Research

Publications:

“Do Traffic Light Labels Influence Food Purchase Intentions? The Moderating Effect of Health Risk Perception” (with Jingbo Zhang), Journal of Food Products Marketing, (2023), pp.1-13. (Link)

“Do Franchise Ownerships Affect Franchise Systems Market Coverage?”, (with Jingbo Zhang and Robert Stassen), Reconceptualizing Marketing In Today's Global Environment, (2022), Charlotte, NC. (Link)

“Will Traffic Light Influence Purchase Intention on Food? The Moderating Effect of Health Risk Perception” (with Jingbo Zhang), Ethical Decisions In Lifestyle Choices, (2017), Louisville, KY. (Link)

“Effect of Semantic Relation on Novel Noun-Noun Compounds Learning by Second Language Learners of Chinese” (with J. Xu and X. Jiang), Chinese Teaching in the World, 3 (2017), pp.008 (Link)

“Information Asymmetry of Online Shopping Based on Signaling Game Model” (with J. Zhang, X. Chen, and T. Lv), Journal of Beijing University of Posts and Telecommunications (Social Sciences Edition), 15 (2013), pp. 54-59 (Link)

Working Paper:

"Adoption of abatement technology in an uncertain world: An experiment", Revise & Resubmit, Journal of Economic Behavior & Organization (Link)

Abstract: This paper develops a model of how agents allocate resources among "production" (self-interest), "saving" (cooperation), and "abatement technology" (complement to production) with an endogenously determined uncertain damage in a flexible voluntary contribution environment. This work is the first to integrate public goods with common-pool resources while considering agents' risk preferences. Contrary to the "common belief" that greater risk-averse agents invest more in abatement technology to protect the common pool, their investment is lower than less risk-averse agents' when the damage probability is high. The Bayesian Value of a Statistical Life (B-VSL) displays a positive correlation with saving yet a negative one with both production and abatement technology. The results of a laboratory experiment show a negative effect of uncertain damage on abatement technology adoption, which is consistent with the model's prediction. Both the predictions and experimental data suggest an inverted-U relationship between the investment in abatement technology and risk aversion. The results also suggest uncertain damage from nature promotes group efficiency when the damage probability is low, but it is counterproductive when the probability is high. While uncertainty can bring a short-term increase in cooperation, it fails to curb the tendency towards overuse in the long run.

"Air Quality and Economic Growth in China: Evidence from Beijing and Shanghai" (with Jingping Gu and Jingbo Zhang), Reject & Resubmit, China Economic Review (Link)

Abstract:  China’s economy has experienced a high GDP growth rate over the past four decades. With its economic boom and rapid urbanization, the megacities in China, such as Beijing and Shanghai, have experienced serious air pollution in recent years.

This paper examines the monthly industrial production and air quality index (AQI) in Beijing and Shanghai. We first investigate the Granger-causality relationship between industrial production and AQI and then examine the relationship between these two variables based on the Environmental Kuznets Curve (EKC) model. While our evidence shows an inverted-N relationship between AQI and industrial production in both cities, it also suggests that AQI Granger causes real activity in Shanghai but exhibits a bi-directional causality in Beijing. Tests of the dynamic interactions among industrial productions from different sectors (the Primary, Secondary, and Tertiary sectors) and AQI confirm this difference. Especially, variance decomposition indicates (1) the production from the first two sectors explains little variance in AQI in Beijing, while the production from the Secondary sector explains a substantial fraction of variability of AQI in Shanghai, (2) while AQI explains a substantial variance in the production from the Primary and Secondary sectors in Beijing, it explains little variance in production from the Primary sector in Shanghai. Government investment in the environment has a direct effect on AQI but does not significantly change the shape of the EKC. These findings further extend studies of the production-pollution relationship for Beijing and Shanghai.

"Into the Unknown: A Firm-Level Analysis of the Impact of Foreign Direct Investment on Auditor Behavior" (with Nian Lim “Vic” Lee, Danya Mi, and Jingbo Zhang), Under Review, European Accounting Review

Abstract: Foreign Direct Investments (FDI) are important ventures undertaken by firms in order to initiate or expand operations in foreign markets. Unlike ongoing foreign operations, FDI constitutes new undertakings that inherently introduce firms to heightened risks and unforeseeable outcomes. This paper investigates how FDI engagement (specifically, greenfield FDI) by publicly traded firms in the United States impacts the behavior of their auditors. We find that firms incur higher audit fees and are more likely to receive going-concern audit opinions in the years of FDI announcements, likely due to the elevated complexity and uncertainty associated with these engagements. We also find that firms are less likely to restate their financial statements in the periods after FDI announcements. Our findings suggest that while FDI engagement is crucial to facilitate strategic business objectives, it also significantly impacts a firm's financial reporting environment by influencing auditor behavior and audit outcomes.

"Foreign Direct Investments and Earnings Forecast Accuracy" (with Nian Lim “Vic” Lee, Danya Mi, and Jingbo Zhang)

Abstract: We investigate the relationship between Foreign Direct Investment (FDI) and the characteristics of earnings forecasts made by both managers and financial analysts. We find that both management earnings forecasts (MEFs) and analyst earnings forecasts (AEFs) made after a larger number of FDI projects undertaken by a firm are less accurate. We also find that this negative relationship is partially mitigated by the firm’s managerial ability. This suggests that FDI projects introduce uncertainty about a firm’s earnings not just to external market participants, but also to the firm’s management. Additional analyses suggest that the negative relationship between FDI forecast accuracy may extend over multiple years. We document that FDI projects are also associated with lower precision MEFs, higher frequency of MEF revisions, and higher dispersion of AEFs. Overall, our results suggest that FDI is an important factor in a firm’s information environment and FDI disclosure may be useful to facilitate the decision-making of market participants. 

Selected Work in Progress:

"On the Welfare Cost of Constrained Consumption Insurance" (with Dongya Koh and Logan Miller)

"Labor Share and Corporate Innovation: Evidence from China" (with Chenxi Tang, Long Zhao and Xun Xiong)

"Corruption Through Foreign Direct Investments" (with Danya Mi and Jingbo Zhang)

"Suit or Sweater? The Role of CEO's Outfit and ESG Message Focus in Shaping Investor Behavior" (with Danya Mi, Lei Wen, and Jingbo Zhang)