Newly Funded Research Projects

Schulich researchers continue to successfully secure funding from Canada’s federal Tri-Council granting agencies, the major source of research and scholarship funding for Canadian Universities. Schulich researchers predominantly receive funding from the Social Sciences and Humanities Research Council (SSHRC). In 2020 & 2021, Schulich had phenomenal years in acquiring external funding. Particularly, our SSHRC results were most impressive. We earned a remarkable eighty-five percent success rate. We proudly

present some of the interesting work that is being conducted by our researchers.

KIRIDARAN KANAGARETNUM

Professor of Accounting

JUSTIN TAN

Professor of Strategic Management/Policy; Newmont Endowed Chair in Business Strategy

SSHRC INSIGHT DEVELOPMENT GRANTS Climate Risk, Information Environment and Cost of Equity Capital

Principal Investigator: Kiridaran Kanagaretnum

According to World Economic Forum Global Risks Report, the top five long-term risks were all climate-related (World Economic Forum, 2020). Climate events inflict severe damage to property and infrastructure, devastating local economics and potentially harming national economic output. Climate risk can be categorized into physical and transitional risks. Physical climate risk refers to damage to land, infrastructures, and other physical assets. It impacts firms through their operating costs, impairments, provisions, and business interruptions. Transition climate risk relates to the cost of transitioning to a low carbon economy and entails rising operating costs due to energy related spending, higher R&D investments for transitioning to a low carbon economy and changing market preferences in terms of both supply chain and customer preferences.

Given this context, Kiridaran’s objective is to study the relations between climate risk and firms’ information environment (i.e., information asymmetry) and the cost of equity capital in a cross-country setting. This line of research is important to understand the channels through which climate risk can affect the firm’s investment and external funding environment that impacts investors and other stakeholders.

SSHRC INSIGHT DEVELOPMENT GRANTS Digital Technology Adaptation and Business Ethics: An Exploratory Study of Artificial Intelligence in Canada

Principal Investigator: Justin Tan

In recent years, Artificial Intelligence (AI) has been widely used in various aspects of work and life. At the same time, the rapid technology development and its diffusion have received huge criticism for violation of personal privacy and unethical technique utilized. Among the concerns of AI, informative privacy is the top concern of the technology. With the assistance of AI, companies collect a significant amount of data such as the user’s preferences, private information, online surfing history and use the information for business purposes. So far, in most areas of the world, including Canada, there is no specific regulations or laws that protect the user’s information privacy from AI. In this study, Justin will leverage his previous expertise and investigate the theoretical connections between AI technology and its social and ethical implications.

YELENA LARKIN

Associate Professor of Finance

NICOLE MEAD

Associate Professor of Marketing

SSHRC INSIGHT DEVELOPMENT GRANTS Corporate Social Responsibility and Industry Restructuring

Principal Investigator: Yelena Larkin

Corporations have been increasingly pressured to become socially responsible by reducing their impact on the environment. Policy makers, environmental groups, consumers, investors, employees, among others, demand actions to meet environmental norms. Despite years of research, existing literature does not have a consensus regarding whether “green” production is beneficial or detrimental to the welfare of corporate stakeholders. What determines the choice of firms and how to correctly assess their impact on the environment is largely an open question. In this project, Yelena explores corporate decision-making with regard to firms’ environmental policy using a novel setup. Her empirical strategy takes advantage of a staggered passage of restructuring legislation in the electric utilities industry across U.S. states during the 1990s that has facilitated the entry of new competitors. This setting helps provide unambiguous answers to a range of important questions: First, did increased competition lead to a change in utilities’ pollution policy? Second, what actions did restructured utilities undertake to change their pollution policy? Third, to the extent that pollution policy has changed, what economic mechanism is responsible for this change?

