Skip to the content


FB Magazine JUN 2020

PhD Students and Graduates' Research

Contemporary Accounting Research, forthcoming

Xiao Li

Xiao Li, Central University of Finance and Economics (Faculty PhD graduate)
Jeffrey Ng, The Hong Kong Polytechnic University
Walid Saffar, The Hong Kong Polytechnic University

We investigate the effect of mandatory international financial reporting standards (IFRS) adoption on trade credit. We document that firms in countries that adopt IFRS receive more trade credit from their suppliers, consistent with improved financial reporting quality and comparability playing a role in facilitating informal financing. This increase is larger for countries with a low level of societal trust, a poor pre-IFRS-adoption information environment, and stronger legal enforcement. These cross-sectional results suggest that the conditions under which higher quality information is made publicly available affect suppliers’ decisions to provide trade credit. This increase is also larger for firms with greater exposure to foreign markets, a finding that highlights the importance of more comparable international financial reporting standards in facilitating cross-country trade credit. We also find that IFRS adoption has a stronger positive effect on trade credit for firms with greater liquidity needs. Finally, we find that firms in countries that adopt IFRS also extend more trade credit to their customers. Overall, our results support the notion that financial reporting can have a causal effect on trade credit.

Review of Accounting Studies, 25(2), 726-777 (2020)

Janus Jian Zhang

Jeffrey Ng, The Hong Kong Polytechnic University
Walid Saffar, The Hong Kong Polytechnic University
Janus Jian Zhang, The Hong Kong Polytechnic University (Faculty PhD student) 

Policy uncertainty is an increasingly important issue in many economies. Extensive evidence indicates that higher policy uncertainty is associated with future negative macroeconomic and microeconomic conditions. In this paper, we examine how policy uncertainty affects banks’ accruals for loan losses. Consistent with banks signaling more expected loan losses, we document that in times of higher policy uncertainty, banks make more loan loss provisions. This positive association is more pronounced for banks that were previously less prudent in their risk-taking and loan loss reserving, indicating that less prudent banks are harmed more by loan losses in difficult times. We also show that higher attention paid to a bank’s financial reporting strengthens the role of loan loss provisions as a signal of expected loan losses. Overall, our paper offers insight into how, in the face of policy uncertainty, banks convey information about their loan portfolios to their stakeholders.

Academy of Management Annals, forthcoming

Yuen Lam Bavik

Yuen Lam Bavik, The Hong Kong Polytechnic University (Faculty PhD student)
Jason D. Shaw, Nanyang Technological University
Xiao-Hua (Frank) Wang, Beijing Normal University

Social support research proliferated across multiple disciplines for more than a half-century. This growth, as well as disciplinary differences, resulted in mixed views, conceptualizations, and operationalizations. This review synthesizes knowledge and empirical findings from more than 4,500 studies across disciplines. We summarize several characteristics of social support studied in the literature: quantity and quality, utilization, source, content, format, and consistency. We also identify four dynamic roles of social support in predicting individual outcomes directly, indirectly, and interactively (with stressors): a positivity catalyst, a positivity enhancer, a negativity buffer, and a negativity exacerbator. We find that the incongruence between social support, stressors, and individual characteristics accounts for the diverse roles of social support and mixed findings. Based on our analysis, we discuss how management scholars may draw insights from other disciplines to advance social support research and provide recommendations for future research.

Academy of Management Journal, forthcoming

Ning Liu

Ning Liu, City University of Hong Kong (Faculty PhD graduate)

This study develops a nuanced framework to unpack the heterogeneous mechanisms of institutional intermediaries’ efforts by aligning their bridging and buffering roles with the information and certification support they offer to clients. I further examine how these mechanisms explain firms’ intermediary choices in response to government regulations. Using a novel dataset of power plants across China, I find that the theorized intermediation mechanisms and way firms assess them are partially bounded by institutional complexities. Firms’ inexperience with regulations and their adoption of novel technologies are positively related to their selection of public intermediaries, with the former relationship strengthened when regulatory changes suggest a continuous need for policy updating. Meanwhile, firms’ non-compliance records and a lack of institutional linkage to the government are positively related to their reliance on private intermediaries’ buffering competency, with the latter relationship evident only in settings with an interventionist government. These findings contribute to the literature on the complex and dynamic value of intermediaries and firms’ intermediary choices at the intersection of management and government.