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Math and economics major Lan Nguyen ’07 (Hanoi, Vietnam) spent the January interim session helping Donald Chambers, Walter E. Hanson/KPMG Professor of Business and Finance, conduct research on the corporate mergers and acquisitions of the past two decades.
She combed through databases, SEC documents, and The Wall Street Journal archives to find when merger negotiations were initiated, whether they were bidder or target-company initiated, and when public announcement of the negotiations was first announced.
Chambers will use the information Nguyen gathered to conduct a study to “understand the relationship between pre-announcement share price activity and whether the merger was bidder initiated or target initiated. The difference has implications for why shareholder activities are occurring.”
They collaborated as part of Lafayette’s distinctive EXCEL Scholars program, in which students assist faculty with research while earning a stipend. The program has helped make Lafayette a national leader in undergraduate research. Many of the more than 160 students who participate in EXCEL each year go on to share their work though articles in academic journals and/or conference presentations.
“I want to find a career in finance so I found it very interesting to learn more about the business world, what happened in the transactions between companies,” Nguyen says. “I didn’t realize there were so many mergers, and I didn’t realize the full effect of the mergers on the stock price and trading volume and the effects on investors’ minds.”
Though professors are the first to admit that research can sometimes be tedious, frustrating work, Nguyen’s enthusiasm never waned.
“I enjoyed reading the background sections [in the documents that the SEC requires be filed from companies] because they show how complicated mergers are—sometimes they didn’t work out. So it was always interesting.”
She immersed herself in the project, demonstrated initiative in overcoming problems finding some of the data, and earned high praise from Chambers.
“She’s a hard worker and she’s bright, and that’s a great combination right there,” he says.
“It’s been my experience that students who come from a former communist country, or even a current communist country, make the best capitalists. And they are most receptive to my message of free markets and capitalism,” says Chambers.
Chambers chose Nguyen as his research assistant because he knew her from his corporate finance class, which she took in the fall, and because she had been recommended to him by other faculty who saw her capabilities.
“People who are brought up in an economic system that is not advanced have not absorbed much information about the modern business world. So I thought ‘what better way for Lan to pick up information about what’s been going on in the last 15-20 years than to read all these prospectuses?’ I thought this would be a great learning opportunity for her,” Chambers says.
“I don’t think communism is a bad thing. But when students are from [communist] countries they know the drawbacks – the monopolies; it doesn’t make the economy grow a lot,” Nguyen says.
“That’s why we try to make a difference in some things. We see things going on inside and we want to be different – that’s why we go abroad. We want to get some success that we might not be able to get at home,” she says.
In addition to what she learned about the intricacies of corporate mergers and the events that contributed to the make-up of today’s business landscape, she also learned how to conduct rigorous academic research.
“It’s hard; it’s complicated. It requires a lot of data, and sometimes getting the data isn’t easy. I think it requires being very diligent,” she says.
She sees the value of EXCEL as being multifaceted.
“[Students] learn all about what researchers do and how to proceed in research and what they have to overcome,” she says.
“In class we learn about the theory, but [EXCEL research] is the real thing, what’s going on out there in the world. In class I learned what economists think, how they explain the world. But in this project I learned more about the human element.”
“[Students] also get to interact with professors closely and learn more than what is taught is class. When you are closer to a professor they can teach you more about certain things that are going on in the research. It’s a good experience,” Nguyen says.
Chambers notes the importance that research opportunities – via Lafayette’s EXCEL program, independent study and honors courses, and the Community of Scholars – can have for the undergraduate — as a learning experience, and as a significant asset when applying for graduate schools.
“A lot of students – especially the international students – catch on really quickly how important it is to get involved with faculty, and they come to us as freshman or sophomores and ask if there is any research they can get involved in.”