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Biography

Pramuan Bunkanwanicha is an Associate Professor of Finance at ESCP Europe - Paris campus, where he teaches Fundamentals of Finance, Emerging Markets Finance, and International Finance.
He received a Doctorate in Economics from the Université Paris 1 Panthéon-Sorbonne in 2006. He also holds the degrees of MBA and Bachelor of Engineering from the Asian Institute of Technology and the King Mongkut’s Institute of Technology North Bangkok, respectively. Prior to joining ESCP Europe, he was a visiting scholar at Columbia Business School and the Economic Growth Center, Yale University.
His research interests include international corporate finance, corporate governance, and family firms. His article, “Big business owners in politics”, has been recently published in the Review of Financial Studies. His research papers have been presented at major academic conferences such as the Western Finance Association (WFA) 2009 meeting, the European Finance Association (EFA) 2008 meeting, the American Finance Association (AFA) 2007 meeting.

Current research

Why Do Shareholders Value Marriage? (with Joseph P.H. Fan and Yupana Wiwattanakantang)

Abstract:
This paper studies marriages of top 150 business owners and their family members in Thailand during 1991-2006. Out of 200 marriages, more than two-thirds chose the partner from the business or political circle. In effect, via marriage, the controlling family can be closely connected to other influential families including business leaders and politicians. Indeed, investors recognize the value of the "network marriages." Stock prices of the family firms react strongly positively to the wedding news. Abnormal returns are in particular higher for the firms whose operation depends on having extensive networks for reliable information, lucrative contracts, and resource sharing. These firms are in the property and construction industries, based on state concessions, or in diversified business groups.

Big Business Owners and Politics (with Yupana Wiwattanakantang)
Published in Review of Financial Studies, 2009, Vol. 22 Number 6, pp. 2133-2168”

Abstract:
This paper investigates a little studied but common mechanism that firms use to obtain state favors: business owners themselves seeking election to top office. Using Thailand as a research setting, we find that the more business owners rely on government concessions or the wealthier they are, the more likely they are to run for top office. Once in power, the market valuation of their firms increases dramatically. Surprisingly, the political power does not influence the financing strategies of their firms. Instead, business owners in top offices use their policy-decision powers to implement regulations and public policies favorable to their firms. Such policies hinder not only domestic competitors but also foreign investors. As a result, these politically connected firms are able to capture more market share.


Debt and Entrenchment: Evidence from Thailand and Indonesia (with Jyoti Gupta and Rofikoh Rokhim)
Published in European Journal of Operational Research, 2008, Vol. 185, Issue 3, pp.1578-1595”

Abstract:
This paper examines the relation between debt and corporate governance in emerging market economies. We use firm-level panel data of listed companies from Thailand and Indonesia to analyze the firm's corporate financing behaviors in connection with its corporate governance arrangements. Our results show that the debt structure is linked to the corporate governance. We find that weaker corporate governance firms, in particular measured by the entrenchment effects, tend to have a higher debt level. The evidence is relatively stronger during the crisis period. Our results also shed lights on the importance of the country-specific institutional settings that would affect the empirical results.

Publications