11. “The Long-Term Consequences of Short-Term Incentives” (with Alex Edmans and Allen Huang), Journal of Accounting Research, June 2022, 60 (3), 1007-1046. [Web Appendix]
This paper shows that short-term stock price concerns induce CEOs to take value-reducing repurchases and M&A. When vesting equity (our proxy for price concerns) increases, stock returns are more positive in the short-term surrounding these events but more negative in the long-term. Co-winner of the 2017 ICPM Research Award; Co-winner of the 2017 IRRC Institute Research Award; Presented at FIRS Conference, 2018; PSU Accounting Conference, 2018; EFA Meeting, 2018; LBS Accounting Symposium, 2018; Toulouse Corporate Governance Conference, 2018; MIT/Asia Conference, 2018; the UNC/Duke Fall Camp, 2017; Stanford Theory and Inference in Capital Market Research Conference, 2017; Featured in CNBC; Harvard Law Forum; VoxEU
This paper shows that short-term stock price concerns induce CEOs to take value-reducing repurchases and M&A. When vesting equity (our proxy for price concerns) increases, stock returns are more positive in the short-term surrounding these events but more negative in the long-term. Co-winner of the 2017 ICPM Research Award; Co-winner of the 2017 IRRC Institute Research Award; Presented at FIRS Conference, 2018; PSU Accounting Conference, 2018; EFA Meeting, 2018; LBS Accounting Symposium, 2018; Toulouse Corporate Governance Conference, 2018; MIT/Asia Conference, 2018; the UNC/Duke Fall Camp, 2017; Stanford Theory and Inference in Capital Market Research Conference, 2017; Featured in CNBC; Harvard Law Forum; VoxEU
10.“Consistency as A Means to Comparability: Theory and Evidence” (with Michael Iselin and Gaoqing Zhang), Management Science, June 2022, 68 (6), 4279-4300. [Web Appendix]
We model consistency-based financial statement comparability. We show analytically and empirically that optimal comparability should decrease with both the fundamental correlation and fundamental volatility of economic transactions. Presented at the FARS Midyear Conference, 2018; Yale SOM Fall Accounting Research Conference, 2017; Inaugural Indiana Hoosier Accounting Research Conference, 2017; U Penn - Wharton Spring Accounting Conference, 2017; Minnesota Empirical Accounting Research Conference, 2017
We model consistency-based financial statement comparability. We show analytically and empirically that optimal comparability should decrease with both the fundamental correlation and fundamental volatility of economic transactions. Presented at the FARS Midyear Conference, 2018; Yale SOM Fall Accounting Research Conference, 2017; Inaugural Indiana Hoosier Accounting Research Conference, 2017; U Penn - Wharton Spring Accounting Conference, 2017; Minnesota Empirical Accounting Research Conference, 2017
9. “Negative Peer Disclosure” (with Sean Cao and Gillian Lei), Journal of Financial Economics, June 2021, 140 (3), 815-837. [Web Appendix] [Data and Instructions]
We study how and why firms badmouth peer firms on social media, a behavior that we refer to as negative peer disclosure (NPD). Accepted by U of Connecticut Finance Conference, 2020; MFA Meeting, 2020; FARS Midyear Conference, 2020; ASSA Meeting (CAFR Research Workshop - Fintech), 2020; the 3rd Conference on Intelligent Information Retrieval in Accounting and Finance, 2019; Invited by SEC (DERA); UVA-Darden Mini Conference, 2019; Stanford Accounting Summer Camp, 2019
We study how and why firms badmouth peer firms on social media, a behavior that we refer to as negative peer disclosure (NPD). Accepted by U of Connecticut Finance Conference, 2020; MFA Meeting, 2020; FARS Midyear Conference, 2020; ASSA Meeting (CAFR Research Workshop - Fintech), 2020; the 3rd Conference on Intelligent Information Retrieval in Accounting and Finance, 2019; Invited by SEC (DERA); UVA-Darden Mini Conference, 2019; Stanford Accounting Summer Camp, 2019
8.“Imperfect Accounting and Reporting Bias” (with Allen Huang and Wenyu Wang) , Journal of Accounting Research, September 2017, 55 (4), 919-962. [Web Appendix]
Errors and bias are both inherent features of accounting. While errors discourage reporting bias by lowering earnings’ value relevance, they also incentivize bias by providing camouflage. The two counteracting effects give rise to a hump-shaped relationship between the incidences of intentional and unintentional misstatements, which we show analytically and empirically.
