Karolina Krystyniak is an Associate Professor of Finance at Ontario Tech University. In this interview, we learn about Krystyniak’s academic and professional journey, research work, and experiences as a professor.

Career Highlights

• Associate Professor of Finance, Ontario Tech University
• Fulbright Scholar
• PhD in Finance, Zicklin School of Business, Baruch College, City University of New York (CUNY)
• Master of Economics with a Major in Finance and Banking, Warsaw School of Economics (SGH)
• CFA Charterholder
• Volunteer at St. Theresa Shrine assisting with event management, grant applications, and fundraising initiatives
• Former volunteer, Equity, Diversity and Inclusion Committee at St. Joseph Catholic School
• Former Volunteer Board Member, Inclusion Action in Ontario
• Multilingual: English, French, German, and Polish

When and why did you decide to pursue academia?

After completing my bachelor’s and my master’s degrees, I worked as an analyst while exploring what to do next. I had done some research during my studies and enjoyed it.

I’m from Poland. I applied for and received a Fulbright Scholarship, which required me to apply for a PhD program. I was accepted into Baruch College in New York, and it was an amazing opportunity to live there for five years.

While applying for my PhD, I was also recruited by a consulting firm, which would have led me down a very different career path. In retrospect, I’m extremely glad I chose academia.

When did you decide to pursue the CFA designation?

I passed all three exams before starting my PhD. I completed a summer internship in investment banking in London and thought I would be going into the industry. It was easier to take my exams then because I was already studying as a graduate student.

Having a global designation differentiated my CV to help me work abroad, which was my goal.

How has the CFA designation helped you as an academic and as a teacher?

My master’s was in finance, and my bachelor’s was in accounting, so I had exposure to a lot of topics in the field. However, as a student, you tend to learn things separately. What the CFA designation did for me was to bring these disparate topics together. For example, you can see how accounting is connected to valuations with the CFA designation.

Understanding how it all works together gave me a strong foundation for starting my PhD. Additionally, my earlier research focus was more on the investment side, and my CFA background helped.

In terms of being a teacher, my CFA designation plays a major role. In my first year at Ontario Tech University, one of the students, aware that I was the only full-time professor with a CFA designation, asked about Ontario Tech joining CFA Institute’s University Affiliation Program. I applied right away. Mapping the CFA curriculum to our program and ensuring we met the ethical standards required considerable effort, and I have redesigned my courses to align with the CFA curriculum. Within a few months, we were accepted.

Our university is relatively new, so offering a clear path to a designation is incredibly helpful for our students to get their foot in the door in the competitive Toronto job market.

CFA Society Toronto has also offered us access to great guest speakers who we’ve invited to our classes, and I’ve taken my students to Society events. For finance students, it’s tough to figure out what they want to do because of the vastly different jobs available, so having access to professionals here really helps them start thinking about their career paths and how to get there. This has been valuable for many of our students who, despite being from Durham region, don’t feel as connected to Toronto and the opportunities available here.

How do you pick your research projects and what projects are you currently undertaking?

Earlier in my career, much of my research focused on institutional investor trading, investor behaviour, and some aspects of behavioural finance. Gradually, I shifted more toward corporate finance. My recent research has focused on corporate capital structure and credit ratings. Last year, I coauthored a paper on cryptocurrencies.

Now that I have received tenure, I plan to explore some topics close to my personal interests. I’m passionate about equity, and outside of work, I advocate for inclusion of people with disabilities. An example of research I did in this area is a recently published paper on female CFOs and women in finance, examining stereotypes around risk aversion and typical feminine psychological aspects that drive financial decision-making.

In your research work, what are some insights you have uncovered that challenge conventional wisdom on markets and economics?

One of the broader conclusions I’ve drawn is that science and research are very dynamic, and things we consider established truths are not necessarily such. As we gain access to better data and take a different analytical approach or refocus our thinking, what we once believed to be established truths can change.

One thing I love about research is that there are questions people have been answering for the past 50 years, but researchers can still add more to the answers.

I’ve co-authored a paper on credit ratings, and previous research indicated that credit rating agencies have become more conservative over time. We show that the apparent tightening of standards found by prior studies is sensitive to model specification and results from employing a potentially imprecise measure of rating standards. We conclude that the decline in the average credit rating over time is caused by an increase in the default risk of the average-rated firm, and credit rating standards have remained relatively consistent over the sample period.

