Kevin Chen

Kevin Chen

Contact Information

  • office Address:

    1360 SH DH
    Philadelphia, PA 19104

Links: CV

Overview

Kevin’s research centers around information disclosure, corporate governance, and corporate bankruptcy. His dissertation studies the role of information disclosure in corporate bankruptcy, and it provides some of the first evidence on how the quality of disclosures made by firms and their creditors affects bankruptcy outcomes. His research also seeks to understand how a firm’s information environment responds to and influences its governance choices, which has led him to examine issues including busy directors, shareholder voting, multidimensional corporate governance, board committees, and contextual corporate governance. Kevin obtained his BA in Economics and Mathematics (summa cum laude) from the University of Pennsylvania in 2017.

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Research

  • Kevin Chen, The Role of Information Disclosure in Corporate Bankruptcy (Job Market Paper). Abstract

    Bankruptcy is an important mechanism for resolving insolvency and reallocating resources in the economy. Despite the common belief that transparency is central to the bankruptcy system, there is little evidence on how it affects bankruptcy outcomes. In this paper, I exploit two sources of plausibly exogenous variation in disclosure during a bankruptcy: the random assignment of bankruptcy judges who may differ in interpreting the disclosure requirements of the law, and a significant change in regulation that increased the disclosure by certain creditors but not others. I show that more information disclosure improves recovery rates and other outcome variables by alleviating inefficiencies stemming from stakeholders’ conflicting interests. I also identify the potential costs and distributional effects of disclosure, as well as the underlying mechanisms for the efficiency gains. My findings provide some of the first evidence on the role of information disclosure within the corporate bankruptcy process and offer new insights to the broader accounting literature on disclosure.

  • Kevin Chen and Wayne Guay (2020), Busy Directors and Shareholder Satisfaction, Journal of Financial and Quantitative Analysis, 55 (7), pp. 2181-2210. Abstract

    Prior research has examined the firm-level performance implications of “busy” boards. Firm-level analysis, however, masks important heterogeneity in the time constraints and expertise of individual busy directors. We develop and validate shareholder voting as a proxy for shareholders’ satisfaction. Our director-specific tests provide compelling evidence that the potential costs of busy directors outweigh their benefits. At the same time, we uncover new sources of heterogeneity among busy directors. For example, the downsides are more pronounced for directors who sit on boards where fiscal year ends cluster in the same month. Our analysis highlights the role of shareholder voting in board composition research.

  • Kevin Chen, Wayne Guay, Richard A. Lambert, Multidimensional Corporate Governance: Board Independence, Board Expertise, and Equity Incentives. Abstract

    Corporate governance is a multidimensional construct, with many interactive mechanisms that must be simultaneously managed for efficiency. We develop a model where three ubiquitous governance mechanisms—board independence, board expertise, CEO equity incentives—are endogenously selected to encourage information sharing by the CEO and to optimize the board’s ability to monitor and advise the CEO. We find that, in equilibrium: (i) board expertise and equity incentives are substitutes (complements) when the board has high (low) independence; (ii) boards with greater independence also have higher expertise; and (iii) equity incentives may be positively or negatively related to board independence, depending on the nature of board advice.

Teaching

Past Courses

  • ACCT1010 - Acct & Financial Report

    This course is an introduction to the basic concepts and standards underlying financial accounting systems. Several important concepts will be studied in detail, including: revenue recognition, inventory, long-lived assets, present value, and long term liabilities. The course emphasizes the construction of the basic financial accounting statements - the income statement, balance sheet, and cash flow statement - as well as their interpretation.

Awards And Honors

Winkelman Fellowship, The Wharton School of Business, 2019-Present
“Awarded annually to one rising 3rd year PhD student who has shown the greatest academic job potential across all departments at Wharton.”

The Wharton School Fellowship for Doctoral Studies, 2017-Present

 Lawrence Klein Prize for Outstanding Research by an Undergraduate, University of Pennsylvania, 2017

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    Latest Research

    Kevin Chen, The Role of Information Disclosure in Corporate Bankruptcy (Job Market Paper).
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