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Research Highlights



Selected Journal Articles

The Accounting Review, forthcoming

The Securities and Exchange Commission (SEC) regulates and monitors, under the securities laws, the financial reporting and disclosure of SEC registrants (companies) to increase transparency and protect investors. The securities laws also consider the companies’ interests and allow them to make confidential treatment requests to redact certain information in SEC filings and not publicly disclose such information for a specified period of time, if the information is both proprietary and immaterial to investors - proprietary in the sense that disclosure may reveal trade secrets or information about profitability that harm companies’ competitiveness. There has been an overall uptick in confidential treatment requests in recent years.

Although prior studies provide evidence that companies use redactions to protect proprietary information from their competitors, anecdotal evidence suggests otherwise. For example, Tesla, in the two fiscal quarters ending June 30 and September 30, 2017, in which the company lost $955 million, made an unusually high number of confidential treatment requests, allowing the company to generate almost 3,000 redactions. In another example, TheStreet questioned SolarCity’s redactions in 2015, speculating that the withheld information was unfavourable to investors. In yet another example, questioned the Universal Display Corporation’s heavy redaction in its supply and licensing agreements with Samsung, which potentially allows the company to withhold unfavourable information regarding its red emitter sales.


Dichu Bao, Deakin University
Yongtae Kim, Santa Clara University
Lixin (Nancy) Su, The Hong Kong Polytechnic University

This paper looks into the incentives of firms in redacting information from material contracts. The authors propose firms also redact information to conceal bad news. To capture bad news possessed by managers, they use residual short interest as a proxy measure.  Residual short interest can capture managers’ private negative information because a significant overlap exists in managers’ and short sellers’ information sets, as documented by prior studies. Following Bao, Kim, Mian, and Su (2019), they estimate a residual measure of the short-interest level that is purged of factors that are not reflective of bad news.

To ensure that residual short interest captures managers’ private negative information, the authors link it to future returns and managerial actions that reflect their private information. They show that residual short interest predicts negative future abnormal returns, suggesting that it indeed captures negative information that is yet to be reflected in stock prices. They also show that residual short interest is negatively associated with net insider buying and stock repurchases and positively associated with material financial misstatements that are subsequently restated downwards. These results validate residual short interest as a proxy for managers’ private negative information, which is reflected in their actions.

Turning to their main analysis, the authors find that residual short interest is positively associated with the frequency of confidential treatment requests filed in the following quarter. Considering that redactions are also motivated by concerns of disclosure revealing proprietary information to competitors, they control for product market and technological competition. They also find that the positive association is more pronounced for firms with lower litigation risk, higher CEO equity incentives, and lower external monitoring by institutional investors, consistent with managers’ personal interests and agency conflicts increasing their tendency to withhold negative information through confidential treatment requests.

The authors also find that firms making more confidential treatment requests have greater stock price crash risk in the following year, and the greater crash risk is driven primarily by confidential treatment requests made when residual short interest is high. They also find that confidential treatment requests filed when residual short interest is high are negatively associated with future accounting and stock performance, suggesting that redacted information is bad news. By contrast, confidential treatment requests made when residual short interest is low are positively associated with future accounting and stock performance, indicating that such redactions are made to protect proprietary information. Taken together, their results suggest that not all confidential treatment requests are made to protect proprietary information, and managers redact information from material contracts to conceal bad news.

The results in this study provide important policy implications given that the FAST Act Modernization and Simplification of Regulation S-K, which became effective April 2, 2019, now permits firms to redact information from material contracts without seeking the SEC’s in-advance approval. This streamlined process may provide more opportunities for firms to conceal bad news.

Journal of Applied Psychology, forthcoming

Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) integrative theory based on meta-analysis and model testing has served as the foundation for the authors' understanding of training motivation. However, the applicability of the theory today may be limited for several reasons. There has been significant growth in training motivation research since Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) proposed and tested their theory. Also, advances in meta-analysis and model testing allow for a more complete and rigorous test of the theory than was previously possible. As a result, the authors propose and test a contemporary and comprehensive theory of training motivation based on Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678) and other studies conducted over the last 20 years. To do so, they conducted an updated meta-analytic review of 167 independent studies and tested a mediation model of training motivation theory using both conventional meta-analytic structural equation modeling (MASEM) and full-information MASEM (FIMASEM). The results support a partially mediated model of training motivation that includes additional antecedents (e.g., openness to experience, extroversion, agreeableness, and goal orientation) and learning outcomes (e.g., turnover intentions and job satisfaction) not included in Colquitt et al. (Journal of Applied Psychology, 2000, 85, p. 678). In addition, the authors conducted exploratory analyses to understand the relative importance of the antecedents of both motivation to learn and learning outcomes and the moderating role of training and studying characteristics on the relationships between motivation to learn and its antecedents and consequences. Finally, they discuss the implications of the results for theory, practice, and future research directions.


Seunghoo Chung, The Hong Kong Polytechnic University
Yuhan Zhan, The Ohio State University
Raymond A. Noe, The Ohio State University
Kaifeng Jiang, The Ohio State University

Journal of Applied Psychology, forthcoming

Conventional research on gratitude has focused on the benefits of expressing or experiencing gratitude for the individual. However, recent theory and research have highlighted that there may too be benefits associated with receiving others’ gratitude. Grounded in the Work-Home Resources model, the authors develop a conceptual model to understand whether, how, and for whom service providers (i.e., healthcare professionals) benefit from receiving service beneficiaries’ (i.e., patients) gratitude in their daily work. They hypothesize that perceived gratitude from service beneficiaries enhances service providers’ relational energy at work, which spills over to benefit their family lives later in the day. In addition, they hypothesize that the effect of gratitude on relational energy and its subsequent spillover effect to the family are contingent on employees’ occupational identity. Two experience sampling studies with data collected from healthcare professionals and their spouses for two consecutive weeks (each) provided support for the hypothesized model. The authors conclude by discussing the theoretical and practical implications of their work.

