Some of my published and working papers can be downloaded from:
Selected Publications
30. Index-Tracking Rigidity and Arbitrage
Opportunities in MSCI Index Reconstitutions
with Jiang Luo, Jiaxin
Peng, Shuoge Qian, Choon Wee Tan. Pacific-Basin Finance Journal, Forthcoming, SSRN PDF.
MSCI index rebalancing creates a predictable profit window—savvy
traders can earn big by front-running index-trackers before changes take
effect.
29. Does Corporate Social Responsibility Facilitate
Public Debt Financing?
with Bin Xu and Yung Chiang Yang, The
Financial Review, 2025, SSRN PDF, DOI
Firms with better CSR performance rely more on public debt rather
than bank debt.
28. Corporate
Taxes and Corporate Social Responsibility
with Yaling Jin, Endong Yang, and Wenrui Zhang, Journal of Corporate Finance,
2025, Volume 94, SSRN
PDF, The
FinReg Blog at Duke Law, DOI (Open Access).
Tax cuts boost CSR performance by freeing up internal funds, while
tax hikes have little impact, underscoring the heavy reliance of CSR
investments on internal funds and the stickiness of CSR commitments.
27.
Local Political Corruption and Financial Reporting Conservatism
with Shanmin
Li, Chun Liu, Liang Sun, and Wenrui Zhang, The Accounting Review,
2025, Volume 100 (2),pp. 45-70, SSRN PDF, DOI.
Firms in corrupt areas choose more
conservative accounting to safeguard their resources from corrupt officials'
expropriation.
26.
CEO Locality and Corporate Social Responsibility
with Dianna Chang and Weichen
Yan, British Journal of Management, 2025, Volume 36 (2),
pp. 571-596, SSRN PDF, DOI.
CEOs working near
their hometowns boost CSR because they are familiar with and have strong
connections to their local areas, aligning with CSR's focus on local
involvement.
25. Discontinuous Distribution of Test
Statistics Around Significance Thresholds in Empirical Accounting Studies
with Huasheng Gao and Wei Li, Journal of Accounting
Research, 2025, Volume 63 (1), pp. 165-206, SSRN PDF, DOI.
Healthy skepticism
is warranted towards narrowly significant test statistics in accounting
research, due to potential undisclosed discretion in obtaining and reporting
results.
24. Institutional Investor Horizons,
Information Environment, and Firm Financing Decisions
with Yangyang Chen, Kangkang Fu, and
Endong Yang, Journal of Contemporary Accounting & Economics,
2024, Volume 20 (1), pp. 1-24, SSRN PDF, DOI.
Institutional investors’
horizons influence firms’ financing decisions by shaping their information
environment.
23.
Demand Uncertainty, Inventory, and Cost Structure
with
Wing Chun Kwok and George Wong, Contemporary Accounting
Research, 2024, Volume 41, Issue 1, pp. 226-254, SSRN PDF, DOI.
Rigid cost structures and high
inventory serve as substitutes in alleviating congestion concerns when firms
face uncertain demand.
22.
Stock Price Crash Risk and Firms’ Operating Leverage
with Louis T.W. Cheng,
Wing Chun Kwok, and George Wong, Journal of Financial
Stability, 2024, Volume 71, pp. 1-17, SSRN PDF, DOI.
Firms facing
greater stock price crash risk adopt a more flexible cost structure to delay
stock price crashes and mitigate adverse outcomes.
21. Bank
Lines of Credit as a Source of Long-term Finance
with Yunling Chen and
Ronald W Masulis, Journal of Financial and Quantitative
Analysis, 2023, Volume 58 , Issue 4 , pp.
1701 – 1733, SSRN PDF (the accepted
version with Internet Appendix); PDF (A longer version
in 2021), DOI.
Long-term credit-line
drawdowns act as a valuable bridge financing mechanism.
20. Sustainable Finance: ESG/CSR, Firm Value, and
Investment Returns
With Kangkang Fu,
Yaling Jin, and Pei Fun Liem, Asia-Pacific Journal of Financial Studies,
2022, Volume 51, Issue 3, pp. 325-371,SSRN PDF, DOI.
For firms, there are several specific channels through which ESG/CSR
activities create value. However, ESG investors should expect to Do Badly in
the long run if they want to Do Good.
