Hugh Hoikwang Kim

Email: 'at'

Research Interests:
    Investment; Asset Pricing; Investor Behavior; Financial Markets and Institutions; Lifecycle Portfolio Choice

CurriculumVitae (updated: August 2017)

    Assistant Professor of Finance, Darla Moore School of Business, University of South Carolina, 2016 ~ present
    Faculty Associate, The Pension Research Council, The Wharton School, University of Pennsylvania, 2013 ~ present

    Assistant Professor of Finance, SKK Graduate School of Business, Sungkyunkwan University, Korea, 2013 ~ 2016
    Visiting Scholar, Sloan School of Management, M.I.T., May ~ August 2015

    University of Pennsylvania, The Wharton School, Ph.D. in Applied Economics, 2013
    University of Pennsylvania, The Wharton School, M.S. in Applied Economics, 2011
    Seoul National University, B.A. in Economics, 2004

Refereed Publications:

    1. "It Pays to Write Well" (with Byoung-Hyoun Hwang), Journal of Financial Economics 124(2): 373-394, May 2017
        * Media mention: Wall Street Journal, Harvard Law School Forum

    2. "Time is Money: Rational Life Cycle Inertia and the Delegation of Investment Management", (with Raimond Maurer and Olivia S. Mitchell), Journal of Financial Economics 121(2): 424-447, August 2016.

    3. "The Impact of Shrouded Fees: Evidence from a Natural Experiment in the Indian Mutual Funds Market(with Santosh Anagol), American Economic Review 102(1):576-93, February 2012.

    4. When and How to Delegate? A Life Cycle Analysis of Financial Advice” (with Raimond Maurer, Olivia S. Mitchell), 2016 (Forthcoming, Financial Decision Making and Retirement Security in an Aging World. Eds P Brett Hammond, O. S. Mitchell, and S. Utkus. Oxford: Oxford University Press). 

Working Papers:

    1. "Economic Policy Uncertainty and Bank Liquidity Creation"(with Allen Berger, Omrane Guedhami, Xinming Li)

AbstractWe investigate an important channel through which economic policy uncertainty (EPU) affects real economy – bank liquidity creation. Using almost one million U.S. bank-quarter observations from 1985:Q2 to 2014:Q4, we find that EPU decreases bank liquidity creation through reductions in asset- and off-balance sheet-side liquidity creation, partially offset by increased liability-side liquidity creation. Findings suggest that EPU likely harms the economy at least in part through disrupting the bank liquidity creation process. Results hold across bank size classes, but are somewhat weaker during financial crises, possibly because banks sometimes receive favorable government treatment during crises that helps shield them from uncertainty. 

    2. "Insurer Underwriting Performance and the Cost of Capital"(with Chia-Chun Chiang, Greg Niehaus)

AbstractThis paper investigates the impact of insurers’ underwriting and investment performance on the cost of equity capital. We find insurers’ cost of equity capital increases after they report poor underwriting performance. However, we do not find a negative relation between the cost of equity capital and investment performance. We attribute the difference to investor learning regarding the relatively opaque underlying insurance operations compared to the relatively transparent investment management.

    3. "Form and Function in the Social Sciences"(with Byoung-Hyoun Hwang, Kai Wu)

AbstractIdeas proposed in scientific journal articles have the potential to touch many areas of our lives in significant ways. It is thus important that these ideas reach their intended audiences. Here we provide evidence that a lack of clear writing can substantially hamper an article from reaching its intended audience. We use journal articles in the field of financial economics as our setting and we utilize a copy-editing software application that counts the pervasiveness of the most important “writing faults” that make a document harder to read. Our analysis reveals that articles with one more writing fault per one hundred words receive 7% fewer citations.

    4. "Pessimistic Fund Managers"(with Yongqiang Chu)

AbstractThis paper examines managers’ sentiment revealed in their letters to shareholders and its relation with their future performance, focusing on closed-end funds (CEFs). The result shows that the pessimistic tone in managers’ letters to shareholders predicts superior future risk-adjusted returns and narrows CEFs’ discount. The result is robust to controlling for potential mean-reversion pattern of investment performance. An increase of pessimistic tone by one standard deviation leads to a 3.6% ~ 5.0% increase of risk-adjusted NAV return per annum. The predictive power is more pronounced when the stock market is expected to be less volatile in the future. Analyzing CEFs-held stocks’ return in subsequent earnings announcement dates, we find that CEFs with pessimistic tone are more likely to initiate profitable stock trades. Our result suggests that investment managers’ sentiment revealed in disclosure documents might contain useful information for future performance. 

    5. "Information Spillover of Insurance"

AbstractThis paper examines an information spillover effect of financial institutions’ enrollment in a government bailout insurance program. Analyzing money market funds’ dynamic enrollment status in the U.S. Treasury Temporary Guarantee Program in 2008, this paper finds that funds’ disclosure of enrollment in the insurance program lead to significantly reduced outflows from other non-enrolled funds. I address the endogeneity issue of funds’ enrollment status based on survival analysis and an instrumental variable approach. This finding is consistent with the information spillover effect of insurance; investors extract valuable information about financial institution’s underlying stability from their purchase of insurance.
  • The Best Paper Award, Semi-finalist, FMA Annual Meeting (2013, Chicago)
  • The Best Doctoral Dissertation Award, Winner, The Korea-America Finance Association (2012, Atlanta, GA)
  • Previously circulated under the title "Contagious Runs in Money Market Funds and the Impact of a Government Guarantee."


    Investment Management (Full-time MBA/Professional MBA), University of South Carolina (2016, 2017)
    Capital Budgeting (Full-time MBA/Professional MBA), SKK GSB (2015, 2016)
    Managerial Economics (Full-time MBA/Professional MBA/Executive MBA), SKK GSB (2014, 2015, 2016)
    Financial Management (Professional MBA), SKK GSB (2015)
    Economic Analysis (Full-time MBA/Professional MBA), SKK GSB (2013, 2014)

Dataset and codes:

  1. Online appendix for "The Impact of Shrouded Fees: Evidence from a Natural Experiment in the Indian Mutual Funds Market" (AER, 2012)
  2. Online appendix for "Time is Money: Rational Life Cycle Inertia and the Delegation of Investment Management" (JFE, 2016)
  3. Code for "It Pays to Write Well" (JFE, 2017)

Revised in August 2017

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