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Research Output | Prof. Shen Rui’s Paper Is Accepted by The Review of Financial Studies
Release time:2020-06-02Views:354

The new paper of Associate Professor Shen Rui from the School of Management and Economics, The Chinese University of Hong Kong, Shenzhen, “Measuring Corporate Culture Using Machine Learning”, is accepted by The Review of Financial Studies. This journal is one of top three international journals in the field of finance. The journal is  a major forum for the promotion and wide dissemination of significant new research in financial economics, and is highly recognized by the international academic community.


We create a culture dictionary using one of the latest machine learning techniques—the word embedding model (Mikolov et al. 2013)—and 209,480 earnings call transcripts. We obtain scores of the five top corporate cultural values proposed by Guiso, Sapienza, and Zingales (2015): innovation, integrity, quality, respect, and teamwork for 62,664 firm-year observations over the period 2001–2018. We show that corporate culture correlates with business outcomes, including operational efficiency, risk-taking, earnings management, executive compensation design, firm value, and deal making. We also present suggestive evidence that corporate culture is shaped by major corporate events such as mergers and acquisitions.

Associate Professor Shen Rui

Shen Rui is the Associate Professor of the School of Management and Economics, The Chinese University of Hong Kong, Shenzhen. He has taught Intermediate Financial Accounting for Bachelor students, Financial Analysis and Equity Valuation for Master students in Finance and Accounting for non-business Master students. His main research interests are heterogeneous interpretations of public accounting information, market anomaly and corporate decisions. His research has been published in The Accounting Review, Journal of Financial and Quantitative Analysis and Strategic Management Journal.