Pok Man Tang, Texas A&M University
Remus Ilies, Bocconi University and National University of Singapore
Sherry S. Y. Aw, James Cook University Singapore
Katrina Jia Lin, The Hong Kong Polytechnic Universit
Randy Lee, Lingnan University
Chiara Trombini, INSEAD, Singapore

Journal of Financial Economics, 141(1), 372-393 (2021)

Using a comprehensive US hedge fund activism dataset from 2003 to 2018, the authors find that activist hedge funds are about 52% more likely to target firms with female CEOs compared to firms with male CEOs. They find that firm fundamentals, the existence of a “glass cliff,” gender discrimination bias, and hedge fund activists’ inherent characteristics do not explain the observed gender effect. They also find that the transformational leadership style of female CEOs is a plausible explanation for this gender effect: instead of being self-defensive, female CEOs are more likely to communicate and cooperate with hedge fund activists to achieve intervention goals. Finally, the authors find that female-led targets experience greater increases in market and operational performance subsequent to hedge fund targeting.

Bill B. Francis, Rensselaer Polytechnic Institute
Iftekhar Hasan, Fordham University, Bank of Finland, University of Sydney
Yinjie (Victor) Shen, Cleveland State University
Qiang Wu, The Hong Kong Polytechnic University

Management Science, forthcoming

The authors study how daily labour supply responds to unanticipated earnings shocks among Singapore's taxi drivers using a novel identification strategy that makes use of idiosyncratic variation in booking cancellations and passenger no-shows (CNS) that drivers repeatedly receive. The results provide new and more compelling evidence in support of the income-targeting model of labour supply. Not only the average responses on the extensive margin, but also the responses on the intensive margin as well as the heterogeneous response at different income levels and across driver characteristics are all consistent with the income-targeting model. Drivers work longer and earn more per hour following CNS. The CNS effects exhibit a U-shaped pattern, are strongest when cumulative income is close to the average shift income, and become insignificant when the income level is too low or too high. The effects are most pronounced in the first hour of CNS and fade away quickly afterward. Drivers achieve higher productivity by reducing break time, taking more jobs, driving faster, driving to places with more earning opportunities, and having more time with passengers on board. They choose the response strategies that are complementary to their ability and circumstance such as schedule flexibility and potential for productivity improvement: Those with flexible working schedules tend to prolong their shifts further, while those with flexibility in earnings rate tend to increase their subsequent productivity more. The authors’ novel identification strategy strengthens the empirical literature on daily labour supply, while their findings of the heterogeneity effects offer new insights on income-targeting behaviours.


Duong Hai Long, National University of Singapore
Junhong Chu, National University of Singapore
Dai Yao, The Hong Kong Polytechnic University

Journal of Financial Economics ,forthcoming

This paper tests a theory conjecturing that cross-listing can insulate firms from potential hostile takeovers owing to the increased cost concern of bidders. The authors find a significant and positive relation between the corporate control threat and the likelihood that firms cross-list in a foreign country. Firms facing takeover threats are more likely to choose hosting countries with greater accounting differences from the U.S. GAAP. Subsample evidence suggests that cross-listing is more likely to be used as an antitakeover device if firms have foreign market exposure or when all-cash offers are less likely. Tests based on quasi-natural experiments provide further support.

Albert Tsang, The Hong Kong Polytechnic University
Nan Yang, The Hong Kong Polytechnic University
Lingyi Zheng, The Hong Kong Polytechnic University

Journal of Accounting and Economics, 70(1), 101334 (2020)

One of the fundamental questions in financial economics is how information affects the capital market. Social media, with user-generated content, speed and wide reach, has the potential to facilitate the aggregation of information and help stock price formation (crowd wisdom effect). It also provides fertile ground for disinformation to spread and hinder price discovery (rumor mill effect).

The authors of this paper investigate whether social media can play a negative information role by hindering price discovery in the presence of highly speculative rumors with a focus on merger rumors. They examine Twitter activity and price evolution around merger rumors, using a sample of 304 rumors about mergers and acquisitions that appeared in the media from 2009 to 2014.

The investigation finds evidence of the rumor mill effect in the presence of highly speculative rumors. Specifically, user Twitter activity around merger rumors distorts, rather than facilitates, price discovery.


Weishi Jia, Cleveland State University
Giulia Redigolo, University Ramon Llull
Susan Shu, Boston College
Jingran Zhao, The Hong Kong Polytechnic University

This paper first documents that rumor-window user tweet volume is insignificantly related to rumor realization, i.e., whether a merger rumor materializes within a year. Although most of the rumors do not materialize, investors behave as if tweet volume conveys valid information about deal likelihood, and highly tweeted rumors elicit greater immediate market reaction.

When the authors specifically focus on the price evolution around unrealized merger rumors, they find similar price distortions driven by tweet volume, as evidenced by immediate overreaction and prolonged price discovery. The price distortion associated with tweet volume persists weeks after a rumor and reverses only after eight weeks.

In addition, this research finds that author influence, investor base, and rumor specificity affect the relationship between social media and price discovery. It studies whether tweets posted by users with higher social media influence generate greater stock market impact, whether the investor base of a rumored target plays a role in the market reaction, and whether the effect of rumors that appear more specific is more obvious. The results show that price distortion is more pronounced for rumors tweeted by Twitter users with greater social influence, for target firms with low institutional ownership, and for rumors that supply more details.

This study sheds light on the downside of social media as an information channel by examining whether social media activity impedes price discovery in the face of potentially false rumors. The results suggest that social media can be a rumor mill that hinders the market's price discovery of potentially false information.

