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Research Output

Selected Journal Articles
John Wei
Li Guo, Fudan University
Frank Weikai Li, Singapore Management University
K.C. John Wei, The Hong Kong Polytechnic University

Journal of Financial Economics, forthcoming


The authors examine the value and efficiency of analyst recommendations through the lens of capital market anomalies. They find that analysts do not fully use the information in anomaly signals when making recommendations. Specifically, analysts tend to give more favourable consensus recommendations to stocks classified as overvalued, and, more importantly, these stocks subsequently tend to have particularly negative abnormal returns. Analysts whose recommendations are better aligned with anomaly signals are more skilled and elicit stronger recommendation announcement returns. Their findings suggest that analysts’ biased recommendations could be a source of market friction that impedes the efficient correction of mispricing.

Feifei Huang
Feifei Huang, The Hong Kong Polytechnic University
Vincent Chi Wong, City University of Hong Kong
Echo Wen Wan, The University of Hong Kong

Journal of Consumer Research, 46(5), 936-955 (2020)


The present research proposes a new perspective to investigate the effect of product anthropomorphism on consumers’ comparative judgment strategy in comparing two anthropomorphized (vs. two nonanthropomorphized) product options in a consideration set. Six experiments show that anthropomorphism increases consumers’ use of an absolute judgment strategy (vs. a dimension-by-dimension strategy) in comparative judgment, leading to increased preference for the option with a more favorable overall evaluation over the option with a greater number of superior dimensions. The effect is mediated by consumers’ perception of each anthropomorphized product alternative as an integrated entity rather than a bundle of separate attributes. The authors find the effect to be robust by directly tracing the process of participants’ information processing using MouseLab software and eye-tracking techniques, and by self-reported preferences and real consumption choices. Moreover, the effect is moderated by the motivation to seek maximized accuracy or ease. These studies have important implications for theories about anthropomorphism and comparative judgment as well as marketing practice.

Yuwei Jiang
Linying (Sophie) Fan, The Hong Kong University of Science and Technology (Faculty PhD graduate)
Xueni (Shirley) Li, Hong Kong Baptist University (Faculty PhD graduate)
Yuwei Jiang, The Hong Kong Polytechnic University

Journal of Consumer Research, 46(1), 82-98 (2019)


Although marketing offers with flexible price options within a range of two endpoints (i.e., range offers) have been frequently used in various contexts, such as discount ranges, flexible pricing, and deal quotations, our understanding of how consumers react to this pricing strategy is rather limited. The current research suggests that consumers’ reaction to range marketing offers may depend on their general sense of scarcity. Eight studies show that reminders of resource scarcity induce a promotion orientation among consumers, which consequently increases consumers’ favourability towards range marketing offers. This effect is found to strengthen when the range of the offer becomes wider, and to weaken when the range offer cannot provide a better-than-reference outcome. These findings result in novel theoretical insights about the ways consumers react to range marketing offers. From a managerial perspective, this research offers tactics that companies can use to potentially increase the acceptance and effectiveness of range marketing offers.

Xiaowei Mei
Mahdi Moqri, Iowa State University
Xiaowei Mei, The Hong Kong Polytechnic University
Liangfei Qiu, University of Florida
Subhajyoti Bandyopadhyay, University of Florida

Journal of Management Information Systems, 35(4), 1188-1217 (2018)


In this study, the authors estimate the effect of "online following," a basic form of online social interaction, on members' contributions in open source software (OSS) communities, using a unique longitudinal data set containing information on over 4 million OSS developers and their social interactions over seven years. They find that obtaining new followers in the previous month has a significant positive effect on developers' level of contribution in the current month. The effect carries over to the next month although the marginal effect decreases. The authors further find that the effect of new followers on their contribution level is much stronger for freelancers than those with company affiliation. In contrast to the previous literature that posited the existence of non-monetary incentives for developers who contribute to the OSS communities, their result suggests the existence of incentives that are tied to future monetary rewards for developers on these platforms. Their findings have important implications for the OSS platforms as well as the OSS community. OSS platform designers may consult their results to learn about the social features that affect members' contribution. The authors also encourage OSS community to use the "following" feature more prominently on OSS platforms to incentivize higher contribution levels to the projects.

Wu Liu
Zhenyu Liao, Washington University in St. Louis
Wu Liu, The Hong Kong Polytechnic University
Xian Li, CITIC Securities Co., Ltd.
Zhaoli Song, National University of Singapore

Journal of Applied Psychology, 104(1), 34-51 (2019)


Research on leader-member exchange (LMX) has predominantly taken a dyadic relationship perspective to understand the differences in overall exchanges across leader-member dyads, while neglecting the within-dyad exchange dynamics across a series of episodic resource transactions. Drawing from the literature on equity and reciprocity principles of social exchange, the authors develop and test a model of leader-member episodic resource transactions that delineates the momentary psychological mechanism and the boundary condition under which episodic resource contribution surplus generates member subsequent reciprocations. Multilevel polynomial regression analyses of 600 episodic exchange responses from 73 employees show that resource contribution surplus in an exchange episode increased state work engagement immediately following the episode and member resource contribution in the next episode by evoking member momentary sense of obligation to reciprocate. Additionally, the between-dyad LMX relationship quality attenuated these effects by reducing the likelihood to feel obligated to reciprocate due to episodic resource contribution surplus. This research highlights the microdynamic transaction nature of the exchanges between leaders and members and provides insight into how leader-member dyads exchange resources in episodic interactions.

