Q & A with Hiromi Konishi, Visiting Scholar from Japan
Hiromi Konishi is a J-1 research scholar visiting Saint Peter’s University from Japan until March 2018. She is working with Edwin Dickens, Ph.D., in the economics department. Konishi is a lecturer in the economics department at Komazawa University in Japan and has published several scholarly articles on economics. She hopes to use her knowledge of Japan and Japanese finance to enhance her research on American finances.
Q. How did you hear about Saint Peter’s University and what influenced your decision to come here?
A. I made a plan to come to the U.S. and the most important thing to me was research. I read the article “The Eurodollar Market and the New Era of Global Financialization” by Dr. Dickens in the book Financialization and the World Economy. I thought the article was so interesting that I sent an email to Dr. Dickens asking him to comment on my research and if we could work together. I applied and he accepted me. I am so thankful that he did.
Q. What projects are you working on?
A. I look to help the industry through finance and risk management research. Nina Shapiro, Ph.D., professor emerita at Saint Peter’s, wrote, “Finance financing finance,” about the reason why the stock market boom of the 2000s was not accompanied by the investment and innovation of previous booms. I want to find a solution for this.
I have an interest in stock buybacks, and want to focus my research on that. Buybacks are where a company buys its own stocks and returns the money to investors. I published an article about this in 2009 before the financial crisis and I want to return to the topic and do more research on it now.
Saint Peter’s location is great because I can easily travel into the city. I can interview bankers and investment bankers and go to the N.Y.C. Federal Reserve Bank. There are so many available resources.
Q. Can you elaborate more on investment and innovation booms?
A. The most popular way to decide investments among corporations has been NPV (Net Present Value). It is the basic theory in corporate finance. This method is based on the thoughts of “scarcity of capital.” Companies should not invest in projects where the rates of return are lower than the cost of capital. They say that capital is scarce; therefore, companies should be careful to select the investment that will increase its value for stockholders. This idea reflects the interest of the stockholders and financial institutions, which are suppliers of capital and money.
However, two other investment selection methods have attracted attention recently. These new types of thinking are as follows. One is the method where companies decide the minimum of R&D research expenditures or give the employees time to think of innovations freely.
The other is the valuation of risky investment. In the NPV method, risk means higher cost of capital. Recently, financial analyst have been looking into the value of risky investment. Risk has a higher cost of capital, but the chance of higher return. Therefore, when a company decides on an investment strategy, the valuation of risk should be counted. These new ways of thinking provide hope that financial institutions may help the innovative industry and company.
Q. Do you have any lectures or presentations scheduled in the near future?
A. I will be giving lectures in classrooms starting in September. Scott Keller, director of The Center for Global Learning, has also scheduled a Japanese social and cultural lecture called “The Culture of Innovation in Japan,” which will be at noon on October 2 in the Mac Mahon Student Center, room 527. The lecture will discuss products invented by the Japanese such as Shinkansen (Japanese bullet train) or Super Mario Bros. The discussion explains the cultural background of these innovations.
Q. What recommendations do you have for students?
A. Four years at a university is very important. Studies are important but relationships are also important. Study hard and enjoy your life.
Q. What would you like the campus community to learn from you?
A. Come to me and ask me about Japan or Japanese finance. I’d like them to learn the Japanese way of thinking. I hope that communication and cooperation between us brings something new and innovative!