The evidence that social media is a double-edged sword (spreading crowd wisdom and being a rumor mill) should be of interest to academics, practitioners, and regulators. In an age when false information can dominate the headlines and people are increasingly turning to social media as an information channel, this paper also contributes to the broader debate regarding the roles and responsibilities of media and social media outlets.

Operations Research, forthcoming

Customer reward programs are widely used as a means to foster customer loyalty, increase acquisition and retention, and boost long-term profitability. Although these programs are becoming more complex, most of them have one thing in common - consumers purchasing and accumulating a specified number of points (redemption threshold), often within a given time period (expiration term) can redeem the points for rewards. Together these requirements are referred to as “redemption hurdles” in this paper.

The authors study the role of redemption hurdles in shaping consumer behavior and reward program profitability with a focus on the popular "Buy X, Get One Free" (BXGO) programs, which set a redemption threshold (X), and possibly an expiration term for the reward (free products/services). In their modeling framework, forward-looking consumers repeatedly interact with the seller (a monopolistic firm offering a nondurable product) over a long time horizon, and strategically make purchase and redemption decisions.


Yan Liu, The Hong Kong Polytechnic University
Yacheng Sun, Tsinghua University
Dan Zhang, University of Colorado Boulder

This research makes substantial contribution to the literature. It builds a novel consumer model based on consumer purchase and redemption behavior. It demonstrates that redemption hurdles give rise to interesting dynamics in consumers' purchase and redemption decisions over time, and that a reward program can be profit-enhancing even for a single consumer type. It also shows the underlying mechanisms through which redemption hurdles can increase a firm's profitability.

This study has important findings. First, a consumer's purchase probability increase as her reward point inventory approaches the redemption threshold. These patterns are consistent with the "point pressure" phenomenon documented in the empirical literature. To the best of the authors’ knowledge, they are the first to analytically show why and how point pressure arises due to redemption hurdles. Second, a redemption threshold alone cannot improve the firm's profit, unless it is coupled with a finite expiration term, or a positive transaction utility that consumers may derive from reward redemption. The authors examine how a firm can leverage redemption thresholds and/or expiration terms to strike a balance between customer acquisition and retention, and eventually increase firm profitability.

These results of this study have clear and rich managerial implications for effectively designing reward programs. First, it is important for rewards to be relevant and valuable for consumers, and reward programs with low transaction utility should set a finite expiration term in order to be profitable. Second, every firm should try to facilitate consumers' reward redemption and boost their transaction utility, for instance, by converting punch cards to digital ones. Finally, the optimal design of redemption hurdles requires a careful analysis and a balance between the redemption threshold, expiration term, and price.

Contemporary Accounting Research, forthcoming

Understanding the association between quasi-indexer ownership and insider trading is important given the externalities that insider trading can impose on shareholders, the importance of quasi-indexers in the capital markets, and their mixed monitoring incentives. The prior literature has produced a mixed set of results regarding this association. These results are difficult to interpret because the association between them is likely endogenous and prior studies have not employed effective identification strategies to address this issue. In this study, the authors examine the effects of quasi-indexer institutional ownership on insider trading using the plausibly exogenous discontinuity in quasi-indexer ownership around the Russell 1000/2000 index cutoff. Using both regression discontinuity and instrumental variable research designs, they find higher quasi-indexer ownership leads to less insider trading (both buys and sells) and less profitable sell trades. The effects for sells are concentrated among insider trades that, ex ante, are more likely to be based on private information. Their evidence on the profitability of buys is mixed. In addition, they find firms with higher quasi-indexer ownership are more likely to have and/or more strictly enforce blackout policies. Overall, the results suggest that quasi-indexers can reduce the agency costs associated with insider trading through their direct and indirect monitoring activities.

Stephen A. Hillegeist, Arizona State University
Liwei Weng, The Hong Kong Polytechnic University

Management Science, forthcoming

The authors study the impacts of social interactions on competing firms’ quality differentiation, pricing decisions, and profit performance. Two forms of social interactions are identified and analyzed: (1) market-expansion effect (MEE) - the total market expands as a result of both firms’ sales - and (2) value-enhancement effect (VEE) - a consumer gains additional utility of purchasing from one firm based on this firm’s previous and/or current sales volume. The authors consider a two-stage duopoly competition framework, in which both firms select quality levels in the first stage simultaneously and engage in a two-period price competition in the second stage. In the main model, they assume that each firm sets a single price and commits to it across two selling periods. They find that both forms of social interactions tend to lower prices and intensify price competition for given quality levels. However, MEE weakens the product-quality differentiation and is benign to both high-quality and low-quality firms. It also benefits consumers and improves social welfare. By contrast, VEE enlarges the quality differentiation and only benefits high-quality firms, but is particularly malignant to low-quality firms. It further reduces the consumers’ monetary surplus. Such impact is consistent, regardless of whether the VEE interactions involve previous or current consumers. The authors further discuss several model extensions, including dynamic pricing, combined social effects, and various cost structures, and verify that the aforementioned impacts of MEE and VEE are qualitatively robust to those extensions. Their results provide important managerial insights for firms in competitive markets and suggest that they need to not only be aware of the consumers’ social interactions, but also, more importantly, distinguish the predominant form of the interactions so as to apply proper marketing strategies.

Xin Geng, University of Miami
Xiaomeng Guo, The Hong Kong Polytechnic University
Guang Xiao, The Hong Kong Polytechnic University 

Journal of Applied Psychology, 106(2), 250-267 (2021)

Drawing upon social comparison theory, the authors developed and tested a model to examine potential negative coworker reactions toward proactive employees. They theorized that a focal employee’s proactive personality is positively related with his or her high relative standing in the group, which in turn exposes him or her to being the target of coworker envy. This may then reduce the focal employee’s received help from coworkers and give rise to coworker undermining. The authors further reasoned that employee prosocial motivation moderates the serial mediated relationships. Their hypotheses were generally supported in 3 field studies involving a total of 1,069 employees from 223 groups. Proactive personality was negatively and indirectly related to received help from coworkers, via relative leader-member exchange (RLMX) and relative job performance, and then via being envied by coworkers (Study 1). Results also generally supported the positive and indirect effect of proactive personality on coworker undermining via the same set of sequential mediators (e.g., RLMX and then being envied, Study 2). The indirect effects of proactive personality on coworker helping and undermining (e.g., via relative job performance and coworker envy) were only significant when employees’ prosocial motivation was low (Study 3). This research contributes to a more complete and balanced theorization of the influences of proactive personality in organizations.