Katrina Lin
Katrina Jia Lin, The Hong Kong Polytechnic University
Krishna Savani, Nanyang Technological University
Remus Ilies, National University of Singapore

Journal of Applied Psychology, forthcoming


Drawing on self-determination theory, this research investigates whether the motivation behind employees' helping behaviours is associated with their positive affect and their subsequent help provision, and whether citizenship pressure moderates these relationships. A recall-based experiment and an experience-sampling study capturing helping episodes among full-time employees found that when employees helped coworkers because of higher autonomous (controlled) motivation in a helping episode, they experienced higher (lower) positive affect, and they had stronger (weaker) helping intentions and helped coworkers more (less) subsequently. The authors further found that citizenship pressure enhanced the positive relationship between episodic autonomous motivation and positive affect. Overall, the results challenge the universality of the "doing good-feeling good" effect, and explicate the joint roles of citizenship pressure and helpers' episodic motivation in influencing employees' positive affect and their subsequent helping behaviours.

Gerald Gorn
Zhongqiang (Tak) Huang, The University of Hong Kong
Yitian (Sky) Liang, Tsinghua University
Charles B. Weinberg, The University of British Columbia
Gerald J. Gorn, The Hong Kong Polytechnic University

Journal of Marketing Research, 56(2), 179-196 (2019)


Sleepiness, the subjective feeling of the propensity to fall asleep, is a common, everyday experience that can be induced by various factors, such as sleep quality, sleep deprivation, ingestion of certain substances, or belief about how much sleep a person needs. Despite its prevalence, sleepiness and its influence on consumption behaviour have rarely been linked in the research to date. The present research helps fill this void by uncovering the novel impact of sleepiness on consumer variety-seeking behaviour. The studies, using various methods and all involving consequential choices, revealed that sleepier consumers tended to seek more variety. The driver of this effect was found to be a need for arousal to maintain wakefulness. The authors also show that variety-seeking behaviour is effective in partially reducing sleepiness. The effect of sleepiness on variety seeking uncovered in this research is somewhat nonintuitive, in the sense that, a priori, one might expect sleepiness to be more likely to decrease rather than increase exploratory behaviour. The authors discuss implications of the findings for different research areas and for marketing practice.

Chung-Lun Li
Chung-Lun Li, The Hong Kong Polytechnic University
Nicholas G. Hall, The Ohio State University

Operations Research, 67(1), 123-142 (2019)


The authors study how design decisions in project planning affect the cost of execution. In organizing a project's tasks into work packages, trade-offs arise. Defining small work packages increases project complexity and workload, and reduces economies of scale, whereas defining large work packages reduces concurrent processing and adversely affects cash flow. Their work is apparently the first to study this trade-off. They consider the objective of minimizing total project cost, subject to a deadline on project makespan. For serial task networks, they describe an efficient algorithm that finds optimal work package sizes. For acyclic task networks, they develop a heuristic method and a lower bound for the unary NP-hard problem. A computational study shows that their heuristic routinely delivers near-optimal solutions that substantially improve on those found by benchmark procedures. The results demonstrate the value of deliberately varying work package sizes within a project, in contrast to typical project management practice. Related issues including multiple serial paths in parallel, task incompatibility, and generalized precedence constrained work packages are also discussed. Their work enables more precise planning of work packages to improve performance, documents the value of integrating the planning of work packages and schedules, and provides insights that guide resource allocation decisions.

Walid Saffar
Narjess Boubakri, American University of Sharjah
Walid Saffar, The Hong Kong Polytechnic University

Journal of Financial and Quantitative Analysis, 54(3), 1313-1346 (2019)


Using a large sample of privatized firms, the authors find that state ownership is significantly positively associated with the use of bank debt financing, suggesting that privatized firms benefit from the soft budget constraint associated with state ownership. They further find that the relation is more pronounced in countries with high government ownership of banks, high corruption in bank lending, a left-oriented government, and a collectivist national culture, which provides additional support for the soft-budget-constraint view. Finally, in external validity tests, the authors find that state ownership affects other aspects of debt structure, such as debt maturity and debt security.

Jungmin Kim
Jun-Koo Kang, Nanyang Technological University
Jungmin Kim, The Hong Kong Polytechnic University

Management Science, forthcoming


The authors examine whether family firms invest more in employee relations than nonfamily firms. Using the variation in state-level changes in inheritance, gift, and estate taxes as an exogenous shock to family control, they find that family firms, particularly those in which a founder serves as CEO or those in which a family member serves as a director on the board, treat their employees better than nonfamily firms. More importantly, family firms focus on investing in employee relations that help alleviate labour-related conflicts and controversies, possibly to avoid a negative family reputation among stakeholders. Family firms' better treatment of their employees is also evident when they use a difference-in-difference test to exploit changes in family firm status due to (sudden) deaths of family members and firms' inclusion in Fortune's "100 Best Companies to Work For" list to identify employee-friendly treatment. The authors further find that family firms in the early stage of their life cycle invest more in employee relations when they operate in labour-intensive industries in which the benefits from family owners' monitoring of employees are expected to be large. Moreover, they find that while nonfamily firms' investment in employee relations is impeded by several constraints such as short-term investor pressure, managerial myopia, and managerial agency problems, family firms do not suffer from such constraints. These findings help explain why underinvestment in employee relations is prevalent in public firms despite potential long-term benefits from such intangible investment.

