it's

collaboration and cooperation so there's

only two seed words for that

what i also highlighting in yellow is

actually the words that show up on sp

500 the website they actually do not

show up that often

in earnings call or they show up in

earnings call for very different meaning

has nothing to do with integrity but

something else for example so those

yellow highlights we will exclude

ownership during earnings cost ownership

is really just about the share our

shareholder base has nothing to do with

integrity so we drop that to reduce some

noise

uh in our measure

so what is the wording vending model uh

so this project uh we started this

project almost four years ago so i think

now many people are doing what embedding

just in case uh for information so what

is the word embedding is just uh based

on a very uh

well established concept in linguistic

that is words of similar meaning of

means synonym tend to happen adjacent to

each other in a document so positive

words tend to cluster around each other

in a in a document and vice versa

negative words

so what we do in uh in large scale is to

use

the entire coppers which is earnings

calls

to develop what we we call the culture

dictionary so the key words that define

the values such as integrity or the

keywords that define the values such as

teamwork

so what inviting is allow us

to find those synonyms by vector

vectorizing

each word into a vector like 300 by one

vector and those vectors just capture

the frequency of the neighboring words

and those neighboring words essentially

explain the key word but once we

vectorize each word by a vector we can

do a vector representation and to find

the cosine similarity and we can extend

and through that

cosine similarity we can expand to

to build our own so like basically

create our own dictionary

of similar words of similar meanings

synonyms so that's what we do

that is uh we think integrity is

important but to score by the ibm has

high integrity which i need to develop

the dictionary that all the words that

relate to integrity and ibm use those

words a lot let me define that uh let me

come to the conclusion that ibm has high

integrity of course they're always us

concerned about the claimed value versus

what's actually going on so validation

becomes very important

so here just shows like a poor example

that there are three words assuming

you're not using a dictionary assuming

you have no knowledge of those three

words so suppose there are three words

called collective partnership and

governance we want to find out

how similar they are in meaning so what

we do is to go to a body of text to look

at the neighboring words around those

three words

and uh to then we get then we get a

vector representation for the three

words then we do cosine similarity to

define uh

uh to identify synonyms so here we are

so suppose the objective is to

understand the relation between these

three words so our ultimate goal is to

get a

dictionary of words say for integrity so

here assuming a toy example we want to

find the meaning how related the three

words are so we go to a body of text we

find it for collective uh the

neighboring words counts so horizontally

the first row so neighboring words

counter is like shear fruitful joint

oversight proper

and therefore partnership governance we

get all those counts so once we have the

three vectors we can do uh for e for the

meaning of each word based on the

frequency of the neighboring words we

can do a cosine similarity then we

realize

collective and partnership their

cosine similarity is higher than

collective and governance so that

suggests that collective is a closer

synonym for governance and partnership

so that's just a toy example

in reality world inviting is pretty well

established in computer science to

implement

so and it's so versatile that previously

people just use unigram like one word if

you do word inviting carefully you

actually can capture

phrases and idioms that really define a

particular

value so for example here

for innovation in our

you know our own dictionary words for to

define innovation capture innovation

when manager talk about say pushing the

envelope we know that is highly

correlated about their intent that the

firm is innovative

so like teamwork uh so there's a hundred

so like idioms could also be captured

through word embedding

so here for sanity test so first of all

to see just like the question before do

we capture what we intend to capture or

we just capture noise so here just

showing you under so remember our goal

is to score a company in five dimensions

say ibm is ibm innovative or is ibm high

on teamwork so here just showing you in

other so this is just like the culture

dictionary and we show you the top 30

words that define each value so for

innovation the top one is creativity the

innovative innova innovate etc

so that's just like to show what we are

doing

then in order to score a culture

given that earnings costs are frequently

done at quarterly frequency so each firm

will have multiple earnings calls so

we're just going to take a annual

frequency count of the frequency those

words i show you in the previous slide

for each firm year and just in case

there are any noise or volatility in

earnings called discussion of ultimate

measure is based on a three-year moving

average uh for

four particular firms a annual

copy corporate value score

so just uh like

so think about where we are today we are

in a knowledge economy so innovation

