July 20, 2011

Big Ideas: Emre Unlu

Dr. Emre Unlu

Dr. Emre Unlu

Dr. Emre Unlu, assistant professor of finance at UNL, has been building a reputation for excellence in corporate and international finance research. Unlu, who came to the U.S. about 12 years ago from Turkey after completing his undergraduate studies at Middle East Technical University, was awarded both the college’s Distance MBA Teaching Award and Best Paper Award in the spring.

Unlu’s award winning research paper, “Executive Compensation and the Maturity Structure of Corporate Debt,” was published in the Journal of Finance and was co-authored by Paul Brockman of Lehigh University and Xiumin Martin of Washington University in St. Louis. The paper examined maturity of loans, specifically when loans were being made to borrowers who might be inclined to take high risks. “What we found,” Unlu said, “if the lenders are worried that executives are incentivized to take risk then they give credit on a shorter term maturity. We found that corporate debt maturity goes down proportionally to the risk taking incentives built in to CEOs’ employment contracts, and that the cost of debt also goes up if you are a risk seeking manager attempting to borrow a long-term loan.”

Unlu is currently working with UNL Finance Ph.D. student, Jiri Tresl, to examine the impact of insider trading laws on the firm’s dividend policy. “We are looking at to what extent a country’s decision to start enforcing insider trading laws affects a corporation’s dividend policy. The theme of that paper is that in a deregulated environment can dividends provide protection for investors.”

Emre and Dean Plowman

Emre and Dean Plowman

Another research project Unlu is undertaking involves collaboration with one of Nebraska’s new Big Ten partners. “We are working on a project with three people at the University of Wisconsin. One co-author, Jonathan Lipson, is at the Law School and two others, Ella Mae Matsumura and Rachel Martin are in the accounting department at the Wisconsin School of Business. The paper is investigating the potential impact of securitization transactions on firm policies.”

In addition to research relationships, Unlu pointed out that UNL graduate students are also benefiting from the new Big Ten alliance. “Now that we’re in the Big Ten our graduate students such as Jiri Tresl, as part of the CIC [Committee on Institutional Cooperation], can go to top schools like the University of Chicago and the University of Michigan to pursue more doctoral seminars. I’m fully supporting this opportunity and that’s why in Jiri’s case he’ll be taking another year before he graduates.”

Unlu received four graduate degrees from the University of Missouri including a Ph.D. in finance in 2007 before accepting an offer to join the UNL Finance Department faculty. He teaches corporate finance and financial institutions courses at both the MBA and undergraduate levels.