Associate Professor of Finance Sean Sehyun Yoo, along with two co-authors, received the Korea America Finance Association Best Paper Award for 2013 for their paper entitled “Risk Management with Leverage: Evidence from Project Finance.” The Korea America Finance Association consists of Korean American finance faculty and other domestic and international members. With the sponsorship of Shinhan Bank, one of top five commercial banks in Korea, the association annually awards the best paper prize to research papers in finance and related areas. The paper, published by the Journal of Financial and Quantitative Analysis examines the conventional wisdom that says borrowing, or leverage can be tax-beneficiary. But, bankruptcy risk will increase with leverage eventually. At odd with this, the authors’ empirical research finds that leverage can be used as a risk management tool in project finance, e.g., building a highway, by using the most comprehensive sample of project finance extracted from 124 countries between 1997 and 2006.
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