Jiaqing Sun, University of Illinois at Chicago
Wen-Dong Li, The Chinese University of Hong Kong
Yuhui Li, Renmin University of China
Robert C. Liden, University of Illinois at Chicago
Shuping Li, The Hong Kong Polytechnic University
Xin Zhang, The Chinese University of Hong Kong

INFORMS Journal on Computing, 33(1), 86–104 (2021)

Most existing facility location models assume that the facility cost is either a fixed setup cost or made up of a fixed setup and a problem-specific concave or submodular cost term. This structural property plays a critical role in developing fast branch-and-price, Lagrangian relaxation, constant ratio approximation, and conic integer programming reformulation approaches for these NP-hard problems. Many practical considerations and complicating factors, however, can make the facility cost no longer concave or submodular. By removing this restrictive assumption, the authors study a new location model that considers general nonlinear costs to operate facilities in the facility location framework. The general model does not even admit any approximation algorithms unless P = NP because it takes the unsplittable hard-capacitated metric facility location problem as a special case. They first reformulate this general model as a set-partitioning model and then propose a branch-and-price approach. Although the corresponding pricing problem is NP-hard, they effectively analyse its structural properties and design an algorithm to solve it efficiently. The numerical results obtained from two implementation examples of the general model demonstrate the effectiveness of the solution approach, reveal the managerial implications, and validate the importance to study the general framework.

Wenjun Ni, Southeast University
Jia Shu, Southeast University
Miao Song, The Hong Kong Polytechnic University
Dachuan Xu, Beijing University of Technology
Kaike Zhang, Southeast University

Journal of Financial and Quantitative Analysis, forthcoming

The authors examine the value impact of independent directors nominated by activists (Activist IDs). Firms appointing Activist IDs experience larger value increases than firms appointing other directors, particularly when Activist IDs have private firm experience and when their nominators remain as shareholders. This value increase persists over a long period and is greater than that of activism events without director appointments. The increase is also higher among firms with greater monitoring needs and entrenched boards. Moreover, the appointments of Activist IDs are greeted more positively by the market, and Activist IDs obtain more favourable shareholder votes and additional future directorships.

Jun-Koo Kang, Nanyang Technological University
Hyemin Kim, Monash University
Jungmin Kim, The Hong Kong Polytechnic University
Angie Low, Nanyang Technological University

Journal of Financial Economics, forthcoming

This paper studies the disciplinary spillover effects of proxy contests on companies that share directors with target firms, that is, interlocked firms. In difference-in-differences tests, the author finds that interlocked firms reduce excess cash holdings, increase shareholder payouts, cut CEO compensation, and engage in less earnings management in the year after proxy contests. The effects are more pronounced when both the interlocked and target firms have a unitary board and when the interlocking director is up for election, is younger, or has shorter tenure. Overall, the evidence highlights the importance of directors’ career concerns in policy spillovers across firms with board interlocks.


Shuran Zhang, The Hong Kong Polytechnic University

The Accounting Review, 95 (5): 149–184 (2020)

The authors investigate the relationship between societal trust and managers' decisions to voluntarily issue earnings forecasts. They reason that managers are more likely to issue earnings forecasts in high-trust countries than in low-trust countries because investors view these voluntary disclosures as more credible information about the firm's future profitability. They find evidence consistent with these predictions, suggesting that societal trust fosters corporate voluntary disclosure. The authors also document that societal trust works as a substitute for country-level formal institutions in terms of its implications for management earnings forecast (MEF) issuance. Additionally, they find a stronger relationship between firm-level commitment to credible disclosure and MEFs in low-trust countries, suggesting that country-level societal trust relates to the effectiveness of firm-level credibility-enhancing mechanisms. Finally, they show that firms from countries with higher societal trust issue more precise and accurate MEFs that contain more information about multiple items.


Yuyan Guan, City University of Hong Kong
Gerald J. Lobo, University of Houston
Albert Tsang, The Hong Kong Polytechnic University
Xiangang Xin, City University of Hong Kong

Contemporary Accounting Research, 37(2), 1107–1139 (2020)

Political uncertainty has attracted considerable attention in both research and public policy circles in recent years. For corporates, it may generate demand uncertainty, a major determinant of cost behaviour, and affect corporate activities. Uncertainty over a possible shift in national leadership may disturb firms’ regular operations and shapes economic outcomes. Such uncertainty reaches its peak during election periods when competing parties formulate their regulatory and economic policies and outline their platforms for stimulating growth.

This study analyses the impact of election-driven political uncertainty on firms’ cost stickiness (varied cost responses to activity changes). By analysing a large panel of elections in 55 countries, the authors show that political uncertainty surrounding elections can affect cost stickiness. They find that the variation in cost behaviours is more obvious during election years and the importance of political uncertainty to cost stickiness is greater in countries with sound political and legal institutions. Their results imply that managers retain slack resources when political uncertainty is high but will be resolved soon.

Woo Jong Lee, Seoul National University
Jeffrey Pittman, Memorial University
Walid Saffar, The Hong Kong Polytechnic University

National elections provide an opportune context for the analysis since they may have major impact on industry regulation as well as tax, trade, and monetary policies and thus the environment in which firms operate. They are well dispersed across countries and over time and the timing is outside firms’ control.