Jimmy Jin
Shengli Li, Peking University
Hsing Kenneth Cheng, University of Florida
Yong Jin, The Hong Kong Polytechnic University

Production and Operations Management, 27(11), 1928-1939 (2018)


This research analyses the optimal distribution strategy of enterprise software by taking into account the distinct features of enterprise software for both the short‐run problem, in which the software quality is fixed, and the long‐run problem, in which the software quality becomes part of the strategic decisions. The results indicate that in the presence of high unfit cost relative to the customization cost, the dual channel strategy exists and generates the highest profit for the firm and the highest social welfare. When the unfit cost is low relative to the customization cost, the SaaS channel strategy becomes the best strategy for both the firm in terms of profitability and society in terms of social welfare. This key finding is robust in that it holds for both the short‐run problem and the long‐run problem.

Yangyang Chen
Yangyang Chen, The Hong Kong Polytechnic University
Abhinav Goyal, University of Liverpool
Madhu Veeraraghavan, T.A. PAI Management Institute
Leon Zolotoy, University of Melbourne

Journal of Financial and Quantitative Analysis, forthcoming


The authors study how media coverage impacts pricing of IPOs around the world. Higher media coverage in the pre-IPO period leads to lower IPO initial returns. The effect is mitigated in countries with better financial reporting quality, greater shareholder rights protection, and more stringent media censorship, and for IPOs "certified" by reputable intermediaries, while it is amplified in countries with higher levels of media penetration and media trust. Further, IPOs with higher pre-IPO media coverage have lower ex-post price revision volatility. Their findings suggest that higher pre-IPO media coverage reduces information asymmetry among investors, leading to less underpriced IPOs.

Liu Wu
Xu Huang, Hong Kong Baptist University
Erica Xu, Hong Kong Baptist University
Lei Huang, Auburn University
Liu Wu, The Hong Kong Polytechnic University

Journal of Applied Psychology, 103(10), 1101-1120 (2018)


Challenging voice, defined as verbal expressions of opinions, ideas, or concerns to constructively change and modify current operations, is believed to improve organizational or unit functioning. It remains undetermined in the literature, however, whether employees engaging in such voice behavior tend to receive favorable or unfavorable responses from managers.

Drawing from social persuasion theory, the authors theorize that managers tend to give more positive evaluations to employees who engage in a moderate frequency of promotive/prohibitive voice than those who either rarely speak up or speak up very frequently. Collecting survey data from three different samples, they found a consistent pattern—when the relationship quality between leaders and members was low, there was an inverted U-shape relationship between prohibitive voice (i.e., pointing out problems with current practices and inhibiting wrongdoings to improve organizational functioning) and leader's positive evaluation. However, the frequency of promotive voice was not related to leader's positive evaluation, irrespective of levels of LMX.

The findings suggest that a moderate frequency of prohibitive voice can project a positive image to managers, even when the voicing employees are not members of the managers' ingroup.

Liu Wu
Zhenyu Liao, Washington University in St. Louis
Kai Chi Yam, National University of Singapore
Russell E. Johnson, Michigan State University
Liu Wu, The Hong Kong Polytechnic University
Zhaoli Song, National University of Singapore

Journal of Applied Psychology, 103(9), 1039-1056 (2018)


Many of us have had a bad workplace interaction with a boss – for example, being yelled at or sworn at in front of others, receiving no credit for work that required serious effort or extra hours, or being humiliated for a past mistake. But have you thought how your boss might have felt after mistreating you? Did you notice a change in his or her behavior? It is common to assume that the boss would simply pretend that nothing happened or would even quietly blame the employee for the outburst. However, in a set of studies published in the Journal of Applied Psychology, the authors found that this is not necessarily true – some leaders actually feel bad and try to make amends.

Drawing from the literature on moral cleansing and moral courage, the authors posit that supervisors who engage in abusive behavior may paradoxically engage in more positive leadership behaviors subsequently as a result of feeling guilty. In addition, leader moral courage strengthens these effects by 1) amplifying the intensity of experienced guilt after perpetrating abusive supervisor behaviors, and 2) increasing the likelihood to perform reparative actions after experiencing feelings of guilt. Their research contributes to the theoretical understanding of leaders' responses toward their own abusive supervisor behavior and provides insights into how and when destructive leadership behaviors may, paradoxically, trigger more constructive behaviors.