SSHRC INSIGHT DEVELOPMENT GRANTS Belief in the Implicit Social Contract Governs Pro-Environmental Behaviour

Principal Investigator: Nicole Mead

For the first time, the World Economic Forum has identified climate-change-related threats as the top long-term risks facing the world (WEF 2020). They are not alone. Scientists have been sounding the alarm bell, granting agencies, such as SSHRC, have identified the Environment as a key priority for research funding. Yet despite the mounting awareness and public calls for change, global carbon emissions continue to rise (Global Carbon Project 2019). To slow global warming, deeper insight into psychological mechanisms that govern pro-environmental behaviour is needed. In this research, Nicole identifies a novel psychological mechanism which governs pro-environmental behaviour. Then she develops an intervention that promotes eco-friendly behaviour. Thus, this research offers novel theoretical and substantive insight for academics and practitioners who are committed to increasing pro-environmental behaviour.

ALEKSANDRA RZE ´ ZNIK

Assistant Professor of Finance

SSHRC INSIGHT DEVELOPMENT GRANTS Strategic Timing of Earnings Announcement

Principal Investigator: Aleksandra Rze´znik

The main job of the capital market is to efficiently allocate capital across the economy. To achieve this, investors need to possess unlimited capacity to process information. If information processing is limited, some information may not be immediately incorporated into prices, which can contribute to market inefficiency. Aleksandra’s project focuses on firms that strategically time their earnings announcements and the consequences of this behaviour. The team argues that strategic timing of earning announcement (STEA) impedes investors’ information processing capacity, which, in turn, impairs the efficient allocation of capital in the economy.

This project is the first to document the spillover effects of STEA. The team’s unique data and original methodology allow them to identify spillover effects of STEA and address numerous potential endogeneity issues. Aleksandra’s research is of high significance for investors and managers.

ALEXANDER COUTTS

Assistant Professor of Economics

SSHRC INSIGHT DEVELOPMENT GRANTS Motivated Beliefs and Racial Discrimination

Principal Investigator: Alexander Coutts

Discrimination against racial minorities has been extensively documented across multiple domains, such as in healthcare, policing, and the markets for labour, goods, and services. Despite increasing awareness, empirical evidence suggests that the prevalence of racial discrimination in areas such as hiring has not decreased over the past 25 years. While many agree that discrimination is a widespread social problem, few report that they personally harbour racial bias.

In this research, Alexander and the team investigate the link between individuals’ motivations to remain unaware of the extent of their racial biases and the prevalence of discriminatory behaviour. The first hypothesis follows research in psychology that suggests that individuals have self-serving motivations to negate, deny, or remain unaware of the extent of their own racial biases. The second hypothesis is that their resulting unawareness contributes to the persistence of these biases and leads to realized discriminatory behaviour.

In studying these connections, Alexander and the team leverage theories of motivated beliefs to identify the precise mechanisms that operate in the context of racial bias. Thus, Alexander will shed light on how motivated beliefs contribute to discrimination and how this discrimination can be reduced.

AMIN MAWANI

Associate Professor of Accounting

SSHRC INSIGHT DEVELOPMENT GRANTS When Financial Reporting Standards Collide

Principal Investigator: Amin Mawani

Corporate lobbying reframed the discourse of CEWS from helping employees to helping the businesses themselves during an uncertain pandemic period. Firms’ disclosure about government wage subsidies continued to be of interest to shareholders as well as other stakeholders such as labour groups and unions, taxpayer citizens, competitors and the media — even if immaterial for accounting purposes. For example, ESG disclosure rules that allow firms to omit disclosures on climate-related lobbying on grounds of immateriality may be self-defeating.

Initial estimates show that about 19% of CEWS recipients voluntarily disclosed their CEWS amounts in their annual report even when such amounts were below the assumed materiality threshold of 5% of net incomes. This suggests that accounting immateriality is not all that drives firms not to disclose their CEWS amounts.