While empirical research primarily examines the impact of political uncertainty on firms’ investment and financing activities, this study estimates political uncertainty’s real effects on corporate decisions. Using a sample of firms from 55 countries, the authors analyse changes in cost stickiness behaviour as political uncertainty shifts surrounding elections by comparing firm activities in the national election year with that in non-election years. Then they examine whether the relation between electoral uncertainty and cost stickiness depends on the soundness of countries’ political institutions, based on their prediction that managers in countries with weak political institutions experience less uncertainty associated with government replacement or policy shifts during elections. They also evaluate whether cross-sectional variation in country-level formal legal and informal institutions moderates the link between cost stickiness and political uncertainty by examining whether the relation between elections and cost stickiness is sensitive to rigidity in employee protection laws.

This study contributes to emerging evidence on cost behaviour by documenting that the extent of cost stickiness varies systematically across countries and over time. It reports initial evidence on the political view of cost stickiness and closes the gap of research on the importance of political uncertainty to the operating choices of firms by exploring the links between political cycles and corporate operational decisions. It sheds light on how to improve forecasts by looking at the relationship between varied cost behaviour and earnings properties. The finding that cost stickiness rises during elections may matter to managers and investors given the reality that a certain degree of political uncertainty is unavoidable such that firms are responsible for dealing with this external risk factor.

Journal of Applied Psychology, forthcoming

Literature on personality development mainly adopts two theoretical perspectives. From the classic trait perspective, environmental factors cannot change adult personality traits because personality traits are endogenous. From the transactional perspective, the environment can influence adult personality development, although rarely dramatically. Organizational research mostly assumes that personality traits cause work behaviours and attitudes, not vice versa.

This study looks at personality development from the new angle of work roles (role-based perspective) and examines what, how, and why personality traits develop after one’s adoption of leadership roles. It investigates whether and how transitioning from an employee into a supervisory role (leadership emergence) shapes one’s personality development. The authors propose that during such role transitions, individuals experience increases in job role demands and expectations, fostering growth in conscientiousness and emotional stability. Their findings show that becoming a leader causes subsequent small but substantial increases in conscientiousness over time to cope with new job role demands. The relationship between becoming a leader and change of emotional stability is not significant. Findings of this research provide important implications for both organizations and employees in better planning leadership succession and managing career development.

Wen-Dong Li, The Chinese University of Hong Kong
Shuping Li, The Hong Kong Polytechnic University
Jie (Jasmine) Feng, Rutgers University
Mo Wang, University of Florida
Hong Zhang, The Chinese University of Hong Kong
Michael Frese, University of Lueneburg
Chia-Huei Wu, University of Leeds

The authors conduct two longitudinal studies with data from National Survey of Midlife in the United States (MIDUS) and the Household, Income and Labor Dynamics in Australia (HILDA) Survey. They compare the personality development of two groups of participants - a treatment group (becoming leaders group) and a control group (always-employees group). They examine i) the relationship between becoming a leader and subsequent changes in personality traits with a time lag of ten years, and ii) the mediating role of change in job role demands with a time lag of four years.

Results from both studies reveal that after becoming leaders, individuals enhanced their levels of conscientiousness, meaning that they became more dependable, organized, and efficient. Changes of behaviour patterns to fulfil the job responsibilities and obligations of the new roles essentially give rise to changes in conscientiousness. Their findings challenge and complement the dominant view by providing an alternative explanation that becoming leaders may also shape personality traits.

The authors do not observe significant findings on changes in emotional stability. They suggest that future research examines the reasons for specific patterns of change in emotional stability during this period and looks into individual differences in the pattern of change in personality.

This research makes three contributions. First, it sheds light on what and how personality traits change over time after one assumes a supervisory role, and provides insight into which theory is more accurate in accounting for personality change or the lack thereof. Second, it unravels why personality traits develop after one transits from an employee into supervisory role, and paves the way for future research to examine personality change as an important outcome of organizational experience. Third, it offers an alternative perspective on the causal explanation of the relationship between personality and leadership emergence.

Contemporary Accounting Research, forthcoming

Using a large U.S. sample, the authors find a significant and positive relation between patents and corporate tax planning, and the effect is incremental to the effect of R&D on tax planning. They employ a quasi-natural experiment based on staggered industry-level innovation shocks to identify the positive causal effect of patents on corporate tax planning. They also find that patents are not associated with tax planning for domestic firms, but their association with tax planning is concentrated in multinational firms, which have the ability to shift domestic income to low-tax countries. Moreover, the authors find that the identified effect mainly exists in the post-check-the-box (CTB) rule period when shifting income among affiliates becomes more flexible and convenient. Finally, they use two income shifting models and find that patents, rather than R&D, facilitate tax planning through an income shifting channel. Overall, their results suggest that R&D and patents facilitate firms’ tax planning in distinct ways: R&D facilitates tax planning as intended through tax credits and deductions, whereas patents are used to avoid taxes aggressively by taxpayers through income shifting.

C.S. Agnes Cheng, The Hong Kong Polytechnic University
Peng Guo, Rutgers-The State University of New Jersey
Chia-Hsiang Weng, National Chengchi University
Qiang Wu, Rensselaer Polytechnic Institute

Management Science, forthcoming

Firms often register trademarks as they launch new products or services. The authors find that the number of new trademark registrations positively predicts firm profitability, stock returns, and underreaction by analysts in their earnings forecasts. Using the Federal Trademark Dilution Act (FTDA) as an exogenous shock to trademark protection, they find that greater trademark protection strengthens the predictability of new trademark registrations. Together, their evidence suggests that investors undervalue new trademark registrations.

