Coffee Chats with Professors | CBS Edition featuring Emmanuel Yimfor

Coffee Chats with Professors is a newsletter series focused on pulling back the curtain on the ivory tower and getting to know the people that make it up: professors. What did they think they would be when they grew up? How did they make it to such exclusive places? Is it lonely? Are there perks? What do they hope their work will accomplish?

About the author: I’m currently an MBA Candidate at Columbia Business School, and as a first-generation American, a first-generation college student (all the firsts!), I couldn’t help but wonder about the seemingly mysterious, yet omniscient lives professors live. Join me on my coffee chats as I speak with renowned, world-class professors and unravel their (extra)ordinary lives.

Featuring Emmanuel Yimfor

Emmanuel Yimfor is an Assistant Professor of Business at Columbia Business School.

You have four little ones. Do they know what you do??

All my kids think of me as a teacher. They think I teach kids (the kids just being a little bit older). They are very confused when I seem busy, like I am right now doing research, and they'll ask me what I’m teaching, and I can't quite tell them because I’m not teaching this semester. So this is a little bit confusing, not just for them, but for my family as well because I'm the first person to do this. It's hard for them to understand what I do exactly.

What do they think you teach?

They know I'm a finance professor. I always tell them what finance is: you want to allocate funding to its best possible uses. And so the way I am with them at home, essentially conversations with my wife about “oh how much money I've been putting into this and that” - they kind of assume that that's what I'm teaching students all the time: how to manage their personal finances - which couldn't be further from the truth. [Chuckles]

You grew up in Cameroon. What was your childhood like??

Growing up for the first 12 years, my family was very middle class. My dad worked for the government as a treasurer. He passed away, unfortunately, and my mom raised us in a very urban environment, that's why New York feels like home because I grew up in a lot of chaos, with a lot of people around. My mom is a Presbyterian pastor and life changed a lot after my dad passed away. She had to be tough to raise all of us and we went from being middle class to being slightly below middle class for a very long time.

So your mom's a pastor, how was it as a woman? Is it typical in Cameroon?

It was really not typical. She's had a lot of complaints about the work environment, but this is her passion. She enjoys public speaking. Everything I know about public speaking I learned from her. Watching her Sunday, after Sunday, deliver her sermons, that stuck with me. She was a teacher at a theological seminary for a while. She has a doctorate degree in theology, but now she's back to pastor in congregations.

So you are not a first-gen PhD?

I am not a first-gen PhD. My mom is a PhD.

What did you think you would be when you were growing up?

To be honest I did not give it much thought. I read this book much later called “Stumbling on Happiness,” and that book confirmed a lot of the intuitions I had growing up. Growing up, I always had this sense that once you met Maslow’s Hierarchy of Needs you would never be happier or not happy, and that stuck with me. Like I'm talking to you right now and I don't expect to be any happier in the future than I am right now because I know it's only going to be relative to something else.?

I really just wanted a good paying job to raise a family. I was engaged to be married when I was 22. My mom pushed me, she said “you can do better than this,” [I had gotten my undergraduate degree from the Catholic University of Central Africa] and she encouraged me. I applied to two schools for my MBA: Kent State and Virginia International University -? whatever Google loaded up very quickly, that's where I applied. And when I got there, the teachers suggested the PhD route. It was never really a planned thing. I never thought I wanted to be a PhD, but I thought “I'm gonna climb this mountain here” and then I reached the peak and a series of fortuitous circumstances led me here. I will say, I was an entrepreneur. I've always had a love for entrepreneurship, and so very naturally, my research dovetails with this natural tendency.

How did you get this job? Was it your first choice? What did you think you would do with a PhD?

I knew what I wanted with a PhD. I knew I wanted a tenured track job, which one I was not sure. When I went on the market, one of the best finance schools that interviewed me was the University of Michigan, and that's the school that hired me. When I was there, I was teaching private equity, entrepreneurial finance, venture capital, and here at CBS, they were launching this big new private equity initiative and given my research interests in private equity and venture capital, this opportunity really opened me up. When I flew here, got the chance to be in New York City, to get to a school at this level, I really didn't give it much thought. I accepted almost immediately. In a sense there was no application for this position. I was invited to give a talk at CBS and apparently it went well, because if it hadn't, I would not be here.?

Talk to me about the discipline of research. As we discussed there may be a misconception that professors are always teaching.?