This research examines whether firms scoring high on ESG rankings were more likely to disclose their CEWS to reflect some broader societal goals such as better stewardship of taxpayer resources. Failure to disclose CEWS for high-ranking “S” (social metric) firms may reflect their reluctance to admit that they received a government subsidy that was not necessary from a cash flow perspective.

DEAN NEU (PI)

Professor of Accounting

GREGORY SAXTON (CO-PI)

Associate Professor of Accounting

SSHRC INSIGHT GRANTS Accounting Inscriptions and Social Media-based Social Accountability Processes

Principal Investigator: Dean Neu (PI) and Gregory Saxton (Co-PI)

Social media such as Twitter has arguably changed the possibilities and forms of citizen participation within democratic processes. On the one hand, social media helps organizations and people hold their governments accountable. When whistle-blower organizations such as the ICIJ publish previously-private financial information about the wealth accumulation activities of politicians and business people, social media helps to disseminate the information and provides a venue for public discussion. On the other hand, the unorganized nature of social media and the speed at which social media disseminates information makes it a particularly virulent site for ‘fake’ news, including fake news involving accounting numbers and inscriptions. Dean and Gregory’s program of research uses large-scale data from Twitter to examine how the release of previously-private financial information by whistler-blower organizations such as the International Consortium of Investigative Journalists (ICIJ) puts into motion new social accountability processes and transforms the ways that accounting inscriptions participate in the subsequent social accountability conversation.

MATTHEW BAMBER

Associate Professor of Accounting

SSHRC INSIGHT GRANTS Accounting Interrogations: Good Questions, Good Answers, and the Roles of Voice and Silence

Principal Investigator: Matthew Bamber

This study focuses on an important recent addition to the financial reporting calendar, namely the Question and Answer (Q&A) session between management and financial analysts which occurs during a firm’s quarterly financial results presentation. During this live webcast and transcribed meeting, management put forward their narrative of the firm’s financial results, before being interrogated by financial analysts on a range of issues, (assumedly) chosen at the discretion of the question-askers. This is a key event in a large listed company’s financial calendar. The results presentation — particularly the Q&A — has been shown to be socially, politically, and economically valuable. Not only is this the first contact between the firm and investors after the closed period, but it also represents an increasingly rare opportunity for analysts to interact with management. In many cases, sell-side analyst-manager meetings are limited to these quarterly results presentations. Despite this, these Q&A events remain understudied, poorly understood, and woefully under-theorized.

Matt’s program of research will address a series of fundamental inter-related questions related to these Q&A. Key questions include: What is (not) a good question to ask during a firm’s Q&A? What is (not) a good answer for management to provide? When, under what circumstances, and why do management not provide answers to analysts’ questions in this forum? Whether managerial non-responses (silence) are received as bad news, and if so (not), why (why not)?

POUYAN FOROUGHI

Assistant Professor of Finance

SSHRC INSIGHT GRANTS When Do Acquirers Overpay for Target Firms? Evidence from M&A Target Valuation Analyses

Principal Investigator: Pouyan Foroughi

This research plan builds on the striking findings of decades of studies that more than half of mergers and acquisitions destroy shareholder value. These findings are difficult to understand in light of the tremendous volume of acquisitions of both public and private companies. Although many studies try to explain why many deals destroy shareholder value, none provide readers with a clear answer to a straightforward question — do acquirers simply pay too much for target firms?

Utilizing a broad sample consisting of all firms that provide firm-level valuation analyses produced by financial advisors as to the basis for their “fairness opinion,” justifying the transaction price as appropriate to the target or the acquirer, Pouyan’s research will provide a clear answer to this question. These reports generally provide significant detail regarding the methodologies used to evaluate the offer price as well as cash flow forecasts produced by managers of target and can be used to derive measures of the bias/optimism of target managers exists in their forecasts, as well as in the selective choice of the methodologies and assumptions used to execute their analyses.

