Qi Chen

Journal Article Review of Accounting Studies · March 1, 2024 We find that earnings forecasts by analysts with more local peers, defined as analysts working in the same brokerage office who cover different firms headquartered in the same area, are more accurate. These heightened accuracy effects are concentrated in s ... Full text Cite

Liquidity Transformation and Fragility in the U.S. Banking Sector

Journal Article Journal of Finance · January 1, 2024 Liquidity transformation, a key role of banks, is thought to increase fragility, as uninsured depositors face an incentive to withdraw money before others (a so-called panic run). Despite much theoretical work, however, there is little empirical evidence e ... Full text Cite

The Decision Relevance of Loan Fair Values for Depositors

Journal Article Journal of Accounting Research · January 1, 2024 Using a large sample of U.S. commercial banks from 1994 to 2019, we find that loan fair values are highly relevant for depositor decision making. A one-standard-deviation decrease in loan fair value performance is associated with more than 10% lower uninsu ... Full text Cite

Bank transparency and deposit flows

Journal Article Journal of Financial Economics · November 1, 2022 One of the most widely discussed issues in banking regulation and research is transparency. Yet, whether depositors – banks’ most important claimholders – are affected by transparency, is an empirical open question. Analyzing US commercial banks from 1994 ... Full text Cite

Measuring Accounting Asset Informativeness

Journal Article Accounting Review · July 1, 2022 We develop and validate an empirical measure of the informativeness of accounting assets in measuring firm-specific economic capital, an important determinant of both cash flows and intrinsic values. Our validation tests show that the asset informativeness ... Full text Cite

Asymmetric reporting timeliness and informational feedback

Journal Article Management Science · August 1, 2021 We examine the effects of asymmetric timeliness in reporting good versus bad news on price informativeness when prices provide useful information to assist firms' investment decisions. We find that a reporting system featuring more timely disclosure of bad ... Full text Cite

The effects of audit quality disclosure on audit effort and investment efficiency

Journal Article Accounting Review · January 1, 2019 We develop a model to evaluate the costs and benefits of disclosing information about audit quality. Specifically, we examine whether audit quality disclosure affects auditors' effort and investors' investment efficiency. In our setting, an auditor exerts ... Full text Cite

The effects of bank mergers on corporate information disclosure

Journal Article Journal of Accounting and Economics · August 1, 2017 Applying a difference-in-differences approach to explore variations in the timing of bank mergers in the U.S. over the last two decades, we document an increase in borrowers’ disclosure when their banks engage in mergers and acquisitions. The effect is str ... Full text Cite

Uniform Versus Discretionary Regimes in Reporting Information with Unverifiable Precision and a Coordination Role

Journal Article Journal of Accounting Research · March 1, 2017 We examine uniform and discretionary regimes for reporting information about firm performance from the perspective of a standard setter, in a setting where the precision of reported information is difficult to verify and the reported information can help c ... Full text Cite

Comments and observations regarding the relation between theory and empirical research in contemporary accounting research

Journal Article Foundations and Trends in Accounting · January 1, 2016 We offer some thoughts on the relation between theoretical and empirical accounting research in the context of causal inference, in response to two questions posed by Professor Ivan Marinovic, organizer of the 2014 Stanford University Graduate School of Bu ... Full text Cite

Career-risk concerns, information effort, and optimal pay-for-performance sensitivity

Journal Article Journal of Management Accounting Research · September 1, 2015 Prior work has established that managers’ concerns about the level of their future compensation (i.e., implicit incentives from career concerns) may substitute for explicit incentives in compensation contracts offered to the managers in a single-task setti ... Full text Cite

The effects of public information with asymmetrically informed short-horizon investors

Journal Article Journal of Accounting Research · January 1, 2014 This paper analyzes the effects of public information in a perfect competition trading model populated by asymmetrically informed short-horizon investors with different levels of private information precision. We first show that information asymmetry reduc ... Full text Cite

The sensitivity of corporate cash holdings to corporate governance

Journal Article Review of Financial Studies · December 1, 2012 The average cash holdings of Chinese-listed firms decreased significantly after the split share structure reform in China, which specified a process that allowed previously nontradable shares held by controlling shareholders to be freely tradable on the ex ... Full text Cite

On the optimal use of loose monitoring in agencies

Journal Article Review of Accounting Studies · January 1, 2011 We study the governance implications of firms being privately informed of their potential productivity before contracting with an agent to supply unobservable effort. We show that it can be optimal for high potential firms to have "loose monitoring" in the ... Full text Cite

Endogenous accounting bias when decision making and control interact

Journal Article Contemporary Accounting Research · December 1, 2010 Full text Cite

Payoff complementarities and financial fragility: Evidence from mutual fund outflows

Journal Article Journal of Financial Economics · August 1, 2010 The paper provides empirical evidence that strategic complementarities among investors generate fragility in financial markets. Analyzing mutual fund data, we find that, consistent with a theoretical model, funds with illiquid assets (where complementariti ... Full text Cite

Directors' ownership in the U.S. mutual fund industry

Journal Article Journal of Finance · December 1, 2008 This paper empirically investigates directors' ownership in the mutual fund industry. Our results show that, contrary to anecdotal evidence, a significant portion of directors hold shares in the funds they oversee. Ownership patterns are broadly consistent ... Full text Cite

On the relation between conservatism in accounting standards and incentives for earnings management

Journal Article Journal of Accounting Research · June 1, 2007 This paper studies the role of conservative accounting standards in alleviating rational yet dysfunctional unobservable earnings manipulation. We show that when accounting numbers serve both the valuation role (in which potential investors use accounting r ... Full text Cite

Price informativeness and investment sensitivity to stock price

Journal Article Review of Financial Studies · May 1, 2007 The article shows that two measures of the amount of private information in stock price-price nonsynchronicity and probability of informed trading (PIN)-have a strong positive effect on the sensitivity of corporate investment to stock price. Moreover, the ... Full text Cite

Discussion of which institutional investors trade based on private information about earnings and returns?

Journal Article Journal of Accounting Research · May 1, 2007 Full text Cite

Analysts' weighting of private and public information

Journal Article Review of Financial Studies · January 1, 2006 Using both a linear regression method and a probability-based method, we find that on average, analysts place larger than efficient weights on (i.e., they overweight) their private information when they forecast corporate earnings. We also find that analys ... Full text Cite

Investor learning about analyst predictive ability

Journal Article Journal of Accounting and Economics · February 1, 2005 Bayesian learning implies decreasing weights on prior beliefs and increasing weights on the accuracy of the analyst's past forecast record, as the number of forecast errors comprising her forecast record (its length) increases. Consistent with this model o ... Full text Cite

Positive hurdle rates without asymmetric information

Journal Article Finance Research Letters · April 1, 2004 We present a simple model where a firm will commit to a strictly positive hurdle rate on investment proposals by managers even though the two parties are symmetrically informed about the investments' profitability. Facing a positive hurdle rate, a manager ... Full text Cite

Financial accounting information, organizational complexity and corporate governance systems

Journal Article Journal of Accounting and Economics · January 1, 2004 We posit that limited transparency of firms' operations to outside investors increases demands on governance systems to alleviate moral hazard problems. We investigate how ownership concentration, directors' and executive's incentives, and board structure ... Full text Cite

Cooperation in the Budgeting Process

Journal Article Journal of Accounting Research · December 1, 2003 In this article I analyze the role of cooperation between firm divisions in the budgeting process. I study a setting in which cooperation is a necessary condition for information sharing among division managers, which in turn benefits the principal. The re ... Full text Cite