Li Shuping
Li Shuping, The Hong Kong Polytechnic University

Strategic Management Journal, 39(13), 3434-3457 (2018)


Corporate control in many economies, including emerging markets, has gradually transitioned from a family-dominated structure to one with substantial non-family ownership. How does the increase of non-family ownership influence the monitoring effectiveness in family-owned firms? To address this question, this study assesses the impact of non-family ownership on CEO turnover-performance sensitivity and its boundary conditions among 717 family-owned firms in Taiwan from 1997 to 2011. The findings show that CEO turnover-performance sensitivity increases with non-family ownership, especially in firms with weak governance conditions. The study highlights the key role of non-family owners for the best corporate governance design.

Xun Tong, University of Groningen, the Netherlands (Faculty PhD graduate)
Kee-hung Lai, The Hong Kong Polytechnic University

Qinghua Zhu, Shanghai Jiao Tong University
Senlin Zhao, Shanghai Maritime University
Jianghang Chen, Shanghai Jiao Tong University
T.C.E. Cheng, The Hong Kong Polytechnic University

Journal of Operations Management, forthcoming


When managing a global supply chain, one critical challenge encountered by multinational enterprises (MNEs) is the extension of corporate social responsibility (CSR) practices to suppliers in emerging countries. In this study, the authors use a multi-method approach to explore 1) the nature of suppliers’ CSR heterogeneity based on the various components of CSR in emerging countries, and 2) the choices of MNEs for extending CSR to different types of suppliers in dynamic environments. They begin with a survey of Chinese original equipment manufacturers (OEMs) servicing MNEs to examine how these suppliers vary in CSR implementation based on cluster analysis results. To understand the choices made by MNE buyers for extending CSR to their OEM suppliers, the authors conduct an agent-based simulation study considering the dynamics of a system with multiple agents (i.e., MNE buyers, OEM suppliers, and the government). The cluster analysis results show that CSR practices implemented by Chinese OEMs differ significantly from one another and can be classified into three clusters (i.e., Leader, Follower, and Laggard). The simulation results provide insights into how the adaption costs (e.g., upgrade cost and cost saved by downgrading) and punitive (inspection with possible penalties) and supportive (subsidies) tactics adopted by the government affect the choices made by MNE buyers for extending CSR practices to suppliers in emerging countries. Moreover, the authors demonstrate when supportive tactics are more effective than punitive tactics under varying conditions and extend the model to investigate the consequences of switching between these two types of tactics in a sequential simulation.

Yangyang Chen
Xin Chang, Nanyang Technological University
Yangyang Chen, The Hong Kong Polytechnic University
Sarah Qian Wang, University of Warwick
Kuo Zhang, Xiamen Universit
Wenrui Zhang, The Chinese University of Hong Kong

Journal of Financial Economics, forthcoming


The authors show that credit default swap (CDS) trading on a firm's debt positively influences its technological innovation output measured by patents and patent citations. This positive effect is more pronounced in firms relying more on debt financing or being more subject to continuous monitoring by lenders prior to CDS trade initiation. Moreover, after CDS trade initiation, firms pursue more risky and original innovations and generate patents with higher economic value. Further analysis suggests that CDSs improve borrowing firms’ innovation output by enhancing lenders' risk tolerance and borrowers' risk taking in the innovation process rather than by increasing R&D investment. Taken together, the authors' findings reveal the real effects of CDSs on companies' investments and technological progress.

Liangliang Jiang, The Hong Kong Polytechnic University
Ross Levine, University of California, Berkeley
Chen Lin, The University of Hong Kong

Journal of Financial and Quantitative Analysis, forthcoming


The authors use a new identification strategy to assess whether an intensification of competition among banks increases or decreases the provision of a key banking service: liquidity creation. Although theory offers conflicting predictions about the impact of competition on liquidity creation, they find that regulatory-induced competition reduces liquidity creation. Consistent with a subset of models stressing that banks pushed toward insolvency will reduce risk-taking activities, they discover that regulatory-induced competition reduces liquidity creation more among banks with less risk-absorbing capacity, e.g., less profitable banks.

Chong Wang
Kiridaran Kanagaretnam, York University
Gerald J. Lobo, University of Houston
Chong Wang, The Hong Kong Polytechnic University
Dennis J. Whalen, Otterbein University

Journal of Financial and Quantitative Analysis, forthcoming


The authors study how differences in societal trust across countries are related to bank risk-taking.  Prior research documents a positive relation between trust and both financial accounting transparency and timely recognition of bad news, which reduces bank managers' ability to take excessive risk. Additionally, managers in high-trust societies are more likely to exhibit higher pro-social behaviour and, therefore, less likely to take excessive risk for personal benefit. Consistent with these arguments, the authors document that banks located in countries with higher societal trust exhibit lower risk-taking, and these banks also experienced less financial trouble and fewer failures during the 2007-2009 financial crisis.

K.C. John Wei
Laura Xiaolei Liu, Peking University
Haibing Shu, Shanghai Jiao Tong University
K.C. John Wei, The Hong Kong Polytechnic University

Journal of Financial Economics, 125, 286-310 (2017)


Models of political risk predict that increases in political uncertainty cause stock prices to fall, especially for politically sensitive firms. The authors use the event of the Bo Xilai political scandal in 2012 in China as an exogenous shock to identify the impact of political uncertainty on asset prices. They document that the Bo scandal caused a significant drop in stock prices, especially for firms that are more politically sensitive. Further analysis shows that the stock price drop is mainly driven by a change in discount rate, providing strong support for the existence of priced political risk.