MARK KAMSTRA

Professor of Finance

SSHRC INSIGHT GRANTS Investor Attention, Mood, and Price Persistence

Principal Investigator: Mark Kamstra

The stock market is influenced by psychology and by investor (in)attention to news. Kamstra’s research explores predictability arising from mood interacting with attention, disentangling retail investors (who are perhaps relatively more likely to be impacted by mood) from institutional investors. GameStop and Reddit highlight the importance of retail investors.

Google Trends documents retail investor web searches for news and Bloomberg provides data on institutional investor search, allowing identification of periods of relative inattention to news and events. Changing seasons have been shown (by Kamstra and others) to correlate with changing mood, fall and winter are associated with the blues and aversion to risk. All of this combined points to the impact of attention and investor mood on markets and identifies periods of informed and stabilizing price movements as well as periods of destabilizing price changes associated with mood and retail investor over-reaction.

The central insight is that it may not be the attention that matters, but rather who is paying attention. This research will help determine appropriate reactions to extreme events in financial markets, providing policy makers and investors with the tools needed to assess the impact of heightened attention and retail trading on return predictability and market stability.

LILIAN NG

Professor of Finance; Scotiabank Chair in International Finance

AMIN MAWANI

Associate Professor of Accounting

SSHRC INSIGHT GRANTS How Firms Combat Climate Change: International Evidence

Principal Investigator: Lilian Ng

Climate change is driving new political and economic realities for countries and businesses worldwide. Many large US corporations are integrating climate change into their business strategies in response to pressures from regulatory authorities, environmental activists, and climate-conscious investors and consumers. While their efforts seem progressive, a closer look reveals that firms are committed only to greenhouse gas (GHG) emissions from their production and energy consumption (Scope 1 and 2 emissions, respectively). They largely ignore indirect (Scope 3) emissions produced along their supply chains, which form most of their total GHG emissions. For example, the Natural Resources Defense Council (NRDC) reports that P&G’s commitments to halve pollution by 2030 only apply to its Scope 1 and 2 emissions. NRDC alleges that this target only represents 2% of P&G’s total GHG emissions if Scope 3 emissions are considered. Lilian’s project examines whether and how US firms reduce their carbon footprints to tackle global climate change and evaluates their real and financial implications. Her research provides robust evidence that firms actively outsource their carbon emissions to overseas suppliers as domestic pressure to reduce emissions intensifies, leading to greater risks and lower valuations.

SSHRC INSIGHT GRANTS Evaluation of Wage Subsidies for Public Corporations Based on Legislative and Accounting Disclosures

Principal Investigator: Amin Mawani

The Canada Emergency Wage Subsidy (CEWS) was designed as a bailout for employees who had been sidelined from employment through no fault of their own. However, the eligibility rules for the subsidy made it clear that it was more of a business subsidy and not a wage subsidy for jobs that would otherwise have been lost. CEWS recipients did not have to demonstrate the need for cash, and therefore the subsidy could flow through to higher reported income and/or higher dividend payouts.

Managers could claim a responsibility to shareholders to take advantage of legislation to maximize subsidies receivable, since otherwise they would face a cost disadvantage against their competitors who may receive CEWS.

This research examines the characteristics of firms that voluntarily disclosed the wage subsidy they received. Amin hypothesizes that firms may be reluctant to disclose their CEWS if they increased their dividend payouts or reported large declines in incomes in the same year. This may reflect firms’ reluctance to disclose business subsidies being diverted to shareholders in the form of higher dividends or remind investors that reported incomes would be worse in the absence of CEWS.

BURKARD EBERLEIN

Professor of Public Policy and Sustainability

SSHRC INSIGHT GRANTS Global Sustainability Standards in National Context: Comparing Business-Government Interactions in Argentina, Brazil, and Canada

Principal Investigator: Burkard Eberlein

Sustainability standards play an important role in the governance of responsible business conduct in the global economy. Most major companies have committed to voluntary standards that demand environmental and social performance along global supply chains. However, de-globalization, disruptions in supply chains, and the resurgence of national economic priorities suggest government pushback against global standards.

