Fenghua Song

Color portrait of Fenghua Song

Associate Professor of Finance, Mary Kathryn Walker Fellow

Department Finance
Office Address 312 Business Building
Phone Number 814-863-4905
Email Address fxs16@psu.edu

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Fenghua Song is an Associate Professor of Finance at Smeal College of Business, Pennsylvania State University, where he teaches financial management (undergraduate) and corporate finance (PhD). He received his PhD from Washington University in St. Louis, MSc from National University of Singapore, and BSE from Tsinghua University. His research interests include banking and financial crises, executive compensation and corporate governance, and corporate finance. His research has appeared in The Economic Journal , Journal of Finance , Review of Financial Studies , Journal of Financial Intermediation, Journal of Financial and Quantitative Analysis , World Bank Economic Review , and Journal of Risk , and has also been covered in VoxEU, World Bank Chief Economist's Blog, and Harvard Law School Forum on Corporate Governance and Financial Regulation . Besides research, Fenghua enjoys music, movies, nature, and spending time with his family.

Expertise

Executive compensation, financial intermediation, financial crisis, and economics of information

Education

Ph D, Finance, Washington University in St. Louis, 2007

MS, Finance, National University of Singapore, 2002

BS, Engineering, Tsinghua University, 1999

Courses Taught

FIN 305M – Fin Mgt Bus Ent Hn (3)
Development of advanced practices of financial management and their application to decision making in a business firm. FIN 305M Financial Management of the Business Enterprise (Honors ) (3) The objective of this course is to give students an understanding, and working knowledge of the major decisions faced by corporate financial managers. In general, the course will emphasize three major areas: investment and capital budgeting, financing and capital structure, dividend policy and corporate growth. A basic understanding of financial analysis and valuation will be provided. Basic corporate securities markets will be described. Determinants of securities prices, yields, and returns will be discussed. Special emphasis is placed on the role of the capital markets in financing corporate operations and investment, in facilitating corporate reorganizations and financial restructuring, and in reflecting owner’s wealth and evaluating the performance of corporate management. Students taking, the course should have a working knowledge of elementary statistics, and a basic understanding of accounting and financial statements. As an Honors course, students will study the impact of corporate activities on the market value of its stock, so a common stock pricing model is needed that accounts for factors that matter to investors. FIN 305M looks at these issues through topics such as, time value of money, risk and return, and valuation of stocks and bonds. The course concludes with topics related to specific business activities, such as capital budgeting, capital markets, capital structure, and dividend policy. The level of discussion and critical analysis expected in FIN 305M compliments the expected level of performance for honors students.

FIN 305W – Financial Mgmt Bus (3)
Development of advanced practices of financial management and their application to decision making in a business firm.

FIN 597 – Special Topics (3)
Formal courses given on a topical or special interest subject which may be offered infrequently; several different topics may be taught in one year or term.

FIN 597B – Corporate Finance I (3)
Doctoral seminar which will cover the fundamental topics in corporate finance, covering both theoretical and empirical work in corporate finance.

FIN 596 – Individual Studies (variable)
Creative projects, including nonthesis research, which are supervised on an individual basis and which fall outside the scope of formal courses.

Selected Publications

Song F., Thakor A. V., "Bank culture." Journal of Financial Intermediation, 2017.
Goel A. M., Song F., Thakor A. V., "Correlated leverage and its ramifications." Journal of Financial Intermediation, vol. 23, no. 4, 2014, pp. 471-503.
Gopalan R., Milbourn T., Song F., Thakor A. V., "Duration of executive compensation." Journal of Finance, vol. 69, no. 6, 2014, pp. 2777-2817
This paper: (i) won the 2011 Olin Award: Recognizing Research that Transforms Business, (ii) was invited to be summarized at the Harvard Law School Forum on Corporate Governance and Financial Regulation, and (iii) presented at the American Finance Association (AFA) 2012 annual meeting..
Gopalan R., Song F., Yerramilli V., "Debt maturity structure and credit quality." Journal of Financial and Quantitative Analysis, vol. 49, no. 4, 2014, pp. 817-842
Lead articleThis paper was nominated to the semi-finalist for the best paper at the 2010 Financial Management Association (FMA) Annual Conference..
Song F., Thakor A. V., "Notes on financial system development and political intervention." World Bank Economic Review, vol. 27, no. 3, 2013, pp. 491-513.
Song F., Thakor A. V., "Financial system architecture and the co-evolution of banks and capital markets." The Economic Journal, vol. 120, no. 547, 2010, pp. 1021-1055
We were invited to post a summary of this paper at the VoxEU: a policy portal by the Centre for Economic Policy Research (CEPR)..
Gopalan R., Milbourn T., Song F., "Strategic flexibility and the optimality of pay for sector performance." Review of Financial Studies, vol. 23, no. 5, 2010, pp. 2060-2098
This paper: (i) won the Citigroup award for the best paper presented at the 2009 summer research conference hosted by Centre for Analytical Finance, and (ii) was invited to be summarized at the Harvard Law School Forum on Corporate Governance and Financial Regulation, and Smeal Research with Impact..
Song F., Thakor A. V., "Relationship banking, fragility, and the asset-liability matching problem." Review of Financial Studies, vol. 20, no. 6, 2007, pp. 2129-2177.
Song F., Thakor A. V., "Information control, career concerns, and corporate governance." Journal of Finance, vol. 61, no. 4, 2006, pp. 1845-1896.
Lim K., Song F., Warachka M., "The effect of taxes on the pricing of defaultable debt." Journal of Risk, vol. 6, no. 2, 2003, pp. 1-29.

Research Impact and Media Mentions

"Bank culture", See Far: WFA-CFAR research publication, Journal or Magazine
"Duration of executive compensation", See Far: WFA-CFAR research publication, Journal or Magazine
"Bank Culture", Oxford Business Law, Web
"Duration of executive compensation", Finance and Accounting Memos (FAME) by UCLA Anderson School, Journal or Magazine
"Notes on financial system development and political intervention", getAbstract: compressed knowledge, Journal or Magazine
"Political intervention in financial system development: Its nature, causes, and consequences", Let’s talk Development: A blog hosted by the World Bank’s Chief Economist, Web
"Banks and capital markets as a coevolving financial system", VoxEU, Web
"The optimal duration of executive compensation", Harvard Law School Forum on Corporate Governance and Financial Regulation, Web
"The co-evolution of banks and capital markets: implications for planned new financial regulation", Royal Economic Society, Journal or Magazine
"Strategic flexibility and the optimality of pay for sector performance", Harvard Law School Forum on Corporate Governance and Financial Regulation, Web