Hanjoon Ryu Wins Finance Theory Group’s 2026 Best Job Market Paper Prize

Hanjoon Ryu, a 2026 Ph.D. graduate in Economics from Duke University, recently received the Finance Theory Group’s 2026 prize for Best Job Market Paper for his research titled “Dilutive Finance.”  

The award recognizes outstanding work by early-career scholars in financial economics and has been given only 32 times since its inception. Ryu is the only recipient from Duke to receive the prize.  

Ryu’s paper tackles a question that affects companies large and small: Why do firms hold onto so much cash? 

When companies need money — to invest in new projects, for example, or expand operations — they often raise funds from financial institutions. But those institutions typically negotiate their compensation based on how much value the company could gain from receiving financing. If a company is desperate for cash, the financial institution may be able to demand a larger share of that value. 

Ryu’s theory suggests that holding cash changes that dynamic. 

“Bargaining simply means that the financial institutions can see how much value the company could get from raising financing from them and then demand a fraction of it as their compensation,” he said. “This implies that if the company has a lot of cash, it does not have its ‘back against the wall,’ so to speak, when bargaining with financial institutions.” 

With cash reserves available, a company can afford to walk away from a negotiation or take time to find alternative financing. If the company is less desperate, the deal becomes less valuable to the lending financial institution, since it reduces how much it can extract during negotiations. 

“In short, companies are sitting on cash in order to limit the bargaining power of financial institutions,” Ryu said. “The paper is connecting corporate cash-holdings to a broader question of market power in the financial sector.” 

According to Adriano Rampini, Professor of Finance and Economics at Duke University’s Fuqua School of Business, Ryu’s research offers a new way to think about how firms manage their finances over time. 

“Hanjoon’s job market paper is first rate and provides a new dynamic theory of firm financial slack based on financier bargaining power,” Rampini said. “It shows that firms choose to raise funds infrequently, and may even raise additional funds before running out of cash to reduce rent extraction by financiers.” 

Rampini, who holds a secondary appointment in the Department of Economics, noted that the idea may seem counterintuitive at first but becomes clear when bargaining power is considered. Traditionally, economists have explained infrequent financial actions as the result of fixed costs, he said. Ryu’s model instead suggests that firms act infrequently because they strategically choose when to bargain, which is what Rampini describes as a “novel theory of economic inaction based on the optimality of infrequent bargaining.” 

Ryu felt both lucky and proud to win the award — lucky, because of how he stumbled onto the research that led to him writing the paper, and proud because it was the culmination of all of his hard work during his time at Duke.  

“I was lucky to have my advisors and other faculty members at Duke who encouraged me to keep pushing onto it and gave guidance so that I could turn that initial idea into what has become my job market paper,” he said. 

At the same time, he views the recognition as validation of the lessons he learned during his doctoral training. 

“For many Ph.D. graduates, job market papers are the epitome of what they have learned in terms of how to do research,” Ryu said. “I’m proud not only because of my achievement, but because the award affirms the value of what I have gained during my time at Duke.”