Yong Zhang
Ivy Zhang, University of Minnesota
Yong Zhang, The Hong Kong Polytechnic University

Contemporary Accounting Research, forthcoming


The authors exploit the setting of first-time enforcement of insider trading laws to investigate the relationship between insider trading opportunities and insiders' supply of information. Insider trading opportunities motivate insiders to reduce their supply of information by concealing firm performance, thereby increasing their information advantage over outsiders, resulting in higher insider trading profits. Using data from 40 countries over the 1988–2004 period, the authors find that reporting opacity, as captured by earnings smoothness, decreases significantly after the initial enforcement of insider trading laws in countries with strong legal institutions. The decrease in earnings smoothness is positively related to the strictness of insider trading laws. The decrease in earnings smoothness is also more pronounced for countries that have more persistent insider trading law enforcement and for countries that impose more severe penalties on insider trading cases. Further analyses show that the decrease in earnings smoothness following insider trading enforcement is concentrated among firms that are not closely held and among high growth firms. In addition to uncovering a channel through which insider trading restrictions affect the information environment, the authors’ evidence highlights the importance of country- and firm-level governance structures in determining the consequences of insider trading restrictions. The findings of this paper have important implications for insider trading regulations.

Yuwei Jiang
Zhongqiang (Tak) Huang, The University of Hong Kong
Xun (Irene) Huang, Nanyang Technological University
Yuwei Jiang, The Hong Kong Polytechnic University

Journal of Marketing Research, 55 (3), 432-445 (2018)


Death-related information often co-exists with marketing stimuli in the same media context, but there is very little research investigating how consumers' responses to marketing stimuli may be affected by death-related media information. In this research, the authors asked consumers to view death-related news and ads as stimuli, and tested whether such exposure to death-related media information would influence their sensitivity to the scope or magnitude of marketing information (e.g., price, discounts) in a subsequent, unrelated context. This research shows that after incidental exposure to death-related media information, consumers tend to momentarily focus more on intrinsic versus extrinsic personal values. Consequently, they pay less attention to, and become less sensitive to the scope of, the marketing stimuli (which are generally associated with extrinsic values). This research suggests that, in a media environment that is rich in death-related information, it may not be wise to broadcast or place ads to inform consumers of changes in marketing offers, because such consumers will be less likely to sense the difference. Of course, there may be situations in which marketers can benefit from decreased sensitivity to changes in marketing stimuli. For example, marketers may make consumers less sensitive to price differences to increase their likelihood of choosing a higher-priced product by advertising it in a media context containing death-related information.

Liu Wu
Ouyang, K., Shanghai University of Finance and Economics (Faculty PhD graduate)
Xu, E., Hong Kong Baptist University
Huang, X., Hong Kong Baptist University
Liu Wu, The Hong Kong Polytechnic University
Tang, Y., Hong Kong Baptist University

Journal of Applied Psychology, 103 (6), 614-630 (2018)


Group members gain social status via giving favors to others, but why and when they do so remain unclear in the literature. Building on social exchange theory and social status literature, the authors identify three types of favor giving among group members (generous, stingy, and matched) and propose that an affective mechanism (i.e., gratitude) and a cognitive mechanism (i.e., perceived competence) underlie the relationship between favor giving and status attainment. Specifically, generous/stingy favor giving has a linear relationship with status attainment through both gratitude and perceived competence, whereas matched favor giving has a curvilinear relationship with status attainment only through perceived competence. An experimental study and a field study lend support to the authors' propositions. Their study complements the literature by offering a complete picture of how three types of favor giving among group members shape their social status in different ways.

Yangyang Chen, The Hong Kong Polytechnic University

Rui Ge, The Hong Kong Polytechnic University
Henock Louis, Pennsylvania State University
Leon Zolotoy, The University of Melbourne

Review of Accounting Studies, forthcoming


Corporate tax avoidance has attracted significant interest from the academy, the media and the general public. Tax avoidance is a risky investment and agency conflicts between shareholders and managers can lead to underinvestment or overinvestment in tax avoidance. In this paper, the authors examine whether stock liquidity plays a governance role and thus mitigates extreme (i.e., either overly aggressive or overly conservative) tax avoidance. They find that firms with higher stock liquidity engage less in extreme tax avoidance. They further document that the effect of stock liquidity on tax avoidance is amplified for firms with high proportions of activist shareholders, and is attenuated for firms with high levels of stock price informativeness. Overall, their findings suggest that stock liquidity mitigates extreme tax avoidance by enhancing shareholders’ monitoring over firm management.

Liangliang Jiang, The Hong Kong Polytechnic University
Hui Zhou, The University of Melbourne

Review of Accounting Studies, 22, 469-501 (2017)


The authors investigate the role of audit verification in the resolution process following debt covenant violations. Using two sets of proxies for demand -- audit fees and the independence and diligence of audit committees -- they find evidence that covenant violations result in a demand for differentially higher levels of audit verification. Further analyses demonstrate the link between the increased demand for audit verification and the mechanisms designed to control agency costs in debt contracts. The authors document cross-sectional variations in the observed fee differential with respect to the level of reliance on financial covenants, the type of covenants violated, and waiver decisions. Moreover, they find that the observed audit fee increases are associated with more favourable movements in borrowing costs and the adoption of more conservative investment policies post violation. Their findings suggest that covenant violations increase the demand for audit services to help control contracting costs post violation.