quality human capital intangible are the

passwords in everybody's mind so not

surprisingly so this just shows the

scope of our data which is

firm and the year so it's so from 01 to

2018 at roughly 2018. so here just shows

the raw scores for the sample so

a high level summary is that

innovation is the most frequently

mentioned the value

while this is again is during earnings

cost so integrity is at least the

frequent dimension the cultural value so

that's just like a first impression then

we also just like my response a moment

ago you can imagine because this is all

corporate values they are our virtues so

now surprisingly they will be positively

correlated that's indeed the case

and

innovation and the quality has the

highest correlation close to 0.5

while innovation and the integrity is

the lowest about point one so these are

some summary stats uh like just to help

you understand exactly like getting some

understanding what we are doing but

could

like whether it's consistent with

intuition for us this is consistent with

our tuition is that quality and

innovation would also go hand in hand

what is we also want to show is uh for

some of you you're doing cultural

research on national culture we know

that

national culture also slowly evolving so

here in a very dynamistic economy like

u.s we want to show that culture

so firms corporate culture evolve over

time as i mentioned before shaped by

going public shaped by mnas and also

firms could excel in multiple dimensions

of culture so this is just like an

overview of what i i'm saying so our

sample is like 21 years what we did is

divided 21 years into three

seven year period

and then so this shows among top

five top um sp 500 firms

um what are the firms that score high

along those dimensions uh so

so across industry and also over time so

i'm highlighting a number of them so the

blue box shows procter gamble so we know

that is consumer goods uh conglomerate

they excel in innovation across all

three periods of uh the sample period

and this so they basically always top

10 firms along innovation

in uh yellow box i saw i saw salesforce

so a company like salesforce could also

excel in multiple dimensions of

their values so that's innovation and

the quality yeah so this just shows that

a firm can outperform their peers

consistently but there's also changes

over time for firms to be in and out of

the top performing list in terms of

culture and firm council can excel in

multiple dimensions

what's really also revealing for us is

we also sort

provide a time series plot across 12

industries and in the we are still in

the in the public health crisis so this

shows that for health care industry

among

pharma french 12 industries they really

stand out in terms of integrity and also

teamwork

to us this is consistent with our

intuition people in that in that

particular industry these are the really

important attributes for success and

also important for us as customers to

that industry

so

i had the first question before that

from then that

how do i know i'm measuring what i

intend to measure and this is a very

valid concern that is we all know

there's a in finance we know there's a

window dressing so there's always

concern that what they say especially

management is not what they practice

so

we're going to address that concern in

multiple dimensions

so the very first thing is to validate

our measure using some well established

markers for best practice a simple

example is innovation there's so much

work have done in innovation there's so

many different matters for corporate

strengths in innovation including their

number of patents citations expenditure

as well as

scoring of a firm's r d strength like

used to be called kld

so that's like one place we're going to

uh

to look into is cross-validate look at

the known markers for innovation and to

see all those known markers are the

highly correlated with our score for

corporate culture innovation

so the other thing that we're going to

do is uh the other thing we're going to

do is we know that earnings call could

be just a show but the earnings call has

two components one is presentation so

prepared remarks

where gaming or claim or otherwise

advertising a particular value is more

likely but

well q and a is like just spontaneity

it's hard but as again earnings call is

really for firm to justify what they

have done and what they will be doing

earnings call venue is really not a

place for firm to promote culture uh so

all provided promote their virtues so

that's also another reassuring factor in

our analysis

so here just showing you a bit of our

validation of apologies for this really

not great uh size the font so here like

for quality so left hand side so the

variable quality is our score the

product quality safety

from kld top brand from a marketing

company so we see consistent correlation

across two out of three matters

then for respect again we rely um a kld

for diversity but also from the ranking

of best employers and to get a

validation

and what i also want highlighting

okay because i changed the font

so uh innovation so innovation we really

want to highlight is that our measure is

so comprehensive it capture corporate

innovation beyond the europe matters

like patents aren't spending

uh innovation strength is from kld so

for some of us who do research

innovation they know that there's severe

missing data problem for r d expenditure

like 40 of firms has missing information

