Investing Early
As part of her email signature, Tilan Tang includes a quote from Miguel de Cervantes’s “Adventures of Don Quixote.” It reads: “To be prepared is half the victory.”
As an associate teaching professor of finance, Tilan thinks the quote speaks to an underlying principle of finance — “the time value of money”. It also serves as a subtle message to her students.
“In the principle of the time value of money, the No. 1 rule is to invest early,” Tilan explains. “That’s on the money front. But I always tell my students that we also need to invest in our own talent, our own abilities early in our college life. It works for money, and it works for careers.”
A commitment to investing early in her career certainly worked for Tilan, who discovered her passion for finance in high school. A one-week internship shadowing a financial manager at a large public company led her on an efficient journey to earn undergraduate degrees in business administration and computer science from Shanghai Jiao Tong University, a master’s degree in economics from Florida State University and a Ph.D. in finance from Michigan State University.
“After that week, I felt pretty determined that finance was a career I wanted to pursue, and I knew I would apply to a college that specialized in business education,” Tang says. “That early idea took me on a path that led me to where I am today.”
After earning her Ph.D., Tang was courted by academia and the private sector. Offers from leading financial firms were attractive, but she felt called to continue her rigorous academic research and to educate the next generation of students in the classroom. That blend of teaching and scholarship later attracted her to Wake Forest University.
“I was not actually looking for a new position when Wake approached me, but they thought I was a good fit based on my research and teaching performance,” she says, “and I was highly impressed by their teacher-scholar model.”
Tang’s research focuses on empirical corporate finance and corporate governance, including mergers and acquisitions, executive compensation, firm valuation, board of director networks, financial policy and customer-supplier relationships.
Her work, “Effects of Managerial Labor Market on Executive Compensation: Evidence from Jobhopping,”
was published in the Journal of Accounting and Economics and also picked up by the popular press, including The Wall Street Journal. That line of inquiry started from a simple observation: executive compensation has been on the rise, even during challenging periods for a company. Tang’s research found that when top talent leaves a company (a “job-hopper”), the company tends to respond to the perceived increased labor market competition by boosting compensation packages for remaining C-suite executives and by making stock options a larger part of their package. “The competition becomes much more severe when the whole industry is feeling the pressures of performance and companies see qualified talent as scarcer,” Tang says. “So, companies keep ratcheting up pay.”
Tang’s most recent work examines the role of small business funding in community development. Specifically, she and colleagues studied the Community Development Financial Institutions Program, which invests federal resources (matched by private funds) to serve low-income and underserved people and communities. According to the Treasury Department, in 2023, the CDFI Program financed more than 126,000 businesses and originated more than $57 billion in loans and investments. Such stats are available but, Tang says, there had been little academic research into the program’s systemic impact, even though it’s existed since 1994.
“What we’ve found is quite interesting,” she says. “In terms of the geographic expansion of the program, those participating CDFIs tended to enter counties with much higher unemployment rates and a larger minority population. So, that verifies that the CDFIs were meeting their original mission of serving and providing more funding flows to underbanked areas.”
“Further, we found that looking at the counties where CDFI entered, the small business lendings from participating CDFIs grew more, relative to the traditional small business lendings provided by other banks,” she continues. “So, that made us very excited.”
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