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Xiamen University Vice-President, Professor Wu Shinong wins 2010 Fudan Management Award

XMUICE    Public:ICE    Datetime:2011/4/26

On November 15th 2010, a presentation ceremony was held in the Concert Hall of the Xiamen University Science and Arts Centre for the 2010 Fudan Management Awards. Professor Wu Shinong of Xiamen University was one of three people to be so honoured. Prof. Wu was given the award for his contributions to the field of Business Management.
On graduating from the Xiamen University School of Economics in 1982, Professor Wu joined the faculty. He went to Dalhousie University in Canada in July 1984 to study for his MBA, and returned to Xiamen University in 1986. In early 1990, he went back to Dalhousie University as a PhD student under the Canada-China Project returning to Xiamen in 1992 with a PhD in Economics. He spent the 1994-95 academic year as a Fulbright Scholar at Stanford University. In 1991, Professor Wu was appointed Chief Director of the Xiamen University MBA Centre, followed by appointment as the Dean of the Xiamen University School of Management. He is currently a Vice-President of Xiamen University, a member of the committee of the National Natural Science Foundation of China, Vice-President of the Chinese Society for Management Modernisation, and convenor of Business Administration Review Group of the Academic Degrees Committee under the State Council.

The financial distress is predictable

Before 2001, Chinese enterprise managers had no monitoring system or forecast model appropriate for studying Chinese corporate financial distress. Furthermore, there was even no agreement on the definition of or criteria for establishing corporate financial distress.
Prof. Wu´s research provided a timely and effective solution to these problems. Using a dynamic, three-stage theory he re-defined and optimised the concept of financial distress used by foreign companies, and on that basis proposed that financial distress is predictable. By comparing and contrasting financial data of Chinese enterprises, Professor Wu and his team finally set up a financial distress forecast model, consisting of 18 warning indices, enabling the overall analysis of the state of growth, asset turnover, profitability, balance sheet, assets liquidity, and cash generation ability of a company. Prof. Wu´s forecast model proved superior to that used foreign scholars in both applicability and effectiveness.
In 2006, Prof. Wu proposed a further forecast model based on value creation, which introduced corporate governance variables into the model. This method help uncover some important factors leading to financial distress for a company. He believes that problems caused by the international financial crisis have shown that corporate management is closely linked to selfish behaviour on the part of company executives resulting in financial distress for the company. Modern financial management research should therefore be combined with studies of corporate executive behaviour as well as the political and social environment outside an enterprise. Professor Wu says that he and his team will carry out further research into financial management, looking at practical problems and using methods of applied psychology, sociology and other behavioural sciences.

The key to the Chinese capital market is efficiency

Professor Wu has long held the view that the internal financial management of a company and the external capital market are interactive; a financial manager cannot afford to know nothing about the capital market, and the development of a company is inevitably influenced by the capital market in terms of its financial policies.
Prof. Wu was the first management scholar to pay attention to Chinas capital market. Already in the early 1990s, he realised that Chinas stock markets fluctuated radically, which revealed a problem of effectiveness in the markets. In August 1994, he published a paper entitled Effectiveness of the Shanghai Stock Market: an Appraisal based on an empirical analysis of financial data on listed companies. In it, he stated that it was necessary for China to ensure the effectiveness of its capital markets stock prices should reflect all relevant factors, from which, using an effective scientific analysis of the prices, the distribution of capital resources could be optimised.
From then on, Prof. Wu has focussed on effectiveness within Chinas capital market. During 2003 and 2004, he put forward the concept of market risk, and showed that classic western investment theories did not apply to Chinas stock markets. Since 2005, he has carried out a series of studies on the reform to the division of equity in China. He says that China should carry out such a reform so as to improve market effectiveness and to improve legal protection for Chinese small investors. He also proposed a set of extensions within the theory of Anchoring Effects, including dynamic vs. static anchors and high vs. low anchors. In this way, Prof. Wu developed a method for assessing the reform to the division of equity in China.
For over a decade now, Prof. Wu has been continuing to monitor effectiveness within the stock markets through his follow-up survey of financial data on listed companies. He believes that for any capital market, of no-matter what type, the crucial thing is follow market regulations and prioritise effectiveness.

Research based on Chinas actual needs

Professor Wu insists on two principles for any research: it should be based on the actuality in China; and it should benefit China. In the early 1990s, he felt strongly that international scholars paid no attention to Chinese scholars. He recognised that, in such a situation, if Chinese scholars didn´t base their research on the actuality of China and its needs, it would simply be a case of who pays the piper, calls the tune. Furthermore, he is of the opinion that one of the major tasks confronting Chinas scholars is to popularise management theories in a way that allows policymakers, entrepreneurs and students to understand, master and apply them.
Those two principles are the foundation on which Prof. Wu´s research has been built. He has published over 80 papers in key academic journals, such as the Economic Research Journal, Journal of Financial Research, China Accounting and Finance Review, and Corporate Governance: an International Review, and at international conferences. In addition, he has written 30 books, four as sole author and 10 either as a contributing author or as translator, and has been Editor-in-Chief on 16 textbooks.
In 1995, Professor Wu was awarded "Outstanding Teacher in Fujian Province". Two years later, he was cited by the State Education of Commission and the Ministry of Personnel with "Award for Outstanding Personnel Returning from Abroad". In the year 2001, he won the award "Chinese Excellent Teachers in Universities and Colleges". The year 2006 saw him win the first prize with his research program in the field of Chinese academic humanities and social science. Professor Wu won "The Best Paper Award" in the 13th and 15th TCFA Annual Conference in 2007 and 2009 respectively.

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