1. Quasi-Indexer Ownership and Insider Trading: Evidence from Russell Index Reconstitutions (with Stephen Hillegeist) | 2021, Contemporary Accounting Research, 38(3), 2192–2223.
Areas: Institutional Investors | Insider Trading
Abstract: The prior literature on the association between institutional ownership and insider trading has produced a mixed set of results. 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, we 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, we 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. Our evidence on the profitability of buys is mixed. In addition, we find firms with higher quasi-indexer ownership are more likely to have and/or more strictly enforce blackout policies.
Presentations:
2017 Arizona State University/University of Arizona Joint Accounting Conference
2017 University of Technology Sydney Summer Accounting Conference
University of Tasmania
Arizona State University
University of Auckland
University of Western Australia
Media Coverage: Columbia Law School’s Blog on Corporations and the Capital Markets
2. Institutional Dual-Holders and Corporate Disclosures: A Natural Experiment (with Lin Cheng, Qiang Cheng, and Mark Yan) | 2025, Contemporary Accounting Research, 42(2), 953–984.
Areas: Disclosures | Debt Markets (Corporate Loans) | Institutional Investors
Abstract: This study examines the impact of the presence of institutional dual-holders, whose portfolios hold both loans and equity securities of the same firms, on those firms’ voluntary disclosures. Using mergers between institutional shareholders and lenders to the same firms as exogenous shocks to identify firms with institutional dual-holders that have high relative equity ownership, we document that such firms are less likely to provide management forecasts and disclose fewer voluntary 8-K items. In cross-sectional analyses, we find that the reduction in voluntary disclosures is more pronounced when institutional dual-holders have higher board representation and when firms have lower litigation risk. In addition, we find that firms with institutional dual-holders provide more private disclosures to their lenders via loan contract covenants. Additional analyses indicate that the impact of institutional dual-holders on corporate disclosures is driven by both their monitoring and trading incentives.
Presentations:
2020 AAA Annual Meeting
2020 AAA Western Region Meeting (Doctoral Student-Faculty Interchange session)
University of Arizona
National University of Singapore
Singapore Management University
The University of Hong Kong
China Europe International Business School
Tsinghua University
Peking University
3. Do Machine-Readable Disclosures Facilitate Regulatory Scrutiny? Evidence from SEC Comment Letters (with Ben Wang, Qiang Wu, and Emma Xu)
Revise and resubmit at Journal of Accounting and Economics
Areas: Disclosures | AI | Government
Abstract: This paper examines whether machine-readable disclosures enhance regulatory scrutiny by the Securities and Exchange Commission (SEC). In 2018, the SEC adopted a new filing format (XHTML) with embedded XBRL tags (Inline XBRL, or iXBRL), significantly improving the machine readability of financial reports. Using the mandatory adoption of iXBRL in a difference-in-differences design, we find that the SEC is more likely to issue comment letters to firms subject to the iXBRL mandate compared with firms not yet required to adopt it. This increase is more pronounced when the SEC’s workload is heavier and when filings are ex ante less human-readable and less machine-readable. Furthermore, using a large language model (LLM), we find that comment letters sent to firms adopting iXBRL prompt firms to take higher levels of corrective actions, indicating higher-quality review. The SEC also produces more outputs, such as longer comment letters, and initiates comment letters more quickly. Collectively, our findings provide fresh evidence that machine-readable disclosures improve the SEC’s efficiency and strengthen regulatory oversight.