Why and how do national governments strategically engage with global sustainability standards, in the context of industrial priorities? More specifically: how do different configurations of business-government relations shape national government responses to global sustainability standards?

The project addresses this question through a case-study comparison of businessgovernment relations in three countries and two industries. Argentina and Brazil, the two major economies of South America, are contrasted with Canada in the Global North. In all three countries, we compare two industries that present major sustainability concerns: soybean (deforestation, land use) and mining (environmental degradation and community impacts). The project’s central objective is to understand why and how national governments choose to either adopt and harness global sustainability standards, or repurpose, replace or even reject them, in favour of national standards.

MATTHIAS KIPPING

Professor of Policy; Richard E. Waugh Chair in Business History

SSHRC CONNECTION GRANTS Disruption, Transformation, Stability: Exploring Industry Dynamics over Time and Space

Principal Investigator: Matthias Kipping

Why have certain industries experienced multiple disruptions within a short time, while others have remained stable for decades and even centuries? Why have some industries moved locations within and across countries while others have continued to flourish close to their geographic origins? These questions have been addressed in a variety of disciplines, including economics, sociology, political science, and business research. They have taken on greater relevance today when many sectors around the globe are experiencing significant upheavals due to the pandemic, new business models, and technological innovations.

Exploring the dynamics of stability and change in a wide range of industries is the purpose of The Oxford Handbook of Industry Dynamics, edited by Matthias Kipping, Takafumi Kurosawa and Eleanor Westney, which brings together experts from multiple fields. The connection grant allows editors and contributors to meet and discuss these questions with each other as well as graduate students and practitioners. The first meeting in Kyoto in October 2019 was followed by numerous small-scale Zoom workshops, with an in-person workshop planned for June in Madrid and a final conference at Schulich in September 2022.

ALEXANDER COUTTS

Assistant Professor of Economics

CHARLES H. CHO

Professor of Sustainability Accounting; Erivan K. Haub Chair in Business and Sustainability

LINDA THORNE

Professor of Accounting

PARTNERSHIP ENGAGE GRANTS Incorporating Traditional Beliefs to Improve Maternal and Child Health Outcomes in Guinea-Bissau

Principal Investigator: Alexander Coutts

Sub-Saharan Africa is a region where maternal and newborn diseases remain a primary cause of preventable deaths. While resources are scarce, in recent years researchers have collected evidence about the puzzlingly low utilization of health services in these settings. Partnering with a local NGO, VIDA, Alexander’s research seeks to evaluate a novel type of health campaign in the country of Guinea-Bissau. This new campaign seeks to address traditional beliefs to reduce both maternal and child mortality and morbidity.

Though previous research has noted that traditional beliefs often play an important role for health decisions, they can be overlooked when it comes to health information campaigns. In the context of Guinea-Bissau, prior survey evidence finds a significant link between high levels of traditional beliefs about health and avoidance of health centers for maternal care and child illness.

By evaluating these health campaigns, the results of this research will shed light not only on the beliefs that individuals have, but how these beliefs interact with information, and healthseeking decisions. This information can be utilized to design better campaigns that encourage more health center visits and healthier communities.

CAAA — THE CANADIAN ACADEMIC ACCOUNTING ASSOCIATION Canadian Modern Slavery Supply Chain Transparency and Reporting Legislation: A Behind-the-Scene Investigation

Principal Investigator: Charles H. Cho

Charles’ research stands to offer unique insight into how transparency and reporting legislation focused on modern slavery in the supply chain, which has key implications for our understanding of combating modern slavery and the changing demands and social expectations of businesses, particularly in human rights. Key objectives include: (1) To explore how supply chain transparency and reporting legislation focused on modern slavery is developed and shaped when multiple models of legislation exist (e.g., UK vs. France); (2) To identify and map out the key actors involved in the creation of such legislation and how they may impact the process, eventual legislation, the effectiveness of such legislation, and subsequent business practices — taking Canada as an example case; (3) To advance our understanding of the changing demands and social expectations of businesses, particularly in human rights.

