We examine the desirability of accounting uniformity in a setting where investors allocate investment across firms with heterogeneous productivity. We show that without regulation, firms’ voluntary choices of accounting methods may not lead to suboptimal resource allocation and social value. We then

The new accounting standard requires that financial institutions provision for lifetime expected losses on their loan portfolios. We develop a model for estimating long-term expected loan losses that incorporates a wide range of bank- and aggregate level predictors of future losses. The model combin

This paper examines whether and how foreign joint venture brokerages in China are impacted by two entry barriers: (1) ownership restriction barrier that discourages foreign partners from sharing superior technical capabilities with domestic partners, and (2)institutional barrier that prevents the jo

This paper investigates how firms’ labor skill heterogeneity affects dividend payout policy. Building on the literature’s finding that it is more costly to hire, retain, and layoff skilled labor, we hypothesize that firms relying more on skilled labor are more cautious in setting their dividend poli

We investigate how a social planner designs prudential regulations under the CECL model. We set up a model to incorporate two central roles of banks in the economy: credit supply to the real sector (that is, bank loans, the bank asset) and liquidity provision to households (that is, bank deposits, t

This paper examines the equity loan supply for short-selling. Using detailed stock lending data, we show that active equity funds, on average, are informed stock lenders. The stocks they lend outperform those that they do not. The stocks they recall and sell perform worse in the future than those

We examine factors that affect the timeliness of misstatement discovery at the individual audit partner level using data from Taiwan that disclose both audit firm names and audit partner names. Employing the duration of a misstatement as an inverse proxy for the timeliness of misstatement discove

This paper provides, for the first time, large-scale evidence that liquidity transformation by banks creates fragility, as their uninsured depositors face an incentive to withdraw their money before others (a so-called panic run). Such fragility manifests itself in stronger sensitivity of deposit

This paper examines how credit risk spillovers affect corporate financial flexibility. We construct separate empirical proxies to disentangle the two channels of credit risk spillovers— credit risk contagion (CRC), which increases industry peers’ distress likelihood; and product market rivalry (PMR)

Investors are increasingly tapping into social media for financial advice (Beals 2012; Huang 2015; Langton 2015), giving rise to the emergence of Social Media Analysts (SMAs), who analyze stocks and provide financial advice on social media. However, due to low barrier of entry, social media is reple

Reputation has long been recognized as an important mechanism to mitigate opportunistic behavior in the audit market. However, whether and how reputation motivates auditors to provide high-quality audits is empirically not clear. We exploit the Chinese audit market, where a group of auditors is titl

“计划、执行、勤奋、认真、坚持”，五个词是一名合格卖方分析师所需要具备的。制定合理的计划，并努力完成它；勤于思考，勤于学习；认真做好每一件事情；持之以恒，就一定能有好结果。 作为一名卖方行业分析师，财务知识和行业知识是必备的；但要成为一名合格分析师，这两项还远不够，还需要对宏观经济有所了解，有助于从宏观面了解行业，此外高情商、高抗压能力等都很重要。 结合十多年的行业研究经验，通过案例展示、流程分析等介绍卖方分析师的日常工作，同时对合格卖方分析师的素质要求给出自己的理解与认识。