Ramabhadran Thirumalai
 Assistant Professor of Finance

Two of Professor Ramabhadran S Thirumalai’s research papers, have been accepted for publication in top tier Economic and Accounting journals.

The first paper, ‘What’s in a vote? The short- and long-run impact of dual-class equity on IPO firm values,’ co-authored with Scott Smart from Indiana University and Chad Zutter from University of Pittsburgh, has been accepted for publication by the Journal of Accounting and Economics. The paper studies the impact of governance structure of dual-class firms on their valuation. In dual-class firms, a second class of equity with superior voting rights is held by insiders. The authors find that relative to fundamentals, dual-class firms trade at lower prices than do single-class firms. The lower prices attached to duals do not foreshadow abnormally low stock or accounting returns. Moreover, some types of CEO turnover are less frequent among duals, and in general CEO turnover is sensitive to firm performance for singles, but not for duals. Finally, when duals unify their share classes, statistically and economically significant value gains occur. The paper posits that the governance associated with dual-class equity influences the pricing of duals.

The second paper, ‘Information Revelation in the Futures Market: Evidence from Single Stock Futures, co-authored with Kuldeep Shastri and Chad Zutter, both from University of Pittsburgh, is to be published by the Journal of Futures Markets. It examines whether, and to what extent, price discovery about the underlying stocks occurs on the OneChicago, a relatively new market for Single Stock Futures (SSFs). The authors analyse 31 months of data on 137 SSFs traded on OneChicago. The results indicate that on the days they trade, SSFs contribute approximately 24 percent of the price discovery for underlying stocks. Information revelation in the SSFs market decreases with the ratio of spreads in the futures and with the volatility in the stock market. Moreover, the quality of the market for the underlying stocks improves substantially following the introduction of the SSFs market - the largest improvement occurring on days of SSFs trading.

Professor Thirumalai is Assistant Professor of Finance at the Indian School of Business (ISB). A PhD in Business Administration from Indiana University, his research interests span areas in market microstructure and corporate Finance. He received his doctorate degree in Finance from Indiana University and also has an MS in Statistics from the University of South Carolina.