CPA CANADA — CAAA FINANCIAL ACCOUNTING, ASSURANCE AND TAX RESEARCH GRANT PROGRAM An Experimental Examination of Changes to IAS 1

Principal Investigator: Linda Thorne

Linda and Schulich’s PhD student Sameera Hassan received a research award from CPA Canada to experimentally examine the impact of proposed changes to IAS1 that require supplemental disclosures to be reported and reconciled in the audited notes of the financial statements. Publicly listed companies report their financial performance using audited financial statements compiled according to Generally Accepted Accounting Procedures (GAAP), which are supplemented 90% of the time by additional non-GAAP unaudited disclosures included in the Management Discussion and Analysis (MD&A). Management suggests that supplemental disclosures provide investors with valuable and useful insight into their firms’ performance not captured by GAAP reporting. However, standard setters are concerned that management is using this information to opportunistically explain away a firm’s poor performance. Linda and the team are evaluating the impact of proposed changes to IAS1 by examining their effect on investors’ investment decisions. It is anticipated that the results of their experiment will provide insight not only into how the change will influence the investment decisions of financial statement users but also will provide direction to CPA Canada on how best to increase the reliability of supplemental performance measures.

CHARLES H. CHO

Professor of Sustainability Accounting; Erivan K. Haub Chair in Business and Sustainability

CPA ONTARIO — THOUGHT LEADERSHIP Engage Accounting Scholars Network

Principal Investigator: Charles H. Cho

Originally funded as the ‘Engaged Accounting Scholar Network’, this project was renamed ‘Accounting for Impact’ (AFI)’. The co-founders and inaugural Steering Committee members believe in the importance of academic activism to support social justice and equity. As such, the purpose of this initiative is to create a Network that fosters engagement and impact for accounting scholars. The Network intends to be inclusive and foster a variety of perspectives and methodological approaches. It encourages accounting academics of all backgrounds, levels of experience and geographical locations to join and use this space as a catalyst for reflecting upon which constituencies might benefit from their work.

The Network will include activities like (but not limited to) providing training for accounting academics on how to engage in knowledge mobilization and research communication, organizing events that bring together researchers and practitioners to identify practice-driven research questions and developing resources engage practitioners and policymakers with research findings. Regardless of the venue or approach, the primary objective is to provide opportunities for academics to reach outside the ivory tower and create impact through their research.

Website: https://www.accountingforimpact.org/ Co-founders: Charles H. Cho and Erica Pimentel Steering Committee: Julie Bernard, Joel Bothello, Alessandro Ghio and Leanne Keddie

MOSHE ARYE MILEVSKY

Professor of Finance

THE INDIVIDUAL FINANCE AND INSURANCE DECISIONS CENTRE (IFID CENTRE) Mortality Shocks and Lifecycle Finance

Principal Investigator: Moshe A. Milevsky

This 2-year research project aims to investigate the impact of mortality shocks — both negative as well as positive — on optimal economic behaviour in a lifecycle model of investment and consumption. The narrow technical question to be investigated is how a rational utility maximizing agent should adjust their holdings of life insurance and retirement annuities when they receive new information that “shocks” their mortality beliefs. Are they more likely to discount the future and ignore long term risks? Or does the heightened salience of new risks increase the demand for protection? More broadly, the project will collect data and carefully examine how North American consumers reacted and adjusted to covid-19 risks, within the context of their personal finances and insurance. From the perspective of a business school, if consumers are indeed changing the types of financial products they value post-pandemic, then financial services companies must adjust their offerings and menus accordingly.