Presented at the Minnesota Empirical Accounting Research Conference , 2015; Accepted by MIT/Asia Conference in Accounting, 2016; FARS Midyear Conference, 2016; SMU Accounting Symposium, 2015; GMU Conference on Investor Protection, Corporate Governance, and Fraud Prevention, 2015
Errors and bias are both inherent features of accounting. While errors discourage reporting bias by lowering earnings’ value relevance, they also incentivize bias by providing camouflage. The two counteracting effects give rise to a hump-shaped relationship between the incidences of intentional and unintentional misstatements, which we show analytically and empirically.
Presented at the Minnesota Empirical Accounting Research Conference , 2015; Accepted by MIT/Asia Conference in Accounting, 2016; FARS Midyear Conference, 2016; SMU Accounting Symposium, 2015; GMU Conference on Investor Protection, Corporate Governance, and Fraud Prevention, 2015
7.“Equity Vesting and Investment” (with Alex Edmans and Katharina Lewellen), Review of Financial Studies, July 2017, 30 (7), 2229-2271. (Lead Article, Editor’s Choice). [Web Appendix]
We introduce a new measure of a manager's myopic incentives - the price sensitivity of equity vesting over the coming year (VESTING) that is unlikely to be driven by current contracting environment. It is negatively associated with investment and positively associated with analyst forecast revision and optimistic earnings guidance.
Listed Among the Top 100 Business School Studies with Social Impact by Financial Times; Co-winner of the 2017 IRRC Institute Research Award; Accepted by FIRS Conference, 2016; WFA Meeting, 2015 (Winner of the Wharton School - WRDS Award for the Best Empirical Finance Paper); 2nd University of Washington Summer Finance Conference; Edinburgh Corporate Finance Conference, 2014; FSU SunTrust Beach Conference, 2014; Utah Winter Accounting Conference, 2014; Financial Research Association Conference, 2013; Featured in the Swedish Institute for Financial Research’s workshop on “CEOs, Boards, and other High Potentials"; Harvard Law Forum; Harvard Business Review; Economist; Forbes; Washington Post; Financial Times; Business Strategy Review; Yahoo; Bloomberg; CNBC; Financial Times; Morgan Stanley White Paper; VoxEU
We introduce a new measure of a manager's myopic incentives - the price sensitivity of equity vesting over the coming year (VESTING) that is unlikely to be driven by current contracting environment. It is negatively associated with investment and positively associated with analyst forecast revision and optimistic earnings guidance.
Listed Among the Top 100 Business School Studies with Social Impact by Financial Times; Co-winner of the 2017 IRRC Institute Research Award; Accepted by FIRS Conference, 2016; WFA Meeting, 2015 (Winner of the Wharton School - WRDS Award for the Best Empirical Finance Paper); 2nd University of Washington Summer Finance Conference; Edinburgh Corporate Finance Conference, 2014; FSU SunTrust Beach Conference, 2014; Utah Winter Accounting Conference, 2014; Financial Research Association Conference, 2013; Featured in the Swedish Institute for Financial Research’s workshop on “CEOs, Boards, and other High Potentials"; Harvard Law Forum; Harvard Business Review; Economist; Forbes; Washington Post; Financial Times; Business Strategy Review; Yahoo; Bloomberg; CNBC; Financial Times; Morgan Stanley White Paper; VoxEU
6.“Short Selling and Earnings Management: A Controlled Experiment” (with Allen Huang and Jonathan Karpoff ), Journal of Finance, June 2016, 71(3), 1251-1294. [Web Appendix] [Slides] Pilot firms’ discretionary accruals and likelihood of meeting or marginally beating earnings targets drop significantly during the Regulation SHO's pilot program, and then revert to pre-program levels when it ends. The probability of fraud detection and price efficiency increase for the pilot firms during this period.
