Kwok Yuen (K.Y.) Fan

Assistant Professor of Economics and Finance The Hang Seng University of Hong Kong (HSUHK)

Biography

Hello! I am Kwok Yuen (K.Y.) Fan, an Assistant Professor of Economics and Finance at The Hang Seng University of Hong Kong (HSUHK).

My research operates at the intersection of two distinct worlds. My academic journey began in Marketing, studying how organizations craft narratives and sell visions of the future. However, as my path led me to the United Kingdom for a Master’s in Finance, I began to perceive a friction between the stories companies tell and the ledger sheets they manage. Surrounded by the rigorous logic of capital markets, I identified a fundamental tension: while Marketing focuses on perceived value, Finance demands shareholder value.

But what about social value?

This question brought me back to the skylines I grew up admiring. While witnessing awe-inspiring urbanization, I could not ignore the negative externalities left in the wake of progress. I recognized a profound economic injustice: profits were often privatized on corporate balance sheets, while environmental costs were socialized for the public to bear. Nowhere is this more prevalent than in the Real Estate sector—a primary engine of the global economy, yet also a massive contributor to global emissions and waste.

Resolving this dissonance is the core mission of my work.

I pivoted to academia to reconcile my Marketing roots (the promise of a better world) with my Finance training (the constraints of capital). Today, I use Corporate Finance as a lens to examine how firms balance economic gains with social welfare. I dig into the data to determine how we can redesign financial incentives so that the real estate sector accounts for its externalities—transforming environmental justice from a marketing slogan into a financial reality.

Research Interests

Building on my mission to reconcile economic gains with social welfare, my research functions as an investigative lens into the behavior of the two most powerful architects of the built environment: Corporations and Governments. My work is organized into three primary streams:

1. The Financial Reality of ESG: Tension and Trade-offs

While the market touts ESG as a monolithic good, my research reveals a complex reality. In my examination of US REITs, I have documented a distinct friction between environmental stewardship and fiduciary duty. My findings indicate that unlike Social and Governance improvements, heavy Environmental investments can negatively impact short-term equity returns due to high capital costs. This creates “Selective ESG Engagement,” where firms prioritize low-cost/high-visibility social initiatives over substantive environmental overhauls.

2. The Political Economy of Pollution

Beyond the corporate boardroom, I investigate how government incentives shape physical landscapes. I look at the “race-to-the-bottom” phenomenon, where local officials—driven by career concerns—may strategically lower land prices or relax oversight to attract investment. My work highlights that transparency and performance measurability are potent antidotes; when environmental protection is integrated into political evaluation systems, the incentive to sacrifice air quality for GDP growth diminishes.

3. Climate Resilience and Market Valuation

Ultimately, my research asks if the market can learn to price sustainability correctly. I examine whether “green” attributes—such as sustainable property management or energy efficiency—are capitalized into asset values. My work on the Hong Kong housing market suggests that investors do pay a premium for sustainability, driven by risk reduction rather than just rental yields.

Selected Research

Performance measurability, local government’s incentives, and regional air pollution reduction World Development (2025) Investigates how linking local leaders’ career incentives to environmental metrics effectively mitigates air pollution, offering a blueprint for policy design.

ESG components and equity returns: Evidence from real estate investment trusts International Review of Financial Analysis (2024) Empirically demonstrates that while Social and Governance improvements boost firm fundamentals, heavy Environmental investments can negatively impact short-term equity returns in US REITs.

The value of sustainable property management in real estate: Evidence from Hong Kong Journal of Real Estate Research (2024) 🏆 Winner of the 2023 Best Conference Paper Prize (CREAAC) Finds that the market capitalizes sustainable management into housing prices through a risk-reduction channel rather than higher rental yields.

Honors & Awards

• 2024 Best Conference Paper Prize

  China Real Estate Academic Annual Conference

  • Paper: An Institutional Perspective of Selective ESG Engagement
• 2024 3rd IETI PhD Fellowship Award

• 2023 Best Conference Paper Prize

  China Real Estate Academic Annual Conference

  • Paper: The Value of Sustainable Property Management in Real Estate