In my recent paper about female CFOs, we explored the observation that female CFOs have historically taken on less leverage. This has been attributed to women being more risk averse and less confrontational. However, our findings suggest that this may not necessarily be true; female CFOs are likely equally as risk averse as their male counterparts. Our next step is to examine the causes of the differences in capital structures between male and female CFOs. Perhaps financial institutions could be institutionally biased in terms of gender, even among top-level executives.

You are interested in market sentiment. In that vein, GameStop stock has been up considerably again in the past two days (as of the May 2024 interview), which is reminiscent of the “meme-stock” craze we saw in 2021. What are your thoughts on this?

Retail investors have unprecedented access to knowledge and communication platforms like Reddit and Discord. It’s a significant shift because institutional investors were historically the only “informed” players. Today, retail investors not only have access to more information, but also the power of numbers, which can lead to disruptions such as GameStop saga.

When the GameStop rally occurred in 2021, I taught finance majors equity valuation. Many of my students were interested in the class because of what was occurring. It served as a great lesson in valuation and market sentiment.

What do you like about teaching, and what are the key challenges?

When I first started teaching, I found speaking in a room of 150 students a bit scary. With time, however, I gained confidence, and it’s become fun and rewarding. I like being able to make even a small impact on my students. I am committed to student mentoring, and it feels great to support students on their journeys. I support my students in competitions and bring them to events, and it’s in these moments outside the classroom that I get to know them at a deeper level.

The current approach to teaching, whether at the elementary or university level, has been “cookie cutter,” often catering to a single learning style. Generally, education has struggled to accommodate diverse students needs. I am actively thinking about implementing a universal design for learning to make learning accessible to all students. For example, some students may struggle with auditory processing or may get anxious in the traditional classroom setting. I started rethinking my teaching methods during the pandemic. I realized you can’t just take what you do in the classroom and throw it on Zoom.

Over time, I have redesigned my classes to prioritize hands-on activities such as problem-solving and meaningful discussions around real-life examples. I also incorporate short videos to explore specific topics outside of class. This has been an intense learning experience for me.

Why did Ontario Tech set up the Master of Financial Data Analytics Program?

Initially, our department, the Faculty of Business and Information Technology, offered only undergraduate programs in business and IT and graduate programs in IT-related fields. We did not have a master’s program in business and aimed to expand into this area.

Data analytics is ubiquitous, impacting every aspect of our lives through data collection and processing. Our department is unique because it integrates business and IT expertise, making it ideal for designing a program that combines finance with a strong emphasis on data analytics. Our students gain exposure to AI, machine learning, and data mining alongside a strong theoretical foundation in finance.

A crucial component of the program is the internship or the alternative capstone project. We ensure the capstone project is research-oriented, allowing our students to leverage various databases and market data for their research project. We are also partnered with the Global Association of Risk Professionals (GARP), supporting students aiming for the Financial Risk Manager designation.

Employers today seek individuals who not only understand theory but can also handle big data and extract useful information from it. We aim to equip our students with these critical skills as they enter the job market.

What advice do you share with students as they embark on their careers?

I tell my students to try to go abroad, travel, and experience life in different places. I have lived in Poland, Canada, the US, and briefly in the UK. Being in a different country, learning how to adapt to the culture and find a job, teaches you valuable skills that can be applied to both work and life.

I also tell students that they don’t have to know exactly what they’re going to do. It’s normal to change careers. Employers are looking for individuals who are dedicated and willing to learn. So, try different things, don’t be intimidated and don’t feel like you’re not good enough to pursue an opportunity.

FUN FACTS

What is your top bucket list travel destination?  

Japan, especially after watching many documentaries about Japanese cuisine.

What was the last interesting book you read/show you binge-watched? 

Book: Kate Quinn’s The Rose Code, a historical fiction novel that follows three British female codebreakers during World War II. The audiobook is very well narrated! Show: Succession, of course. It’s both incredibly depressing and funny.

What is your favourite hobby/something you like to do to de-stress?

I returned to playing tennis two years ago, and I love it! It’s such a fun sport and a great way to clear my mind.

This interview has been edited for length and clarity.