Invited presentation by the SEC/Maryland’s Conference on Financial Regulation, 2015; CEAR /GSU Finance Symposium on “Corporate Control Mechanisms and Risk”, 2014; Accepted by MIT/Asia Conference, 2014; FARS Midyear Conference, 2014; HKUST Accounting Symposium, 2013; CFEA Conference, 2013; UC Berkeley Multi-disciplinary Conference on Fraud and Misconduct, 2013; Featured in CFA Digest
Data and Codes to replicate our principal findings (README)
Invited presentation by the SEC/Maryland’s Conference on Financial Regulation, 2015; CEAR /GSU Finance Symposium on “Corporate Control Mechanisms and Risk”, 2014; Accepted by MIT/Asia Conference, 2014; FARS Midyear Conference, 2014; HKUST Accounting Symposium, 2013; CFEA Conference, 2013; UC Berkeley Multi-disciplinary Conference on Fraud and Misconduct, 2013; Featured in CFA Digest
Data and Codes to replicate our principal findings (README)
5.“Foreign Institutional Ownership and the Global Convergence of Financial Reporting Practices” (with Mark Maffett and Bohui Zhang), Journal of Accounting Research, June 2015, 53(3), 593-631 . [Web Appendix]
An increase in U.S. institutional investment in emerging market firms improves these firms' reporting comparability to their U.S. industry peers. We rely on the JGTRRA Act of 2003 to establish causality. Accepted by MIT/Asia Conference, 2014; HKUST Accounting Symposium, 2012; SMU Accounting Symposium, 2012; ; Featured in Harvard Law Forum
An increase in U.S. institutional investment in emerging market firms improves these firms' reporting comparability to their U.S. industry peers. We rely on the JGTRRA Act of 2003 to establish causality. Accepted by MIT/Asia Conference, 2014; HKUST Accounting Symposium, 2012; SMU Accounting Symposium, 2012; ; Featured in Harvard Law Forum
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4.“Does Stock Liquidity Enhance or Impede Firm Innovation?” (with Xuan Tian and Sheri Tice), Journal of Finance, October 2014, 69 (5), 2085–2125. [Web Appendix] [Slides]
Exogenous increases in stock liquidity generated by multiple regulatory changes impede innovation, by exposing firms to hostile takeovers and by attracting non-dedicated investors. Accepted by WFA Meeting, 2011; Paris Corporate Finance Conference, 2011; FMA Meeting, 2011 (Semifinalist for the Best Paper Award in Corporate Finance) |
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3.“Inside Debt and the Design of Corporate Debt Contracts” (with Divya Anantharaman and Guojin Gong), Management Science, May 2014, 60 (5), 1260-1280. [Web Appendix]
CEO debt-like compensation of greater amount and lower seniority leads to lower promised yield and fewer covenants in corporate loans. We use state personal income tax rates as an IV.
Accepted by LBS Accounting Symposium, 2012; Utah Winter Accounting Conference, 2011; Singapore International Conference on Finance, 2011; AAA Mid-Atlantic Meeting, 2011 (Winner of the Best Paper Award). Featured in Harvard Law Forum, WSJ
CEO debt-like compensation of greater amount and lower seniority leads to lower promised yield and fewer covenants in corporate loans. We use state personal income tax rates as an IV.
Accepted by LBS Accounting Symposium, 2012; Utah Winter Accounting Conference, 2011; Singapore International Conference on Finance, 2011; AAA Mid-Atlantic Meeting, 2011 (Winner of the Best Paper Award). Featured in Harvard Law Forum, WSJ
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2.“The Effect of Liquidity on Governance” (with Alex Edmans and Emanuel Zur), Review of Financial Studies, June 2013 , 26(6), 1443-1482. [Web Appendix] [Slides]
Stock liquidity facilitates governance through “voice” (intervention), and more through “exit” (trading). We use schedule 13 filings to capture monitoring intent and decimalization to identify. Accepted by WFA Meeting, 2013; U of Washington Summer Finance Conference, 2012; Paris Corporate Finance Conference, 2012; FIRS Conference, 2012; CFEA Conference, 2011. Featured in Harvard Law Forum, VoxEU, Oxford OUPBlog |
1.“Stock Market Liquidity and Firm Value” (with Thomas Noe and Sheri Tice), Journal of Financial Economics, October 2009, 94 (1), 150-169.
We make use of decimalization and show that an exogenous increase in stock liquidity improves firm performance by enhancing the efficiency of feedback mechanism and equity compensation.
We make use of decimalization and show that an exogenous increase in stock liquidity improves firm performance by enhancing the efficiency of feedback mechanism and equity compensation.
Other Publications:
“Insurance Coverage Predicts Patient Outcomes in Patients Transferred between Hospitals” (with Michael Usher, Christine Fanning, Madeline Carol, Amay Parikh, Anne Joseph, and Dana Herrigel), Journal of General Internal Medicine, December 2018, 33(12), 2078-2084.
We show that patients without insurance coverage are more likely to be transferred earlier and that these patients have higher 24-hour and inpatient mortality than the privately insured. Mortality is highest for patients transferred from privately owned hospitals to municipal hospitals.
“Insurance Coverage Predicts Patient Outcomes in Patients Transferred between Hospitals” (with Michael Usher, Christine Fanning, Madeline Carol, Amay Parikh, Anne Joseph, and Dana Herrigel), Journal of General Internal Medicine, December 2018, 33(12), 2078-2084.
We show that patients without insurance coverage are more likely to be transferred earlier and that these patients have higher 24-hour and inpatient mortality than the privately insured. Mortality is highest for patients transferred from privately owned hospitals to municipal hospitals.