Presentations:
Northeastern University
2025 China Journal of Accounting Research (CJAR) Summer Workshop
2025 AAA Annual Meeting
2025 Annual Congress of the European Accounting Association
Xiamen University
Wuhan University of Technology
Beijing Institute of Technology
2024 Journal of Accounting, Auditing and Finance (JAAF) Conference
2024 International Conference of the Journal of International Accounting Research (JIAR)
Hong Kong Polytechnic University
Awards:
Best Paper Award at the 2025 CJAR Summer Workshop
Best PhD Paper Award at the 2024 JAAF Conference
Best Paper Award at the 2025 PhD Consortium of Hong Kong Polytechnic University
4. The Effect of Tax Abatement Disclosure on Municipal Financing (with Lei Li, Jaron Wilde, and Colin Zeng)
Revise and resubmit at The Accounting Review
Areas: Disclosures | Debt Markets (Municipal Bonds) | Tax | Government
Abstract: Local governments' use of business tax incentives (abatements) is an economically significant, if controversial, practice. But understanding of how abatements affect governmental financing costs is limited. While mandatory disclosures of local government abatements could mitigate information asymmetry and enhance monitoring of their use, they could also reveal unfavorable information about how (or how much) governments use them, leading to investor backlash. We exploit the recent adoption of GASB standard 77, which requires local governments following GAAP to disclose information about tax abatements, to investigate whether and how mandatory abatement disclosures affect municipal financing costs. Our difference-in-differences analyses suggest that the adoption of GASB 77 is associated with significant decreases in the cost of bonds issued by treated counties. This effect is more pronounced in counties with higher (lower) information asymmetry (public and regulatory monitoring). Further analysis reveals that treated counties experience increases in GDP growth and decreases in unemployment, consistent with public disclosures helping discipline tax abatement decisions. Overall the results provide compelling evidence regarding the economic benefits of governmental tax incentive transparency.
Presentations:
2024 National Tax Association Annual Conference
2023 Hong Kong Polytechnic University Fixed Income and Institutions Research Symposium
2023 Journal of Accounting, Auditing and Finance (JAAF) Conference
The Tenth International Conference of the Journal of International Accounting Research
2023 European Accounting Association Annual Congress
Hong Kong Polytechnic University
5. Human Readability of Disclosures in a Machine-Readable World (with Andy Call, Ben Wang, and Qiang Wu)
Revise and resubmit at The Accounting Review
Areas: Disclosures | AI
Abstract: While regulators emphasize the need for machine-readable corporate disclosures, we examine how improvements in machine readability of textual and numerical information affect the human readability of these disclosures. Relative to the 2009 XBRL mandate that required a separate XBRL exhibit of financial statement numbers and footnotes, the 2019 Inline XBRL (iXBRL) regulation improves the machine readability of both textual and numerical content throughout corporate filings. Utilizing the iXBRL mandate as a quasi-exogenous shock to machine readability, we observe a negative effect of machine readability on human readability. In addition, we document that following the iXBRL regulation, disclosures become less informative to retail investors, who generally have less ability to process corporate disclosures with machines and who are more reliant on human readability, and that they reduce ownership in stocks impacted by the iXBRL regulation. Further evidence suggests the reduction in human readability is driven by both lower incentive to allocate effort toward making disclosures human-readable and reduced attention to human readability. Our results are robust to a regression discontinuity design and an alternative difference-in-differences design. Overall, our findings indicate that improved machine readability has implications for the human processing of disclosures.
Presentations:
2024 Accounting Research Conference at the University of Notre Dame
The University of Texas at Austin
Columbia University
George Washington University
University of Manitoba
2024 Bauer Accounting Research Symposium at the University of Houston
2024 Hawaii Accounting Research Conference
Utah State University
2023 AAA Annual Meeting
Renmin University of China
Hong Kong Polytechnic University
6. Government Agencies’ Demand for Audit Quality: Evidence from Government Audit Procurement (with Matt Ege and Summer Liu)
Areas: Audit Quality | Government
Presentations:
Iowa State University
2025 Oaxaca Auditing Research Consortium
7. The Listenability of Disclosures and Firms’ Information Environment (with Andy Call, Ben Wang, and Qiang Wu)
Areas: Disclosures | AI | Analysts
Abstract: We introduce a new construct, listenability, defined as the ease with which humans comprehend spoken language, and examine the association between the listenability of corporate vocal disclosures and firms’ information environments. Using a Large Speech Model (LSM) trained on about 680,000 hours of labeled audio data, we analyze audio recordings of 50,280 earnings calls and find that the listenability of managers during conference calls is higher among firms with strong analyst coverage and institutional ownership, but lower when reporting a large earnings surprise. In addition, higher listenability of managers’ presentation is associated with higher-quality interactions with analysts during the Q&A session of the call and higher-quality information production by analysts shortly following the call. Further, higher listenability is associated with stronger price responsiveness in the short window after the call as well as lower bid-ask spreads. These findings suggest clear and effective corporate oral communications facilitate a better information environment.