Po-Hsuan Hsu, National Tsing Hua University
Dongmei Li, University of South Carolina
Qin Li, The Hong Kong Polytechnic University
Siew Hong Teoh, University of California, Irvine
Kevin Tseng, National Taiwan University

Journal of Financial and Quantitative Analysis, forthcoming

How does social capital affect trust? Evidence from a Chinese peer-to-peer lending platform shows regional social capital affects the trustee’s trustworthiness and the trustor’s trust propensity. Ceteris paribus, borrowers from higher social capital regions receive larger bid from individual lenders, have higher funding success, larger loan size, and lower default rates, especially for low-quality borrowers. Lenders from higher social capital regions take higher risks and have higher default rates, especially for inexperienced lenders. Cross-region transactions are most (least) likely to be realized between parties from high (low) social capital regions.

Iftekhar Hasan, Fordham University
Qing He, Renmin University of China
Haitian Lu, The Hong Kong Polytechnic University

The Accounting Review, 95(3), 343–370 (2020)

This study examines how cross-firm differences in financial reporting practices affect how peer-firm accounting information is used to evaluate CEO performance. The author proposes that efficient relative evaluation using accounting performance requires peer firms to have comparable financial reporting systems, allowing boards to reduce the information processing costs associated with differences in firms’ financial reporting practices. Supporting this view, when peer selection takes financial reporting comparability into account, he finds evidence that the earnings of peer firms with high financial reporting comparability serve as a performance benchmark for determining CEOs’ cash compensation. His paper empirically corroborates the substantial anecdotal evidence of the use of peer firms’ accounting performance as a significant element in boards’ evaluation of CEO performance.

Jonathan Nam, The Hong Kong Polytechnic University

Management Science, forthcoming

This study examines the effects of jurisdictions’ corporate taxes and other policies on firms’ headquarters (HQ) location decisions. Using changes in state corporate income tax rates across time and states as the setting, the authors find that a one-percentage-point increase in the HQ state corporate income tax rate increases the likelihood of firms relocating their HQ out of the state by 16.8%, and an equivalent decrease in the HQ state rate decreases the likelihood of HQ relocations by 9.1%. Exploiting the unique tax policy features within the state apportionment system lends strong support to the interpretation that taxation drives this effect. Their analyses also demonstrate that state income tax features affect the destination of the HQ move. They contribute to the literature on corporate decision-making by showing how state income taxation affects a real corporate decision that has significant economic consequences for the company and the state.

Travis Chow, The University of Hong Kong
Sterling Huang, Singapore Management University
Kenneth J. Klassen, University of Waterloo
Jeffrey Ng, The Hong Kong Polytechnic University

INFORMS Journal on Computing, forthcoming

A solar power plant is a large-scale photovoltaic (PV) system designed to supply usable solar power to the electricity grid. Building a solar power plant needs consideration of arrangements of several important components, such as PV arrays, solar inverters, combiner boxes, cables, and other electrical accessories. The design of solar power plants is very complex because of various optimization parameters and design regulations. In this study, the authors address the cable-routing problem arising in the planning of large-scale solar power plants, which aims to determine the partition of the PV arrays, the location of combiner boxes, and cable routing such that the installation cost of the cables connecting the components is minimized. They formulate the problem as a mathematical programming problem, which can be viewed as a generalized capacitated minimum spanning tree (CMST) problem, and then devise a branch-and-price-and-cut (BPC) algorithm to solve it. The BPC algorithm uses two important valid inequalities, namely the capacity inequalities and the subset-row inequalities, to tighten the lower bounds. The authors also adopt several acceleration strategies to speed up the algorithm. Using real-world data sets, they show by numerical experiments that their BPC algorithm is superior to the typical manual-based planning approach used by many electric power planning companies. In addition, when solving the CMST problem with unitary demands, their algorithm is highly competitive compared with the best exact algorithm in the literature.

Zhixing Luo, Nanjing University
Hu Qin, Huazhong University of Science and Technology
T.C.E. Cheng, The Hong Kong Polytechnic University
Qinghua Wu, Huazhong University of Science and Technology
Andrew Lim, National University of Singapore

Strategic Management Journal, 41(10), 1933-1951 (2020)

This study draws attention to the impact of prior board experiences on the variation in new insider CEOs' degree of “insiderness” in terms of commitment to the status quo and their propensity to make strategic change. The authors theorize and find that new insider CEOs' prior board experience at the focal firm has a negative effect on strategic change, whereas their prior board experience at other firms has a positive effect. Moreover, the positive effect of prior board experience at other firms is stronger (weaker) for new insider CEOs who have less (more) prior board experience at the focal firm. Their study contributes to upper echelons theory and research on new CEOs, and has important implications for organizational practices regarding CEO succession and strategic change.

Qi Zhu, The Hong Kong Polytechnic University
Songcui Hu, The University of Arizona
Wei Shen, Arizona State University



Publications in UTD List of Journals

  • Jeffrey Ng, Sterling Huang, Tharindra Ranasinghe, Mingyue Zhang. Do Innovative Firms Communicate More? Evidence from the Relation between Patenting and Management Guidance. The Accounting Review 96.

  • Shinichi Kamiya, Rene M Stulz, Jun-Koo Kang, Andreas Milidonis, Jungmin Kim, Rene M Stulz. Risk management, firm reputation, and the impact of successful cyberattacks on target firms. Journal of Financial Economics 139.

  • Jia Shu, Miao Song, Kaike Zhang, Wenjun Ni, Dachuan Xu. A Branch-and-Price Algorithm for Facility Location with General Facility Cost Functions. Journal on Computing 33.

  • Kai Pan, Jianqiu Huang, Yongpei Guan. Multistage Stochastic Power Generation Scheduling Co-Optimizing Energy and Ancillary Services. Journal on Computing 33.

  • Arun Rai, Sean Xin Xu, Zhuo June Cheng, Feng Tian. Social Learning in Information Technology Investment: The Role of Board Interlocks. Management Science 67.

