Finance: It's All People Behind Those Numbers
Mengnan Zhu, in a classroom in Althouse Hall, home of the Department of International Business & Management. Photo by Dan Loh.
Office Hours: Assistant Professor of International Business & Management Mengnan Zhu
by Tony Moore
Assistant Professor of International Business & Management Mengnan Zhu received his Ph.D. in international economics and finance from Brandeis University and is a certified Project Management Professional (PMP). He teaches such courses as Investments and Corporate Finance, and his most recent research publication, "Does the Confidential IPO Registration Process Create Value?," was discussed at conferences with the SEC and the Office of Financial Research at the Department of the Treasury.
Finance seems like an arena that a lot of people don’t understand but probably should. I’ll just go ahead and assume you agree. Why is Dickinson the place to go if you want to learn to understand it?
I couldn’t agree more. Where finance has been misunderstood the most is that it is not all about mathematical formulas or theoretical models. Instead, it’s very much about people. Participants in the financial world make decisions based on their different beliefs about the intrinsic value of an asset. Naturally, the more you understand how people think, the better you make your assessments. Dickinson’s liberal-arts–based business curriculum offers a comprehensive education emphasizing people skills—clarity in communication, attention to detail and confidence under pressure, to name a few. I think you can say that my students here learn to become future managers, not only financial analysts.
You specialize in utilizing machine learning (ML) techniques to investigate corporate finance issues. That’s what I’d call a seriously multidisciplinary area of focus. What sparked your interest in bridging the gap between computer science and business?
Multidisciplinary is the reason I love my research. I see myself as a handyman with an advanced toolbox and acute sense of business trends. The world changes drastically with technology developments. The ML tools I learned allow me to ask important, timely and interesting questions. Back to my earlier point, you cannot understand investor/corporate decisions only using numbers. Just think about how much soft information is out there. For example, every publicly listed firm has to file quarterly reports with the regulator (Securities and Exchange Commission). Will it help you understand better if you read those reports thoroughly? Yes, but how many 10,000-word reports can you read before you tire? Well, machines won’t get tired. Nature language processing (NLP) techniques fit those tasks nicely. I’m not shy of applying new methods whenever appropriate, as long as they can be used reliably, efficiently and ethically.
Back in my former life, I knew a lot of people in finance, and they were all unabashedly in the industry to make a good living. But there’s got to be more to finance than getting Range Rover-sized bonuses and living in Connecticut. Or no? (For the record, that would be enough for me.)
That’s a good point you make, but money doesn’t grow on trees. You’re receiving a fat check probably because you traveled 200 days last year, answered conference calls at 5 a.m. or brought your laptop to the beach. The joy in the finance industry also comes from managing risks during economic development, seeing businesses grow and innovate and addressing societal challenges, such as climate change, inequality and ethical investment.
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Published January 19, 2024