HENRY KIM

Associate Professor of Operations Management and Information Systems

MITACS How Grain Discovery’s Blockchain Solution Can Enable Flexibility in the Agriculture Supply Chain in the Age of COVID-19?

Principal Investigator: Henry Kim

In the Fall of 2020, Abhishek Pandey, a graduate of Schulich’s MBA program, and Professor Henry Kim were awarded a MITACS Business Strategy Internship to study “How Grain Discovery’s Blockchain Solution Can Enable Flexibility in the Agricultural Supply Chain in the Age of COVID-19.” Grain Discovery is a Canadian startup that provides traceability, connectivity, coverage and market intelligence in the agriculture supply chain through its innovative blockchain solution. The project explored the change in consumer behaviour due to the ongoing pandemic COVID-19 and how this behaviour impacted the agriculture supply chain. The project involved doing secondary research, analyzing various secondary data, collaborating with the Grain Discovery team and advisor to brainstorm plausible solutions and coming up with recommendations. This work aided Grain Discovery in securing customers as well as additional venture capital.

MURAT KRISTAL

Associate Professor of Operations Management and Information Systems

MITACS Transforming Financial Planning Software

Principal Investigator: Murat Kristal

Led by Murat Kristal (PI) and Hjalmar Turesson (Co-PI), this project aims to develop a proof-ofconcept optimization software for Planworth. Planworth provides financial planning software for investment advisors developing comprehensive financial plans for wealth maximization. Current wealth optimization software tends to be domain-specific and thus, multiple software have to be combined to generate a plan. The result of this process is often sub-optimal. Thus, the objective of this project is to generate a comprehensive plan where all factors relevant to an individual’s financial plan are optimized simultaneously.

The methodology for this project revolves around linear optimization, also known as, linear programming. The first part will be theoretical, concerns converting the practical properties of an individual’s financial life such as taxes, spending goals, salary and forced incomes into formal constraints that can be used in optimization. In addition, the properties of different risk and safety measures will be studied theoretically. The second part of the proposed project will be to implement a proof-of-concept software application. For this, Python together with the Scipy and PuLP libraries will be used. Scipy is a Python library of scientific computing with several optimization routines, while PuLP is a Python library specific to linear programming.

The final implementation will be evaluated in simulation against Planworth’s current planning method.

MITACS Automation of Event Detection for ISA Cybersecurity Inc.

Principal Investigator: Murat Kristal

ISA receives a continuous stream of security-related data in which they detect threat events. The data sources include firewalls, ips/ids, endpoint protection solutions, operating system logs, etc., which together make up a large number of fields (300+). This project aims to improve event detection efficacy by identifying novel relationships between events in the data stream. Previous research in cybersecurity data science has demonstrated that threat events are often associated with distinct patterns of disparate and individually innocuous events. That is, broad contextual information like temporal and spatial relationships among events and connections are often informative about suspicious activity. The addition of contextual information through machine learning-based prediction of threat events has not yet been thoroughly explored and provides a promising research direction. Murat Kristal (PI) and Hjalmar Turesson (Co-PI) propose to characterize those patterns by first training a predictive model to classify known threat events in historical data and then analyze the fitted model’s feature importance. Beyond threat-predictions in novel data, this method will allow to identify event-critical subtleties that are very difficult for a human security analyst to spot manually, thus providing the analyst with essential insights. The result will be a context-aware and adaptive cybersecurity solution capable of incremental learning as new data arrives.