on that and for patents maybe like

majority of the firms do not have any

patents so in our case our innovation

measure is based on any firm who holds

earnings cost so we have far more

comprehensive measure for that

oh great

so

yes uh just a moment

hi kai it's michelle um can you hear me

yes ah perfect very well i was wondering

just out of curiosity have you looked at

whether your measures predict what would

happen in the future so i could imagine

a firm talking about innovation

if they wanted to start becoming more

innovative or talking more about

integrity if they were

like worried that oh you know some

analysts it's you know expressed doubt

we need to

beef up on this measure it could be a

signal of things to come

that's a great question we didn't look

at that because we were so worried just

to like try to be convincing i'm not

totally convinced but no no no but there

are there are issues michelle you asked

that's a great one that is um so they're

always concerned about aspiration versus

what they do so culture to be honest

there is aspirational component

right like we all know that like our

school aspire to do so and they put on

that that's our values right exactly but

it might be that you could use this to

your benefit as well right because as

you highlighted in the beginning culture

is dynamic it does it's not just static

over time so if you could use your

measure

perhaps you know with the word bundling

approach you know what other words occur

around it you might be able to capture

some of those dynamic aspects in ways

that would be really cool

yes yes duly noted uh we didn't do that

but so also it's very hard is you know

that what what you just suggest is

predictive that's great but still i mean

beyond corporate finance is uh

industriality is all over the place so

right so the analysis in this particular

project is just established association

but you're right yeah no i totally

understand yeah

yeah so some of the analysis later will

show a little bit of predictive but

that's a corporate event which means

culture congruency

associated with deal uh incidents

but that's just events i like uh instead

what you have in mind but what you just

said it's also a little bit tricky

because of data that is my innovation

measure uh is any firm has earned its

call i would have like six i have eight

to nine thousand unique firms but in

reality innovation especially like

pattern producing corporations only like

the largest ones

so for the smaller ones we might still

not and also you know that's also i just

claimed our measure is a broader than

the euro matrix which um narrow and

rewarding largest firms so if you had

better data on innovation or analysis

doing more surveys etc maybe there will

be even close a tighter connection as

you have suggested yeah

yeah anyway it's interesting thanks

thank you no so you see we we do have

trouble like integrity as well how do

you like validate the integrity so we

just have to be quite creative to use

like

like the the opposite side like firm has

a track record of receiving the all back

dating yeah

yeah

now that makes sense

so um

so that was just like cross-validation

but like what we also do is we are not

the first one at the same time people

also other people thinking to matter

corporate culture so what we want to do

is to make sure our measure is

relatively clean um is to

entertain alternative ways or mandarin

culture the very first one which is very

easy for us our main measure is based on

q and a because spontaneity less likely

to be window dressing so the alternative

measure is to use the full cup which

including prepared

remarks which is the so-called

presentation part

second is why go out why uh like

go

uh take a machine learning route if that

gilso is how in their gfe paper already

listed

uh the values and also the seed words so

another

alternative approach is just do a simple

count of the words uncovered by kyuso

ital and see how they perform relative

to us using machine learning approach

third is that uh earnings call um

earnings call is to analyst so firm also

has other

dissemination channel michelle also used

that in her work like uh prospectors

annual reports so annual reports so why

not just look at annual reports where

managers has a management discussion

analysis that's commonly used

in accounting research so we could also

score culture just using a partic

particular section section 7 of 10k

um so here oh so this is just showing

you uh so we run a horse race so just

give you an example because we have five

measures we just use one here that is

innovation so there are four different

measures of innovation so this one is

from us the rest alternative approach we

look at the strength of correlation of

our measure versus

uh

the alternatives this uh in relation to

the common markers for innovation so

that's like number pattern spending and

innovation strength from kld so you see

that

culture mattered elsewhere uh they they

actually showed up negative correlated

with the common markers of innovation

but that's also who knows like maybe

people can also argue patterns aren't

expanding not the full picture of

innovation so that's that's aside that's

not our concern uh here

so the other we also in addition to use

different method different corpus

like textual data we also do

um

like the question before uh there are

more data now is from what so right so

earnings call is what top people saying

about their values how about the rank

