International College of Economics and Finance

"Be Interested in What You Explore, And The Quality Will Look After Itself"

Valentin Stepanov

Valentin Stepanov

Valentin Stepanov, who is in his first year of master’s studies at ICEF, got his graduate paper The impact of innovation news coverage on illiquid stocks: the case of the US market accepted by the European Journal of Innovation Management. Guiding Valentin’s research was Professor Elena Fedorova of HSE University. Here’s what Valentin thinks makes innovation a permanent source of inspiration, what paper submission process involves, and what makes preparing a paper a useful experience for studies and career progress.

About his academic experience

After earning my bachelor’s from the Faculty of Economic Sciences, I worked one year at DOM.RF. My managers offered me to stay permanently, but I didn’t feel I had enough professional confidence, so I decided to do a degree that would provide me with hands-on experiences tied to in-depth academic objectives – the ICEF’s Master of Financial Economics degree. Rated top in numerous ratings, this degree offers an impressive choice of solid courses, and among them big data and machine learning, which attract me most. For the time being, I am fully concentrated on studying and working on for my thesis, but I think I might combine them with work when I’m in my second year or devote myself entirely to research. 

While preparing my paper for publication, I realized how great an impact one’s academic experience can have on the choice of a career and perception of the courses chosen. Working on that paper had been a great way to broaden my horizons. It forms part of what we call the fundamental academic education – something which allows to set ambitious career goals. 

About his choice of research topic

One of the keys to academic success lies in having interest in your chosen topic. Be interested in what you explore, and the quality will look after itself. Many students tend to lose motivation when writing coursework. I, however, embarked on a topic that inspired me to dig deeper and has set me on a lengthy road to research development. The topic I explore is innovation – something which is always relevant and relates to vital business processes. All classical business models view innovation as a driver of economy, be it a developed or emerging market. My paper has its focus on stock markets. 

As a unique phenomenon, innovation defies generalization, and there are circumstantial aspects to be considered in every analysis. One thing I and my supervisor were exploring was response to innovation – i.e. how a company’s stock performance affects the stock market under the influence of a significant economic event. Insider trading was beyond our scope on account of the American (and that’s the American market that my paper discusses) regulators being in full compliance with their obligations. So, our results enjoy a high degree of theoretical validity.

The results we have obtained sound quite logical and positive for any type of innovation, be it in product manufacture, logistics, design, etc. Our study has enabled a conclusion that those companies that seem to be “unpopular” with the investors for lack of credibility for innovation, caused in turn by lack of information, often have their assets undervalued. When that’s the case, the regulator is required to stimulate growth by offering, among others, loans for innovation projects or funding for research or product promotion – a whole separate section of industrial strategy or economic development policy.

The author of The impact of innovation news coverage on illiquid stocks: the case of US market uses some of the most advanced methodologies that employ author-developed terminology, machine learning, FinBERT model pre-trained on dedicated texts, and Top2vec model for understanding narratives. The study uses as a source of texts the archived news available on Benzinga, a news and analysis service for investors.

From the regulatory policy perspective, my paper may be of some interest and can even contribute to the promising, though undervalued, companies gaining extra funding. These “unpopular” companies do need extra support and a strategy for getting their innovation-related activities covered. In this sense, our study can serve as a basis for formulating changes to regulatory policy.

About his paper

To turn my graduate paper into an academic paper – there’s a difference between them – it had to be reworked to meet the standards of the peer-reviewed journal. This required extra calculations, translation, editing, etc. We were looking to submit the paper to those journals that covered my topic. Having reviewed my submission, the European Journal of Innovation Management has accepted it for publication after a long process that involved reworking the text and doing additional calculations required by the journal. It also involves using a different methodology to verify our results from the perspective of economic logic – the verification involved the use of additional sources that were not included in the original version of the paper. The preparation for publication is still underway.

About his portfolio and networking

Getting my paper published can benefit me in several different ways. For the time being I can’t put it on my portfolio until the preprint is confirmed for publication. This is an important step for me. Students normally don’t plan to get their papers published, but my case has shown me that it is all doable. Working on my paper and getting it accepted for publication has opened a new door for me professionally. It has incentivized me to pursue academic development and inspired confidence that I would land a rewarding job if I should choose to go into industry. My academic experience will certainly come in handy also in data management, a direction I might take in the future. 

Working on that paper has largely broadened my access to the research community

Writing a paper involves communicating with domain experts and researchers in your chosen field. You learn how to maintain collaborative research, present ideas, argument and defend your point of view, prove the viability of your model. These are very important skills. Discussions and constructive criticism – from researchers and my fellow students – turned out to be the most vital part of my work that led me to make important adjustments and improve the quality of my conclusions. One important observation that I made is that a good hypothesis statement is often a product of a carefully structured presentation. Your ability to structure is key to securing the approval from your supervisor and other specialists. So, in this sense, writing that academic paper has been of great benefit to me, facilitating my progress as a researcher.

Elena Fedorova, Professor at HSE University, Valentin Stepanov’s research supervisor

Elena Fedorova, Professor at HSE University, Valentin Stepanov’s research supervisor

The core part of the paper was completed a few months before thesis defense, and there was much rewriting to be done before the paper was ready for submission to the prestigious Western journal. Valentin has done a great job. He didn’t stop to rework his paper after graduation. It took him about a month to complete his data array, redesign his calculation model based on my comments and to rewrite the text.

Scientific journals want submissions with intensive novelty and sophisticated research methods. Theoretical novelty is what our paper offers in the first place, for the impact of innovation news coverage on illiquid stocks remains a poorly explored issue. We made use of some advanced methods to evaluate the impact of the innovation types and to study the effect of the most popular innovation-related topics coverage. The problem statement itself sounds very interesting. I think the editors were particularly impressed by the data array we have processed – more than 4 million observations.  

This year, the papers by some of my graduate and undergraduate students appeared in several journals including the top Western ones. I really admire what my students do. The methods they are using are complex enough and interesting to follow, and they demonstrate a high degree of independence. My role as their supervisor is to set the tasks of their research correctly. As someone with a vast experience with publications, I know which topics stand a better chance of getting covered, where in the study the author should concentrate more and on what, and which presentation techniques can work best for the paper. In all the rest, my students are free to exercise creativity. The most important thing is the drive from the research itself. Without it, writing a quality paper is virtually impossible.