1. Cutting Corners: Does Pay Transparency Impair Workplace Safety? (with Yangyang Chen, Emmanuel Ofosu, & Jeffery Pittman).
Revise and Resubmit at Contemporary Accounting Research
Presented at: CityUHK Brown Bag Seminar, 2025 HKBU Accounting and Finance Workshop,
Abstract: Leveraging the state-level staggered adoption of pay transparency laws as a quasi-natural experiment, we document that workplace safety violations become more frequent and severe afterward, implying that pay transparency undermines workplace safety. In exploring underlying channels, we find that the rise in safety violations stems from lower investments in employee safety, consistent with firms responding to the additional financial and administrative burden imposed by pay transparency laws by cutting corners to protect their profitability. We also provide evidence that the role that pay transparency plays in workplace safety is magnified in financially constrained firms and in firms under more earnings pressure. Additionally, we find that pay transparency laws are irrelevant to non-labor-related violations, suggesting that firms may selectively alter their policies and practices pertaining to employee treatment after such legislation is enacted. Finally, we report that firms' future stock performance suffers when workplace safety failures surface, reflecting another negative economic implication of pay transparency laws.
2. When flexibility Costs too much: Non-Regular Employment and Bank Loan Contracting (with Yangyang Chen, Emmanuel Ofosu, Emmanuel Mensah Begyina).
Under Review at Contemporary Accounting Research.
Presented at: 2026 Global Finance Conference (Best Paper Award), 2026 Vietnam Symposium in Entrepreneurship, Finance and Innovation, CityUHK Brown Bag Seminar.
Abstract: Relative to employees, independent contractors (ICs) provide enhanced operational flexibility and cost efficiencies, yet their goals are less aligned with those of hiring firms. Utilizing a difference-in-differences design around the Massachusetts’ Independent Contractor Law (MICL) of 2004, which led to an exogenous decline in IC usage among firms, we find that banks charge lower spreads to borrowers in Massachusetts—especially those heavily dependent on ICs—compared with other states. The decline is stronger for borrowers with higher employee loyalty and greater litigation risk, suggesting that lenders value improved workforce alignment and reduced legal uncertainties. Conversely, the effect is weaker for borrowers for which operational flexibility from ICs is critical. Supplemental analyses show that the MICL predictably influences non-spread loan terms. It also boosts labor and overall firm productivity and stabilizes firm cashflows. Overall, our findings indicate that lenders prioritize mitigating risks related to workforce misalignment and litigation over securing the operational benefits of IC usage.
3. Mandatory Disclosure of Impending Layoffs and Workplace Safety (with Yiran Kang & Emmanuel Ofosu).
Abstract: The Worker Adjustment and Retraining Notification (WARN) Act instructs employers to provide advance notices to employees affected by mass layoffs. We examine the effect of these mandatory notices on workplace safety. We find an increase in the frequency and severity of workplace safety violations in firms that issue mandatory notices. We provide further evidence that mandatory notices impair workplace safety by diminishing employee cooperation, which is essential for maintaining a safe work environment. We employ the instrumental variable estimation to establish causality. The decrease in workplace safety is stronger among firms with geographically concentrated operations, consistent with geographical concentration aiding employees to learn about mandatory notices. In contrast, the decrease is weakened among firms with high labor mobility, suggesting that when employees have more outside employment opportunities, they are less worried about mandatory notices. Supplemental tests indicate that mandatory notices do not significantly affect non-safety-related labor violations or other forms of corporate violations, further reinforcing the importance of cooperation in promoting workplace safety. Lastly, we find that firms experience a decline in future performance as a consequence of workplace safety violations.
4. Financial development, economic freedom, and renewable energy consumption in Africa (with Emmanuel Kwakye Amoah, Michael Owusu Appiah,Ebenezer Boateng, and Mac Junior Abeka).