19. The
Determinants of COVID-19 Morbidity and Mortality across Countries
with Dianna Chang, Yu
He, and Kelvin Tan, Scientific Reports (the open-access journal of Nature), 2022, 12, 5888, SSRN PDF, DOI (Open Access).
We identify 21 predetermined country-level factors that explain marked
variations in weekly COVID-19 morbidity and mortality across 91 countries
between January and the end of 2020.
18. Credit
Default Swaps and Corporate Innovation
with Yangyang Chen, Sarah Qian
Wang, Kuo Zhang, and Wenrui Zhang, Journal
of Financial Economics, 2019, Vol 134, pp.474-500. SSRN PDF, DOI.
CDS, a recent financial innovation, promotes
corporate technological innovation.
17. Macroeconomic Conditions, Financial Constraints,
and Firms’ Financing Decisions
with
Yunling Chen and Sudipto Dasgupta, Journal
of Banking and Finance, 2019, Vol 101 pp. 242-255.
SSRN PDF, DOI.
Time-varying macroeconomic conditions shape
firms’ financing decisions.
16. Stock Liquidity and Stock Price Crash Risk
with Yangyang Chen and Leon
Zolotoy, Journal of
Financial and Quantitative Analysis, 2017, Vol.52, No. 4,
1605-1637. SSRN PDF, DOI.
More liquid stocks are more likely to crash!
15.
Advisor’s Industry Expertise, Information Leakage to Industry Rivals, and the
Choice of M&A Advisor
with
Chander Shekhar, Lewis H.K. Tam, and Jiaquan Yao,
2016, Journal of Business Finance and Accounting, Vol. 43, Issue
1&2, pp. 191-225, SSRN PDF, DOI.
Advisors with greater
industry expertise win more deals, earn higher advisory fees, and increase the
likelihood of deal completion.
14. The Information Role of Advisors
in Mergers and Acquisitions: Evidence from Acquirers Hiring Targets’
Ex-advisors
with
Chander Shekhar, Lewis H.K. Tam, and Jiaquan
Yao, 2016, Journal of Banking and Finance, Vol 70, pp.
247-264, SSRN PDF, DOI.
Employing targets’ ex-advisors enables acquirers
to pay lower takeover premiums and secure a larger proportion of merger
synergies.
13. Managerial
Entrenchment and Firm Value: A Dynamic Perspective
with
Hong Feng Zhang, Journal
of Financial and Quantitative Analysis, 2015, Vol. 50, Issue 5,
1083-1103. SSRN PDF, DOI.
Managerial entrenchment hurts firm value, and the effect is causal.
12. Non-executive Employee Stock Options and
Corporate Innovation
with
Kangkang Fu, Angie Low, and Wenrui Zhang, Journal of Financial Economics, 2015, Vol.
115, Issue 1, 168-188. SSRN PDF, DOI.
Innovation is about people.
11.Cash Flow Sensitivities and the Allocation of
Internal Cash Flow
with
Sudipto Dasgupta, George Wong, and Jiaquan Yao, Review of Financial Studies,
2014, Vol.27, Issue 12, 3628-3657. SSRN PDF, DOI.
Using an integrated regression framework, we depict a complete picture
as to how firms allocate their cash flow across various uses.
10. Monte Carlo Simulations and Capital Structure
Research
with
Sudipto Dasgupta, International
Review of Finance, 2011, Vol. 11 (Special Issue on Capital Structure I), Issue
1, pp. 19-55. SSRN PDF, DOI.
We evaluate statistical inferences in empirical capital structure
research using Monte Carlo simulations.
9. Conglomerate Structure and Capital Market Timing
with
Gilles Hilary, Carmen Shih, and Lewis Tam, Financial Management, 2010, pp. 1307-1338 (Lead
Article). SSRN PDF, DOI.
Conglomerates time capital markets more than standalone firms.
8. The Cross-Sectional Determinants of Post-IPO Stock
Performance: Evidence from China
with Lewis Tam, Shi Hua Lin,
and George Wong, Accounting and Finance, 2010,
Vol. 50, Issue 3, pp. 581-603. SSRN
PDF, DOI.
We reveal the cross-sectional determinants of post-IPO
long-term stock returns in China.
7. Financial Constraints and Stock Returns - Evidence
from Australia
with
Howard Chan, Robert Faff, and George Wong, Pacific Basin Finance Journal, 2010, Vol. 18,
Issue 3, pp. 306-318. SSRN PDF, DOI.
We construct an index that measures firms' external financial
constraints in an Australian setting.