Presentation:
2025 Tsinghua University Artificial Intelligence and Capital Market Research Conference (scheduled)
2024 AAA Annual Meeting
Northeastern University
Hong Kong Baptist University
Hong Kong Polytechnic University
Renmin University of China
Shanghai University of Finance and Economics
Central University of Finance and Economics
8. Documenting the Undocumented: The Impact of Employment Verification Mandates on Government Borrowing Costs (with Lei Li, Nancy Su, and Colin Zeng)
Areas: Debt Markets (Municipal Bonds) | ESG (Labor) | Information Technology | Government
Abstract: The real consequences of information technology adoption represent an important yet underexamined issue. Our research focuses on the staggered implementation of the Employment Verification (E-Verify) system—an information system adopted by the government to improve labor law compliance by electronically verifying employment eligibility through real-time, automated information-matching technology. We examine its real effects through the lens of public finance and find that E-Verify adoption significantly reduces municipal bond offering spreads, indicating lower government borrowing costs. This effect is more pronounced in states that had larger populations of undocumented immigrants prior to the enactment of the E-Verify system, in states perceived to enforce E-Verify more strictly, and in states where residents are more opposed to undocumented immigration. In contrast, the effect is weaker in states that are more economically reliant on undocumented labor. We also find that the adoption of the E-Verify system reduces tax revenues but simultaneously lowers government spending on education and welfare, leading to lower fiscal deficits. Overall, our study offers new insights into the real effects of government-adopted information systems.
Presentations:
2024 AAA Annual Meeting
2024 Asian Finance Association Annual Conference
2024 Journal of Accounting, Auditing and Finance Annual Conference
2024 Journal of International Accounting Research Conference
Hong Kong Polytechnic University
9. Organized Labor and Strategic Disclosure through Online Job Postings (with Daniel Aobdia, Lin Cheng, and Meiling Zhao)
Areas: Disclosures | ESG (Labor)
Abstract: This study examines whether and how unionized employers use online job postings as a strategic disclosure tool to mitigate the bargaining power of labor unions. Utilizing difference-in-differences analyses, we find that unionized employers strategically reduce the level of online job postings during labor negotiations. Cross-sectional tests suggest that these firms’ reduction in the level of job postings during labor negotiations is more pronounced when firms face higher product market competition, when they have greater labor intensity, and when they exhibit higher growth. Further, such strategic disclosure behavior concentrates in the three quarters leading up to the effective dates of collective bargaining agreements. Corroborating evidence suggests that unionized employers also provide fewer specific job postings during labor negotiations. Overall, our study provides evidence that firms strategically communicate with incumbent employees through online job postings.
Presentations:
2025 AAA Annual Meeting
Hong Kong Baptist University
Hong Kong Polytechnic University
Shanghai Jiao Tong University
Xi'an Jiaotong University
2023 CUHK-CUHK(Shenzhen) Accounting Symposium
10. The Long-Term Effects of Personal Wealth Shocks: Evidence from U.S. Audit Partners (with Yinghua Li and Summer Liu)
Area: Audit Quality
Abstract: This study examines whether personal wealth shocks experienced by U.S. audit partners in the remote past have a long-term effect on their audit quality. To investigate this question, we hand-collect data on U.S. engagement partners’ real estate properties and use their housing returns during the 2007–2009 financial crisis as exogenous shocks to their personal wealth in the past. Analyzing audit engagements starting from 2016, we find that the likelihood of restatements by client firms decreases with the magnitude of negative housing returns experienced by engagement partners during the financial crisis, suggesting that past personal wealth shocks leave an imprint on audit partners and affect their audit quality over the long term. This effect is more pronounced when audit partners are more innately risk-averse, when audit firms face greater regulatory or litigation risks, when clients pose elevated audit risks, and when the risks of audit failures being exposed are higher, suggesting that increased risk aversion is the potential mechanism through which audit partners’ past personal wealth losses influence the quality of their future audits. Together, these findings underscore how past personal wealth experiences shape auditor partners’ risk preferences, which in turn influence their risk-taking behaviors in audits over time.