Morton Pincus, University of California, Irvine
Feng Tian, The Hong Kong Polytechnic University
Patricia Wellmeyer, University of California, Irvine and Norwegian School of Economics
Sean Xin Xu, Tsinghua University

Contemporary Accounting Research, forthcoming


Enterprise systems (ESs) are widely used to support business processes along the enterprise value chain. It has been shown that ESs, by integrating business functions and making information about day-to-day activities available, enhance operational transparency and improve the internal information environment. However, while ES-based business infrastructures can offer many benefits, their prevalence and increased complexity have also brought new challenges to external auditors. Motivated by the prominence of this issue for auditors and regulators and by the scarcity of research jointly examining ESs and auditors’ work, the authors investigate whether the presence and extent of client firms’ ES implementations are related to the quality and efficiency of auditors’ work. Using proprietary archival data on ES implementations and controlling for self-selection, they find that ES implementation improves the quality and efficiency of current and future years’ audit work. Specifically, there are fewer restatements, a greater likelihood of auditors issuing going concern opinions to firms that do not survive, higher accruals-based auditing quality, a lower likelihood of Form 10-K filing delays, and generally lower audit fees. The authors further show that the benefits of ESs generally increase with the scope of implementation and are generally greater when the ES includes accounting and finance systems. Inconsistent with improvement in the quality of auditors’ work, they find no evidence that ESs help auditors identify material weaknesses in advance of restatement announcements and they find that even in the presence of ESs, auditors issue an excessive number of going concern opinions to clients that survive.

Adam C. Kolasinski, Texas A&M University
Nan Yang, The Hong Kong Polytechnic University

Journal of Financial Economics, forthcoming


Regulators and policy makers, including the U.S. government’s Financial Crisis Inquiry Commission, have frequently asserted that managerial short-termism was at the root of the subprime mortgage crisis of 2007-2009. Scholarly work investigating the matter, however, has largely failed to find evidence of this assertion. In contrast, the authors of this paper find that financial firms whose CEOs had shorter equity award vesting schedules, as measured pre-crisis, were more exposed to subprime residential mortgages during the crisis than were financial firms whose CEOs had longer vesting schedules. Further, shorter vesting schedules are associated with poorer stock returns and higher probability of insolvency during the crisis. Finally, they find that shorter vesting schedules are associated with larger fines and settlements in lawsuits and enforcement actions related to subprime mortgage fraud or misrepresentation. The authors conclude that CEO short-termism played a role in the crisis.

Xin Xu, The Hong Kong Polytechnic University
James Y.L. Thong, The Hong Kong University of Science and Technology
Kar Yan Tam, The Hong Kong University of Science and Technology

Journal of Management Information Systems, 34, 102–140 (2017)


The authors investigate how information and communication technology (ICT) service providers can win back disadopters of an earlier generation of technology when a new technology generation appears on the market. Integrating prior research on consumers’ defensive bias, knowledge accessibility, diffusion of innovation, and technology adoption, they developed a model to predict disadopters’ intention to readopt a technology. They postulate that the primary reason for disadoption moderates the impacts of both the drivers of readoption (perceived superiority, effort expectancy, price value of the new technology generation, and social influence) and the characteristics of prior usage experience with the disadopted earlier technology generation (duration of disadoption, tenure with the old generation, and usage intensity of the old generation) on readoption intention. The authors tested their technology readoption model in the context of mobile Internet services. Data were collected from 274 disadopters of an earlier generation of mobile Internet services before the advent of the third generation (3G) technology. The results supported most of their hypotheses. These findings have significant theoretical and practical implications, especially for firms interested in winning back technology disadopters. Finally, the authors present an agenda for further research into technology readoption.