  • Jing-Sheng Song, Baozhuang Niu, Yulan Wang, Pengfei Guo. Direct Sourcing or Agent Sourcing? Contract Negotiation in Procurement Outsourcing. Manufacturing and Service Operations Management 23.

  • Eli Bartov, Hong Wu, C S Agnes Cheng. Overbidding in Mergers and Acquisitions: An Accounting Perspective. The Accounting Review 96.

  • Zhou Xu, Chung-Yee Lee, Shengnan Shu. Optimal Global Liner Service Procurement by Utilizing Liner Service Schedules. Production and Operations Management 30.

  • Mark Shuai Ma, Qin Li, Terry Shevlin. The effect of tax avoidance crackdown on corporate innovation. Journal of Accounting and Economics 71.

  • Shuran Zhang. Directors’ career concerns: Evidence from proxy contests and board interlocks. Journal of Financial Economics 140.

  • Yuwei Jiang, Alokparna Basu Monga, Lei Su. How Life-Role Transitions Shape Consumer Responses to Brand Extensions. Journal of Marketing Research 58.

  • Henry He Huang, Chong Wang. Do Banks Price Firms' Data Breaches? The Accounting Review 96.

  • T C E Cheng, Hu Qin, Andrew Lim, Qinghua Wu, Zhixing Luo. A Branch-and-Price-and-Cut Algorithm for the Cable-Routing Problem in Solar Power Plants. Journal on Computing 33.

  • Echo Wen Wan, Vincent Chi Wong, Feifei Huang. The Influence of Product Anthropomorphism on Comparative Judgment. Journal of Consumer Research 46.

  • Jungmin Kim, Jun-Koo Kang. Do Family Firms Invest More than Nonfamily Firms in Employee-Friendly Policies? Management Science 66.

  • Caleb H Tse, Sara Kim, Fine F Leung. Highlighting Effort Versus Talent in Service Employee Performance: Customer Attributions and Responses. Journal of Marketing 84.

  • Ning Zhang, Kangtao Ye, C S Agnes Cheng, Weihang Sun. The Effect of Auditing on Promoting Exports: Evidence from Private Firms in Emerging Markets. Management Science 66.

  • Yulan Wang, Fang Liu, Pengfei Guo. Pre‐positioning and Deployment of Reserved Inventories in a Supply Network: Structural Properties. Production and Operations Management 29.

  • Jonathan Nam. Financial Reporting Comparability and Accounting-Based Relative Performance Evaluation in the Design of CEO Cash Compensation Contracts. The Accounting Review 95.

  • Li Guo, Li Guo, K C John Wei, Weikai Li. Security analysts and capital market anomalies. Journal of Financial Economics 137.

  • Li Jiang, Dongling Cai. The Bright and Dark Sides of Customer Switching. Production and Operations Management 29.

  • Juzhi Zhang, Tsan-Ming Choi, Suresh P Sethi. Supply Chains Involving a Mean‐Variance‐Skewness‐Kurtosis Newsvendor: Analysis and Coordination. Production and Operations Management 29.

  • Andy C.L. Yeung, Daphne Yiu, T C E Cheng, Hugo K S Lam. Enhancing the Financial Returns of R&D Investments through Operations Management. Production and Operations Management 29.

  • Jishnu Hazra, T C Edwin Cheng, Tarun Jain. Illegal Content Monitoring on Social Platforms. Production and Operations Management 29.

  • Xu Guan, Yulan Wang, Zelong Yi, Ying-Ju Chen. Inducing Consumer Online Reviews Via Disclosure. Production and Operations Management 29.

  • Tieying Yu, Wei Guo, Metin Sengul, Wei Guo. Rivals’ Negative Earnings Surprises, Language Signals, and Firms’ Competitive Actions. Academy of Management Journal 63.

  • Xiangting Kong, Kiridaran Kanagaretnam, Albert Tsang. Home and foreign host country IFRS adoption and cross-delisting. Journal of International Business Studies 51.

  • Jingran Zhao, Susan Shu, Giulia Redigolo, Weishi Jia. Can social media distort price discovery? Evidence from merger rumors. Journal of Accounting and Economics 70.

  • Qi Zhu, Songcui Hu, Wei Shen. Why do some insider CEOs make more strategic changes than others? The impact of prior board experience on new CEO insiderness. Strategic Management Journal 41.

  • Ran Duchin, Shuran Zhang, Amy Dittmar. The timing and consequences of seasoned equity offerings: A regression discontinuity approach. Journal of Financial Economics 138.

  • Les Graham, Erica Xu, Wu Liu, Jane Xu, Xu Huang, Rongwen Jia, Ed Snape. The “Evil Pleasure”: Abusive Supervision and Third-Party Observers’ Malicious Reactions Toward Victims. Organization Science 31.

  • Gerald J Lobo, Xiangang Xin, Albert Tsang, Yuyan Guan. Societal Trust and Management Earnings Forecasts. The Accounting Review 95.

  • Ivy Xiying Zhang, Yong Zhang. Discussion of “The effect of fair value accounting on the performance evaluation role of earnings”. Journal of Accounting and Economics 70.

  • Feng Li, Zhou Xu, Zhi-Long Chen. Production and Transportation Integration for Commit-to-Delivery Mode with General Shipping Costs. Journal on Computing 32.

  • Dorothy C K Chau, Jennifer E Gerow, Eric W T Ngai, Jason Bennett Thatcher. The Effect of Business–IT Strategic Alignment and IT Governance on Firm Performance: A Moderated Polynomial Regression Analysis. MIS Quarterly 44.

  • David D Yao, Heng-Qing Ye, Jiankui Yang. Technical Note—On the Optimality of Reflection Control. Operations Research 68.

  • Suresh P Sethi, Guo Li, Tsan-Ming Choi, Lin Li. Journal of Operations Management 66.