AVIS DEVINE

Associate Professor of Real Estate Finance and Sustainability

2020 PENSION REAL ESTATE ASSOCIATION’S (PREA) REAL ESTATE RESEARCH INSTITUTE (RERI) RESEARCH GRANT AWARD Underwriting Green Mortgage Backed Securities: Costs and Benefits

Principal Investigator: Avis Devine

Avis Devine’s research, in collaboration with Dr. Meagan McCollum, explores an important sustainability intersection: the financial implications of a green bond program encouraging energy and water efficiency in U.S. multifamily housing with the goal of increasing housing affordability. Diffusion of new technology, such as green bond policies, is impacted by inefficiencies and frictions as the market navigates adoption. Using data from Fannie Mae multifamily green mortgage backed security issuances, they identify possible disconnects between pricing and benefits, as well as adoption trends. Evidence indicates that loans on properties backed by green bonds that incentivize energy efficiency in multifamily buildings receive lower interest rates, lower debt service coverage ratios, and higher leverage ratios than their “brown” counterparts. Some of these findings represent stated program benefits, yet others do not. Additionally, some benefits are observed accruing to properties that are not participating in a green MBS program, despite already qualifying for participation. Supporting evidence points to drivers of adoption and program refinements that could aid in policy maximization. The study’s results carry implications for both existing green bond programs as well as the diffusion of green bond policy into the broader capital markets.

2021 PENSION REAL ESTATE ASSOCIATION’S (PREA) REAL ESTATE RESEARCH INSTITUTE (RERI) RESEARCH GRANT AWARD ESG Investment and Private Real Estate Returns

Principal Investigator: Avis Devine

This study, in collaboration with Dr. Andrew Sanderford and Dr. Chongyu Wang, explores private equity real estate fund performance and voluntary environmental, social, and governance (ESG) disclosures. Using data from the National Council of Real Estate Investment Fiduciaries (NCREIF), it examines the relationship between performance for funds in the Open Ended Diversified Core Equity (ODCE) Index and reporting to the Global Real Estate Sustainability Benchmark (GRESB), a platform for disclosure about fund/firm-level ESG strategies. The empirical analyses suggest four conclusions. First, there has been substantial adoption of and reporting to GRESB in the last 5 years, suggesting that reporting to GRESB is a form of table stakes for private equity real estate industry leaders. Second, GRESB participation and performance are both significant predictors of cross-sectional fund returns. Third, GRESB participation and performance are associated with the price appreciation component of fund total returns but not with the income component. Fourth, the relationships between fund returns and GRESB participation and scores are independent of local economic conditions. These results close an important gap in the literature about private equity real estate fund performance and ESG/climate change mitigation efforts in commercial real estate markets.

HENRY KIM

Associate Professor of Operations Management and Information Systems

YORK UNIVERSITY VPRI’S INAUGURAL CATALYZING INTERDISCIPLINARY RESEARCH CLUSTERS (CIRC) INITIATIVE Digital Currencies: Present and Future

Principal Investigator: Henry Kim

In November 2021, York University’s Catalyzing Interdisciplinary Research Clusters (CIRC) competition awarded $525,000 over three years to an interdisciplinary team of York professors to investigate “Digital Currencies” and Fintech. The Principal Investigators are Professors Henry Kim from York’s Schulich School of Business and Joann Jasiak from Faculty of Liberal Arts & Professional Studies (Economics). The core team members include Schulich’s Professors Irene Henriques and Divinus Oppong-Tawiah as well as Professors Poonam Puri (Osgoode), Sotirios Liaskos (School of IT), and Andrea Podhorsky (Economics). There are more than a dozen additional York University collaborators including Schulich professors and researchers Chris Bell, Mark Kamstra, Perry Sadorsky, Yisong Tian, and Hjalmar Turesson that number promises to grow.

The team has initiated a collaboration with the Bank of Canada to study Bitcoin adoption in Canada. They are also collaborating with Stats Canada to explore how CBDCs can mitigate underprivileged communities’ exclusion from traditional financial services. They are funding student and post-doc research into stablecoins, Bitcoin energy consumption, cryptocurrency pricing, payment systems for microgrids encompassing electric vehicle charging/discharging, cryptocurrency and digital assets regulations, token-economics simulation and modeling, and decentralized autonomous organizations (DAOs). The team also sponsors the Fields Institute Lecture Series on Blockchain, which has hosted world-renowned speakers.