Selected Journal Articles
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
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
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.
Kiridaran Kanagaretnam, York University
Gerald J. Lobo, University of Houston
Chong Wang, The Hong Kong Polytechnic University
Dennis J. Whalen, Otterbein University
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.
Laura Xiaolei Liu, Peking University
Haibing Shu, Shanghai Jiao Tong University
K.C. John Wei, The Hong Kong Polytechnic University
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.
Ivy Zhang, University of Minnesota
Yong Zhang, The Hong Kong Polytechnic University
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.
Zhongqiang (Tak) Huang, The University of Hong Kong
Xun (Irene) Huang, Nanyang Technological University
Yuwei Jiang, The Hong Kong Polytechnic University
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.
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
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
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
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
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
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
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 Guo,Yulan Wang. Service Pricing with Loss-Averse Customers. 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.
- 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 Guo, Chung-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 Zhang, Namwoon 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 Yeung, T 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.