and file employees at the bottom say

about their firm of course bearing in

mind the glass door is the prerequisite

for glassdoor is you have to some

typically are people looking for jobs so

there might be some negative influence

there but for us when we started four

years ago i do not know today

glassdoor's coverage is relatively

patchy as compared to earnings call

which started in early 2000 due to

regulation fd

so that and for textual analysis we need

a lot of data so that so-called story is

a little bit out for us

lastly we what we did our method is

create our own culture dictionary by

using word embedding to find the synonym

another very uninformed but also

powerful uh textual analysis um is

actually uh topic modeling so just you

only uh

you only need to tell like say say

earnings call you only need to say

uh i pre-specified there's going to be

30 or 50 topics uh in earnings just give

that and

and you get the output about topics so

here we tried from

20 to 200 topics we have that in the

internet appendix you just look at the

word cloud which give you a rough idea

about what the key

uh things uh in earnings calls for us is

mostly about performance really not uh

so if you do a very

non-supervised machine learning with our

approach is semi-supervised you do not

get what you want to capture which is

culture

but that's also a good thing it means

unintended consequence of earnings for

us because we have some guidance we are

able to capture culture it's unintended

managers are really not with the full

purpose to promote certain values so

that help us to some extent

so the application we did

is to you look at the mnas so there's so

much work done in mnas about sources of

synergies and the drivers of m a's the

one area we want to look at is called

culture feed so we want to look at

acquire a target firm among those five

cultural dimensions are they close or

they are further apart so you can have a

story of substitution or complementarity

uh that's the same same like in real

life about finding a partner like do

people have similar or opposite the

personality would be better or a good

better or worse fit but anyway what we

find is actually really cultural

congruency

that is firms uh closer in cultural

value are more likely to get together

what's also interesting for us and also

one of the themes from this research is

uh

corporate culture is evolving over time

shaped by major corporate events so

going public definitely a classical

example is goldman goldman's going

public so there are a lot of discussion

about their culture change

so here we also find something from

human us like

anthropology social and uh

uh

yeah sociology and anthropology this

concept called acculturation that is

when two tribes get together the

combined tribe actually reflect uh

capture characteristics of those two

emerging tribes so we call that a

culture region

so how do we uncover that is so so say

ibm acquired red hat is very recent but

just as example so what we show is that

one to three years down the road look at

the surviving form ibm their ceos

talking about their culture so what we

find is that combined firm the surviving

firm one year to three years down the

road very strikingly that there are

always traces of the target uh cultural

values correlated with the subsequent

surviving firms a culture so that's what

we call that culture is shaped by amino

ace in in fact ibm's culture down the

road will also be shaped by the

entrepreneurial characteristics of red

hat

so this is the first half

so what we do here is uh using the word

embedding model so this is the amount of

data we have so really grateful to

regulation fd that earnings cost of

public information so this is the amount

of earnings called transcript we

obtained to get the score of five

cultural values

for almost 70 000 firm years and over

almost yeah so also 18 years so the data

is available upon request

so what we show is that uh in our

measure of innovation is broader than

the euro measure of innovation like just

based on the expenditure or patterns

which tend to suffer from severe missing

data problem

we i didn't show in this presentation

but in the paper we also showed that

culture correlates with business outcome

but not what michelle suggests like

predictive we managed to show uh uh

association

so lastly in the paper we also showed

that a culture shaped by major corporate

events so not in our work by others they

show about the ipo so that's good so we

thought they had a case study but in our

case we had a systematic evidence

showing that

target culture will have its imprint

over the combined firm going forward

so before i move on and this is perfect

time for me to take a pause to see if

there are any

follow-up questions

i'll ask one question and then hopefully

some other people jump in as well um i'm

intrigued by the last piece of evidence

how corporate culture is shaped by

mergers

um

i'm just sitting here wondering did you

do anything that did you explore what

types of mergers have the biggest

effects like in some ways i could think

that maybe an international merger would

have a bigger effect because it's sort

of more different

but then on the other hand maybe the

prediction goes the other way because

i'm acquiring a firm that's located in

china the employees perhaps are not

really interacting

on a regular basis day-to-day compared

to a merger that's between two silicon

valley firms

so i could see the predictions going