We start with the discipline, remember there is a lot of self-selection into academia. They have to be pretty independent. They have to know how to write papers on their own. They have to know how to form hypotheses about the world and test those hypotheses. If you couldn't do that, you would never graduate from a PhD program in finance. Even before you get a job like this, people ask you all the time, what do you want to work on? If you don't have a grand vision for how you're going to be spending your time, it's gonna be very hard for you to get one of these jobs. That’s step one, you can almost assume they're passionate about investigating and knowing something about the world.

For me, it was understanding this issue of underrepresentation in private markets. I'm really obsessed with understanding what frictions would lead to the share of entrepreneurs that are Black or Hispanic or female, for example, to differ from the share in the population? What about the board of directors of startup firms? What about venture capital partners? What about limited partners that are allocating capital to funds? Through my research I want to understand each of these different layers of private markets, so that I can make a contribution to my field towards understanding the role that race plays in underrepresentation and the primary frictions that are driving this delta.

When I'm not teaching, I am writing papers, presenting research on these topics, and responding to referee requests, because we have to publish our papers in certain journals within a certain amount of time. That's another part of the motivation, if you blow the time doing something else that's not related to your research, when time comes you're going to have to find a new job, because they can't keep you here if you are not publishing and making an impact in your field.

What are the tools to answer these questions?

That's where I think I've made the most contribution to date. For example, understanding underrepresentation by race in private markets is close to impossible. Different data sets do not identify the data by race.?

I've had to go through this effort of collecting images and using people's last names and developing an algorithm that can jointly process the images and the last name to give a prediction of race. I then review each of those images, using thousands of hours of clerical review to ensure we're doing our best in terms of quality control.?

Conditional and setting up all of the groundwork, like laying out the different databases and different levels of representation, we are then poised to move to the next step, which is what are the main frictions that are leading to the representation gap. Can we quantify the impact of different frictions? What are the causal impacts that some rules that California is requiring on venture capital funds to disclose the composition of their portfolio? With the kind of data I've built, I’m poised to look at startup companies by Black and brown founders in California and see if this has an effect on their likelihood of raising capital.

Do you feel you got all of the training you needed in the PhD program??

That's a good question. I got most of the training that I needed. A lot of it, you have to learn on the job. I'm a huge believer in learning through failure. If there's anything that I would say, that’s one of my core beliefs. I get very upset with myself when I use hindsight to judge myself. I think about all the ways in which my failure has helped me. I constantly believe that, and one of the reasons I enjoy this job so much, is that I can honestly, every day, say that I am learning something new and I am growing. The second it becomes about showing people how much you have learned and not growth then there's no additional learning. I don't know if I'll be as happy in this job.

Tell me about some of your failures. Do you fail a lot?

I do, I fail a lot. I have written papers that I have sent to journals that have gotten rejected. It's very tough, obviously, because every time your brain wants to over interpret every rejection as some symbol of what's going to happen to your career in the future. Whenever I get those reports, it takes me a few weeks, two months, but eventually I do read it carefully and think about how I can change how I work moving forward to make sure that I do not fall into the same trap.

Do you think you'll be a professor for a long time?

Knock on wood. [Chuckles]. This will be a great way to spend the rest of my life thinking about questions that I care about, teaching students about the stuff I've found from my research, and influencing policy research.?

You are at the forefront of empirical corporate finance research. Tell me a cool fact or finding you have found in your research recently.?

One finding that I did not anticipate is the perverse incentives that using proxies for risk can have on regulatory action. The government may come, well intentioned, and tell different lenders, I'm going to judge you by how fairly you are lending to different groups, but since I don't have you collect data on race, I am going to infer the race of the borrowers that you are lending to, using a combination of their last names and their locations where they are living.

The one big thing that I learned during this project is how important the correct measurement is for inference about which lenders are unfairly lending to different groups in the population and ranking lenders disparities in lending and the impact that that can have.

What would have been a good solution?

A good solution would be to have the lenders collect information and self report. For example, the government can subpoena them and have them provide the loan book with data on race as opposed to inferring from last name and geography.?

Rapid fire:

1. Who is your hero? My mom.
2. What is one thing you regret spending money on? This ring I’m wearing. It's one of those fitness rings, but the coating on the inside is not metal and it irritates my skin. I didn’t know you had to buy the coating separately through a forever subscription.
3. Where did you go on your last vacation? England. I have three siblings that live there.?
4. What was your first job? At 16, I started a movie rental business.?
5. What time do you usually go to bed at night? Same as my kids, 8:30pm - 9pm.

Professor Yimfor teaches Corporate Finance in the Core for full-time MBAs.