Publications in UTD List of Journals
  • Qiang (John) Li, Jason D Shaw, Sam Garg. Undervaluation of directors in the board hierarchy: Impact on turnover of directors (and CEOs) in newly public firms. Strategic Management Journal 39.
  • Cynthia Lee, Helen H Zhao, Wing Lam, M Susan Taylor. Does Proactive Personality Matter in Leadership Transitions? Effects of Proactive Personality on New Leader Identification and Responses to New Leaders and their Change Agendas. Academy of Management Journal 61.
  • Yi Yang, Ye Lu, Miao Song. Approximation Approaches for Inventory Systems with General Production/Ordering Cost Structures. Production and Operations Management 27.
  • Nan Yang, Adam C Kolasinski. Managerial myopia and the mortgage meltdown. Journal of Financial Economics 128.
  • Xun (Irene) Huang, Zhongqiang (Tak) Huang, Yuwei Jiang. The Impact of Death-Related Media Information on Consumer Value Orientation and Scope Sensitivity. Journal of Marketing Research 55.
  • Joseph Kerstein, Chong Wang, Henry He Huang. The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies Vol. 49.
  • Zelong Yi, Ying-Ju Chen, Yun Liu, Yulan Wang. The Impact of Consumer Fairness Seeking on Distribution Channel Selection: Direct Selling vs. Agent Selling. Production and Operations Management Vol. 27.
  • Jill E Perry-Smith, Prithviraj Chattopadhyay, Jason D Shaw, Srikanth Paruchuri. New Ways of Seeing: Pitfalls and Opportunities in Multilevel Research. Academy of Management Journal Vol. 61.
  • Liu Yang, Pengfei GuoYulan Wang. Service Pricing with Loss-Averse Customers. Operations Research Vol. 66.
  • Di Fan, Yi Zhou, Christopher S Tang, Chris K Y Lo, Andy C.L. YeungEnvironmental Incidents and the Market Value of Firms: An Empirical Investigation in the Chinese Context. Manufacturing and Service Operations Management Vol. 20.
  • Wei-Yu Kuo, Jing Zhao, Tse-Chun Lin, Utpal Bhattacharya. Do Superstitious Traders Lose Money? Management Science Vol. 64.
  • Stein W Wallace, Tsan-Ming Choi, Yulan Wang. Big Data Analytics in Operations Management. Production and Operations Management Vol. 27.
  • Yong Jin, Shengli Li, Hsing Kenneth Cheng. Optimal Distribution Strategy for Enterprise Software: Retail, SaaS, or Dual Channel? Production and Operations Management Vol. 27.
  • Shuping Li. Increased non‐family ownership in family‐owned firms: How does it affect CEO turnover‐performance sensitivity? Strategic Management Journal Vol. 39.
  • Senlin Zhao, Kee-hung Lai, Xun Tong, T.C.E. Cheng, Jianghang Chen. Multinational enterprise buyers’ choices for extending corporate social responsibility practices to suppliers in emerging countries: A multi-method study. Journal of Operations Management Vol. 63.
  • Miao Song, Wenjun Ni, Jia Shu. Location and Emergency Inventory Pre-Positioning for Disaster Response Operations: Min-Max Robust Model and a Case Study of Yushu Earthquake. Production and Operations Management Vol. 27.
  • Zhou Xu, Chung Yee Lee. New Lower Bound and Exact Method for the Continuous Berth Allocation Problem. Operations Research Vol. 66.
  • Panos Kouvelis, Guang Xiao, Nan Yang. On the Properties of Yield Distributions in Random Yield Problems: Conditions, Class of Distributions and Relevant Applications. Production and Operations Management Vol. 27.
  • Li Jiang, Li Li. Horizontal Subcontracting From Competitors: When and What? Production and Operations Management Vol. 27.
  • Shining Wu, Jiheng Zhang, Rachel Q Zhang. Management of a Shared-Spectrum Network in Wireless Communications. Operations Research Vol. 66.
  • Zhou Xu, Xiangtong Qi, Lindong Liu. Simultaneous Penalization and Subsidization for Stabilizing Grand Cooperation. Operations Research Vol. 66.
  • Ling Cen, Ling Cen, KC. John Wei, Liyan Yang, Liyan Yang, Ling Cen. Disagreement, Underreaction, and Stock Returns.  Management Science Vol. 63.
  • T.C.E Cheng, Ciwei Dong, Chi To Ng. Electricity Time-of-Use Tariff with Stochastic Demand.  Production and Operations Management Vol. 26.
  • Zhenyu Liao, Wu Liu, Xian Li, Zhaoli Song. Why and When Leaders’ Affective States Influence Employee Upward Voice.  Academy of Management Journal Vol. 60.
  • Jeffrey Ng, Yiwei Dou, Brian Akins. Corruption in bank lending: The role of timely loan loss recognition.  Journal of Accounting and Economics Vol. 63.
  • Kevin X. Zhu, George J Jiang. Information Shocks and Short-Term Market Underreaction.  Journal of Financial Economics Vol. 124.
  • KC. John Wei, Haibing Shu, Laura Xiaolei Liu. The impacts of political uncertainty on asset prices: Evidence from the Bo scandal in China.  Journal of Financial Economics Vol. 125.
  • Huan Zheng, Miao Song, Yongzhen Li, Jiawei Zhang, Jia Shu. Multisourcing Supply Network Design: Two-Stage Chance-Constrained Model, Tractable Approximations, and Computational Results.  Journal on Computing Vol. 29.
  • Frank May, Rafay A. Siddiqui, Ashwani Monga. Time Window as a Self-Control Denominator: Shorter Windows Shift Preference toward Virtues and Longer Windows toward Vices.  Journal of Consumer Research Vol. 43.