either way i was wondering if you all

have thought about that

no that's a

that's a great one so what we did is

totally domestic but as you're fully

aware

at the international setting actually a

lot of like uh catastrophic um

cross-border transactions is like it's

claimed due to uh culture misfit so like

thumbnail and chrysler that's a

historical that's like a classic example

so it also become very challenging just

like you said there'll be two types of

culture there's a national then there's

an organizational so it'd be really fun

to disentangle when we wrote the paper

we didn't get into international because

there's already prior work by

jfe so they already looked at a culture

misfit in an international setting right

i mean what is that also very good one

they do not we need the earnings call

data to school yeah i mean you could

even there's this old paper on vc's by

um

oh my gosh who's it by it'll come to me

in a second and he showed that the

characteristics of these seeds west

coast versus east coast it was just

dramatically different which you could

imagine right like california is

different than new york city so perhaps

you could even look at that right

um yes

yes

and so that would i mean you know we all

know that there's a difference between

the east coast of this country and the

west coast and the middle so

uh perhaps you don't even need to go

international you could do sort of the

same kind of thing closer anyway i just

thought you know that's a great one but

you think about the other top hot topic

is political polarization

yeah no that's right that's going to be

yeah yeah so

potentially you're going to run a horse

race yeah

i'm going food for thought

yes no that's why people are here so i'm

going to uh ask a waiting to speak then

yeah

hi

uh can you hear me yes very well um so

um a very interesting paper and thank

you for presenting it and um so

my understanding of the innovation

culture here does that also include like

um innovation

or new product development instead of

like scientific innovation

because when i look at the table

represented like the top um top firms

who have the highest innovation

innovative culture are like those

retailers um

so

i i was surprised that those repellers

actually have high scientific innovation

um culture and i was thinking is that

like more of per new product development

and different you know different

different design different type of

products um is that included in this

innovation

absolutely continues like the question

really provide a great transition to my

second half of the presentation i saw my

closer for the second paper it's also

here um so

that is uh

it's broader so in fact um it's any it's

anything you can imagine about the

innovation so next we're going to show

you exactly what you said products

services

as well as very prompt people pivoting

from physical presence to online

presence so this uh our measure capture

that

oh thank you

so sean

yes can you hear me now yes yes thank

first of all thank you for this

wonderful presentation i'm very

intrigued i also i'm glad to hear that

you see the data is available which i

think what you did is basically opens up

a lot of very interesting to study but

just to relate to what you are getting a

little bit at the end towards the end

you said you had a evidence that

corporate culture is shaped by major

crop even particularly the target that

the post-merger

uh companies start to bear reflect some

part of the target one i also wonder

since you're already studying mma did

you also take a look at the m.a

announcement effect because

in ma is also well known that

culture is also big factor

affect the successfulness of failure of

this merger do you see

that if the parent versus the target i

mean acquire and target if their culture

is closer more uh

aligned then also it would be predict a

more successful merger so which we may

expect a

better announcement effect than those

where the culture is

less aligned no um shannon that's a

great one so if i recall i think a high

italian international setting they have

a look at the price of action so for us

what we did is we did a merger pairing

analysis you also think in the us

shareholder activism shareholder value

creation is a big deal so in our uh like

predictive analysis is what kind of

firms getting together we show that

firms that uh

has culture feet so they share same

value for innovation for quality or

teamwork they are more likely to get

together well firms that are not they

are not close in cultural dimension they

do so the counterfactual they just do

not get together so not as a result

we actually do not

show

um we do not see price election i guess

the other thing is culture is something

intangible maybe the market didn't

recognize that

for two reasons the market didn't

recognize uh deeply appreciate it the

other is bad ones that will receive

negative price election because if they

know that they are not good fit they

just decided not to get together

so that's right so we didn't find a

significant uh

like our measure of culture congruency

culture fit and price of action yeah we

don't

okay yeah that's also possible

[Music]

any other questions

did i have um

okay so maybe

remove your raised hand otherwise it's

still there but it's fine um so my

collaborator from the sec second

approach project convey is also

inaudible so i'm going to continue with

the application

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