Presentations:
Hong Kong Polytechnic University
11. Mutual Fund Liquidity Management, Stock Liquidity, and Corporate Disclosure
Areas: Disclosures | Institutional Investors
Abstract: This study presents novel evidence that mutual fund liquidity management affects stock liquidity. Exploiting a proposal by the U.S. Securities and Exchange Commission (SEC) as an exogenous shock to mutual fund liquidity management, I find that mutual fund liquidity management improves stock liquidity of firms in mutual fund portfolios. This improvement is more pronounced when mutual funds have stronger incentives to improve portfolio liquidity and more resources to influence firms and when portfolio firms have lower stock liquidity prior to the SEC proposal. Consistent with mutual funds influencing portfolio firms to be more transparent, I further show that improving disclosure among portfolio firms is one mechanism through which stock liquidity is improved. Overall, the results indicate that liquidity management at the fund level has important implications for stock liquidity and information disclosure of portfolio firms.
Presentations:
2023 AAA Southwest Region Meeting
2021 AAA Spark Meeting
2021 Hong Kong Junior Accounting Faculty Conference
2020 AAA Annual Meeting
Hong Kong Polytechnic University
Chinese University of Hong Kong
Hong Kong Baptist University
National University of Singapore
Singapore Management University
University of Hong Kong
Arizona State University
2019 Accounting PhD Rookie Recruiting and Research Camp
Media Coverage: Duke Law School’s Blog
Interviewed by Faculti Media
12. Mutual Fund Strategic Disclosure (with Vikas Agarwal and Shawn Huang)
Areas: Disclosures | Institutional Investors
Abstract: This study documents novel evidence that mutual funds act deliberately to meet the statutory holding thresholds of beneficial ownership disclosure, Schedule 13D/G filings. Further analysis reveals that 13D/G filings help mutual funds raise the demand for the underlying stocks, resulting in higher stock prices and liquidity. We also find that mutual funds engaging in strategic disclosure are much larger and more active in trading than funds not engaging in strategic disclosure. Additional tests suggest that portfolio firms involved in strategic disclosure are smaller and less liquid and have less analyst coverage than other portfolio firms around the holding thresholds, highlighting the incentive of mutual funds to use strategic disclosure to improve the demand for these stocks. Finally, we show that investors who follow mutual funds and invest in companies involved in strategic disclosure may suffer losses in the long run.
Presentations:
University of Missouri
2022 Hong Kong Junior Accounting Faculty Conference
2021 AAA Annual Meeting
Hong Kong Polytechnic University
2018 Arizona State University/University of Arizona Joint Accounting Conference
Texas Tech University
2018 AAA/Deloitte Foundation/J. Michael Cook Doctoral Consortium
Arizona State University
13. Career Experience and Executive Performance: Evidence from Former Equity Research Analysts (with Shawn Huang, Artur Hugon, and Summer Liu)
Areas: Analysts | Disclosures
Abstract: This study examines the portability of skillsets to the top executive position. In particular, we examine CEOs and CFOs who have experience as equity research analysts, finding these executives generate earnings guidance that is more accurate than that of other executives, and make M&A transactions with significantly higher announcement returns. For available executives, we examine their work histories as research analysts, finding stronger results for those who were more accurate forecasters, better stock pickers, more experienced, and those with smaller gaps between their analyst and executive jobs. Beyond these outcomes, we find these executives provide clearer answers to analysts during conference calls, especially when answering forward-looking and quantitative questions. Overall, our evidence suggests that specific skills gained in executives’ formative years significantly impact corporate performance outcomes.
Presentations:
2020 AAA Annual Meeting
2020 Hawaii Accounting Research Conference (plenary session)
2019 Conference on Financial Economics and Accounting (CFEA)
Arizona State University
Nominated for the Best Paper Award at the 2020 AAA FARS Midyear Meeting
Media Coverage: Duke Law School’s Blog