6. The Effect of Auditor Choice on Financing
Decisions
with Sudipto Dasgupta and Gilles Hilary, The Accounting Review, 2009,
Vol. 84, No. 4, 1085-1117, SSRN PDF, DOI.
Auditor quality
affects the financing decisions of companies.
5. Target Behavior
and Financing: How Conclusive is the Evidence?
with Sudipto Dasgupta, Journal of Finance, 2009,
Vol 64, No 4, 1767-1796. DOI.
· Version 1(April 2006): This version
contains additional simulation analysis of the impact of initial leverage on
capital structure, the persistence of the leverage ratio, and the importance of
fixed effects, as suggested by Lemmon, Roberts, and Zender (2007).
· Version 2 (January 2007): This
version contains addition simulation analysis demonstrating that (i) market-timing behavior is
consistent with some empirical regularities in the data (ii) tests of market
timing behavior do have the power to distinguish
between random financing and timing behavior (iii)
Probit/Logit models of debt-equity choice are highly sensitive to small
quirks in the data and multinomial Logit regressions that model issuance and
repurchase decisions simultaneously need to be interpreted with caution.
· Version 3 (October 2007): This
version suggests some simulation-based tests that can distinguish between the
various channels through which firm-specific variables affect debt ratios.
· Version 4 (April
2008): This version appears at Journal
of Finance.
A number of existing tests of target behavior
have no power to reject alternatives.
4. Audit Quality, Auditor Compensation and IPO Underpricing
with
André Gygax, Elaine Oon, and Hongfeng Zhang, Accounting and Finance,
2008, Vol.48, 391-416. SSRN PDF, DOI.
Quality auditors serve as a signalling device that enhances post-issue
market value of equity.
3. The Effects of Financial Constraints on Corporate
Policies in Australia
with
Tek Jun Tan, George Wong, and Hongfeng Zhang, Accounting and Finance,
2007, Volume 47, 85-108. SSRN PDF, DOI.
Peter
Brownell Award for best publication in Accounting and Finance 2007
We are among the first to jointly study the
impact of financial constraints on companies’ investment decisions and demand
for liquidity.
2. The Real Impact of Stock Market Mispricing -
Evidence from Australia
with Lewis Tam, Tek Jun Tan, and George Wong, Pacific
Basin Finance Journal, 2007, Vol.15,
388-408. SSRN PDF, DOI.
Mispricing in Australian capital markets has a significant influence on
the real economy, and the influence works though an equity-financing channel.
1. Analyst Coverage and Financing Decisions
with Sudipto
Dasgupta and Gilles Hilary, Journal
of Finance, 2006, Vol.
61, Issue 6, 3009-3048. SSRN PDF, DOI.
How many analysts covering a company shapes its financing
decisions!
Selected
Working Papers
1. Internal Control Weaknesses and Corporate Environmental
Performance: Evidence from Toxic Chemical Pollutants
with Kangkang Fu, Yiwei Li, and Xiu-Ye Zhang, PDF
2. How Do Misvalued Firms Deploy Internal Cash Flow?
with Wing Chun Kwok, George Wong, and Jiaquan
Yao, PDF
3. Stock Liquidity and Corporate Social
Responsibility
with Weiqiang Tan, Endong Yang, and Wenrui Zhang, PDF
4. Corporate Environmental Risk and the
Customer-Supplier Relationship
with Shantanu Banerjee, Kangkang Fu, Tao Li, and George Wong, PDF
5. Corporate Environmental Liabilities
and Capital Structure
with Kangkang Fu, Tao Li, Lewis Tam, and George Wong, PDF
6. Employee Inside Debt and Acquirer
Returns
with Jun-koo Kang, Le Zhang, and Wenrui Zhang. PDF
7. Equity Financing, Equity Lending, and
Price Pressure: The Case of DRIP Arbitrage
with Tze Chuan 'Chewie' Ang, Xiaoxiong Hu, and Patrick
Verwijmeren. PDF
8. Do Patents Portend Productivity
Growth? Global Evidence from Private and Public Firms
with David R. McLean, Bohui Zhang, and Wenrui Zhang. PDF
9. Innovation, Managerial Myopia, and
Financial Reporting
with
Gilles Hilary, Jun-koo Kang, and Wenrui Zhang. PDF
Older title: Does Conditional Accounting Conservatism
Impede Corporate Innovation?