  • Lei Su, C. Nathan DeWall, Yuwei Jiang, Zhansheng Chen. Social Exclusion and Consumer Switching Behavior: A Control Restoration Mechanism.  Journal of Consumer Research Vol. 44.
  • Marilyn A Uy, Remus Ilies, Katrina Jia Lin. Is it Better to Give or Receive? The Role of Help in Buffering the Depleting Effects of Surface Acting.  Academy of Management Journal Vol. 60.
  • Geoffrey Love, Michael K Bednar, Jaegoo Lim. The Face of the Firm: The Influence of CEOs on Corporate Reputation.  Academy of Management Journal Vol. 60.
  • Tracy Ann Sykes, Jason D Shaw, Mary Macharia, Viswanath Venkatesh, Samuel Fosso Wamba. Networks, Technology, and Entrepreneurship: A Field Quasi-experiment among Women in Rural India.  Academy of Management Journal Vol. 60.
  • Pengfei Guo, Qu Qian, Robin Lindsey, Qu Qian. Comparison of Subsidy Schemes for Reducing Waiting Times in Healthcare Systems.  Production and Operations Management Vol. 26.
  • Joanna Ho, Anne Wu, Sean Xin Xu, Feng Tian. Seeking Value Through Deviation? Economic Impacts of IT Overinvestment and Underinvestment. Information Systems Research Vol. 28.
  • Yuwei Jiang, Gerald Gorn, Amitava Chattopadhyay, Maria Galli.  Does Your Company Have the Right Logo? How and Why Circular- and Angular-Logo Shapes Influence Brand Attribute Judgments.  Journal of Consumer Research Vol. 42.
  • Walid Saffar, Omrane Guedhami, Chuck Kwok, Narjess Boubakri.  National Culture and Privatization: The Relationship between Collectivism and Residual State Ownership.  Journal of International Business Studies Vol. 47.
  • Xindong Zhu, Gaoguang Zhou, Simon Fung.  Monitor Objectivity with Important Clients: Evidence from Auditor Opinions around the World.  Journal of International Business Studies Vol. 47.
  • Xiande Zhao, Tsan-Ming Choi, T C E Cheng. Multi-Methodological Research in Operations Management.  Production and Operations Management Vol. 25.
  • Ting-Yan Chan, Christina Wong, Kee-hung Lai, Venus Lun, Chi Ng, Eric Ngai.  Green Service: Construct Development and Measurement Validation.  Production and Operations Management Vol. 25.
  • Yanzhi Wang, Ji-Chai Lin.  The R&D Premium and Takeover Risk.  The Accounting Review Vol. 91.
  • Ye Lu, Miao Song, Yi Yang.  Joint Inventory and Pricing Coordination with Incomplete Demand Information.  Production and Operations Management Vol. 25.
  • Donghui Wu, Yuyan Guan, Zhifeng Yang, Lixin Su.  Do School Ties between Auditors and Client Executives Influence Audit Outcomes?  Journal of Accounting and Economics Vol. 61.
  • Na Ni, Yuwei Jiang, Donal Crilly. Do-No-Harm versus Do-Good Social Responsibility: Attributional Thinking and the Liability of Foreignness.  Strategic Management Journal Vol. 37.
  • Li Jiang, Zhongyuan Hao.  Incentive-Driven Information Dissemination in Two-Tier Supply Chains.  Manufacturing and Service Operations Management Vol. 18.
  • Viswanath Venkatesh, Hillol Bala, V. Sambamurthy.  Implementation of an Information and Communication Technology in a Developing Country: A Multimethod Longitudinal Study in a Bank in India.  Information Systems Research Vol. 27.
  • Lindong Liu, Zhou Xu, Xiangtong Qi, Lindong Liu.  Computing Near-Optimal Stable Cost Allocations for Cooperative Games by Lagrangian Relaxation.  Journal on Computing Vol. 28.
  • Robert Wyer Jr., Zhongqiang Huang, Xun (Irene) Huang.  Slowing Down in the Good Old Days: The Effect of Nostalgia on Consumer Patience.  Journal of Consumer Research Vol. 43.
  • Dima Jamali, Walid Saffar, Bryan Husted.  Near and dear? The role of location in CSR engagement.  Strategic Management Journal Vol. 37.
  • Alon Lisak, Cynthia Lee, Miriam Erez, Yang Sui.  The positive role of global leaders in enhancing multicultural team innovation.  Journal of International Business Studies Vol. 47.
  • Jing-sheng Song, Pengfei GuoChung-lun Li, Qingying Li.  Equilibrium Joining Strategies and Optimal Control of a Make-to-Stock Queue.  Production and Operations Management Vol. 25.
  • Pengfei Guo, Zhaotong Lian, Xin Li.  Quality-Speed Competition in Customer-Intensive Services with Boundedly Rational Customers.  Production and Operations Management Vol. 25.
  • Sungwook Min, Xubing ZhangNamwoon Kim, Rajendra Srivastava.  Customer Acquisition and Retention Spending: An Analytical Model and Empirical Investigation in Wireless Telecommunications Markets.  Journal of Marketing Research Vol. 53.
  • Andy YeungT C Edwin Cheng, Hugo Lam.  The impact of firms' social media initatives on operational efficiency and innovativeness.  Journal of Operations Management Vol. 47-48.
  • Kai Pan, Yongpei Guan.  Strong Formulations for Multistage Stochastic Self-Scheduling Unit Commitment.  Operations ResearchVol. 64.
  • Xiaomeng Guo, Baojun Jiang.  Signaling Through Price and Quality to Consumers with Fairness Concerns.  Journal of Marketing Research Vol. 53.
  • Byoung Kang, Ji-Woong Chung.  Prime Broker-Level Comovement in Hedge Fund Returns: Information or Contagion?  The Review of Financial Studies Vol. 29.