  • Jane Wenzhen Lu, Shuping Li. A Dual-Agency Model of Firm CSR in Response to Institutional Pressure: Evidence from Chinese Publicly Listed Firms. Academy of Management Journal 63.

  • Chung-Lun Li, Nicholas G Hall. Work Package Sizing and Project Performance. Operations Research 67.

  • Jing Xie, Allaudeen Hameed. Preference for dividends and return comovement. Journal of Financial Economics 132.

  • Xueni Shirley Li, Linying (Sofie) Fan, Yuwei Jiang. Room for Opportunity: Resource Scarcity Increases Attractiveness of Range Marketing Offers. Journal of Consumer Research 46.

  • Yitian SKY Liang, Charles B Weinberg, Gerald J Gorn, Zhongqiang (Tak) Huang. The Sleepy Consumer and Variety Seeking. Journal of Marketing Research 56.

  • Pengfei Guo, Christopher S Tang, Yulan Wang, Ming Zhao, Ming Zhao. The Impact of Reimbursement Policy on Social Welfare, Revisit Rate, and Waiting Time in a Public Healthcare System: Fee-for-Service Versus Bundled Payment. Manufacturing and Service Operations Management 21.

  • Peng Hu, Miao Song, Ye Lu. Joint Pricing and Inventory Control with Fixed and Convex/Concave Variable Production Costs. Production and Operations Management 28.

  • Lixin Nancy Su, Dichu Bao, Yongtae Kim, Yongtae Kim, G Mujtaba Mian. Do Managers Disclose or Withhold Bad News? Evidence from Short Interest. The Accounting Review 94.

  • Jennifer M Knippen, Wei Shen, Qi Zhu, Qi Zhu. Limited progress? The effect of external pressure for board gender diversity on the increase of female directors. Strategic Management Journal 40.

  • Wenrui Zhang, Kuo Zhang, Yangyang Chen, Sarah Qian Wang, Xin Chang. Credit default swaps and corporate innovation. Journal of Financial Economics 132.

  • Yulan Wang, Fengfeng Huang, Pengfei Guo. Cyclic Pricing When Customers Queue with Rating Information. Production and Operations Management 28.

  • Gang Li, Chu Zhang. Counterparty credit risk and derivatives pricing. Journal of Financial Economics 134.

  • Echo Wen Wan, Lei Su, Yuwei Jiang. Filling an Empty Self: The Impact of Social Exclusion on Consumer Preference for Visual Density. Journal of Consumer Research 46.

  • Xiaomeng Guo, Lingxiu Dong, Danko Turcic. Selling a Product Line Through a Retailer When Demand Is Stochastic: Analysis of Price-Only Contracts. Manufacturing and Service Operations Management 21.

  • 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 27.

  • Sam Garg, Qiang (John) Li, Jason D Shaw. Undervaluation of directors in the board hierarchy: Impact on turnover of directors (and CEOs) in newly public firms. Strategic Management Journal 39.

  • Wing Lam, M Susan Taylor, Cynthia Lee, Helen H Zhao. 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.

  • Ye Lu, Miao Song, Yi Yang. 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.

  • Yuwei Jiang, Xun (Irene) Huang, Zhongqiang (Tak) Huang. The Impact of Death-Related Media Information on Consumer Value Orientation and Scope Sensitivity. Journal of Marketing Research 55.

  • Chong Wang, Henry He Huang, Joseph Kerstein. The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies 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 27.

  • Jason D Shaw, Srikanth Paruchuri, Jill E Perry-Smith, Prithviraj Chattopadhyay. New Ways of Seeing: Pitfalls and Opportunities in Multilevel Research. Academy of Management Journal 61.

  • Liu Yang, Pengfei Guo, Yulan Wang. Service Pricing with Loss-Averse Customers. Operations Research 66.

  • Zhou Xu, Chung Yee Lee. New Lower Bound and Exact Method for the Continuous Berth Allocation Problem. Operations Research 66.

  • Andy C.L. Yeung, Chris K Y Lo, Christopher S Tang, Yi Zhou, Di Fan. Environmental Incidents and the Market Value of Firms: An Empirical Investigation in the Chinese Context. Manufacturing and Service Operations Management 20.

  • Guang Xiao, Panos Kouvelis, Nan Yang. On the Properties of Yield Distributions in Random Yield Problems: Conditions, Class of Distributions and Relevant Applications. Production and Operations Management 27.

  • Li Li, Li Jiang. Horizontal Subcontracting From Competitors: When and What? Production and Operations Management 27.

  • Wei-Yu Kuo, Jing Zhao, Tse-Chun Lin, Utpal Bhattacharya. Do Superstitious Traders Lose Money? Management Science 64.

  • Shining Wu, Jiheng Zhang, Rachel Q Zhang. Management of a Shared-Spectrum Network in Wireless Communications. Operations Research 66.

  • Lindong Liu, Zhou Xu, Xiangtong Qi. Simultaneous Penalization and Subsidization for Stabilizing Grand Cooperation. Operations Research 66.

  • Stein W Wallace, Tsan-Ming Choi, Yulan Wang. Big Data Analytics in Operations Management. Production and Operations Management 27.

  • Hsing Kenneth Cheng, Yong Jin, Shengli Li. Optimal Distribution Strategy for Enterprise Software: Retail, SaaS, or Dual Channel? Production and Operations Management 27.

  • Shuping Li. Increased non‐family ownership in family‐owned firms: How does it affect CEO turnover‐performance sensitivity? Strategic Management Journal 39.

  • Jianghang Chen, Qinghua Zhu, Senlin Zhao, Kee-hung Lai, Xun Tong, T.C.E Cheng. Multinational enterprise buyers’ choices for extending corporate social responsibility practices to suppliers in emerging countries: A multi-method study. Journal of Operations Management 63.

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