This study empirically investigates the influence of employees’ subjective perceptions of gender equality in the workplace on firm innovation. By utilizing a dataset comprising 716,541 online reviews from the global job platform Glassdoor, we construct a novel perceived gender equality index through textual analysis and the Word2Vec machine learning algorithm. Initial findings reveal a strong positive relationship between employees’ perceptions of gender equality and firm innovation, underscoring the critical role of perceived equality in the workplace. Through mediation analyses, we investigate the psychological mechanisms driving this influence, identifying employee satisfaction and mental health as key mediators. Moreover, this positive relationship is especially prominent in firms characterized by high levels of organizational complexity and market competition. Our research enriches the existing literature by offering a novel measurement approach and illuminating the gender equality–innovation nexus, with significant implications for firms’ strategic endeavors towards genuine gender equality.

While artificial intelligence (AI) adoption is increasingly critical, firms often exhibit a divergence between symbolic adoption and substantive action. This study investigates this opportunistic gap, conceptualized as AI washing. Drawing on the resource-based view, we examine how different types of organizational slack influence AI washing based on a large sample of Chinese listed firms. The empirical results reveal an asymmetric effect. Unabsorbed slack provides high resource flexibility that effectively suppresses AI washing. Conversely, absorbed slack induces resource rigidity, which is associated with an inverted U-shaped relationship between absorbed slack and AI washing. Furthermore, boundary conditions such as asset specificity, as well as financial constraints significantly moderate these relationships. By shifting the research focus toward the organizational drivers of AI washing, this study offers critical insights into bridging the gap between symbolic adoption and substantive action.

Chief Operating Officers (COOs) play an essential role in corporate operations. Despite this critical function, they have received comparatively little scholarly attention relative to other C-suite executives. Drawing on upper echelons theory as the theoretical foundation, we examine whether COOs' long-term orientation contributes to firm value. Based on a dataset comprising 11,038 firm-year observations from U.S. manufacturing companies over the period from 1992 to 2020, we find that COOs with a long-term orientation can enhance firm value. Furthermore, this relationship is strengthened in firms with robust monitoring mechanisms, such as security analysts and independent directors, and in those employing structured management practices. These findings contribute novel insights to recent calls for 'time' in operations and the roles of COOs and provide theoretical and managerial implications from the perspective of operations management.

We provide a robust measure of isomorphic behaviors of corporate social responsibility (CSR) practices by using Latent Dirichlet Allocation (LDA) topic model to uncover the informational content within CSR reporting, which is a comprehensive document that outlines a company's efforts, strategies, and performance related to social, environmental, and governance responsibilities. Focusing on state-owned enterprises (SOEs), we investigate whether these firms exhibit more homogeneous CSR practices compared to non-SOEs, in response to institutional pressures. In line with institutional theory, our analysis reveals that SOEs are more likely than non-SOEs to align their CSR practices with those of peer SOEs from the previous year in pursuit of legitimacy. This tendency is especially pronounced in pollution-intensive industries and firms under mimetic and normative pressures. Furthermore, we find that geographical proximity and board interlock networks are two mechanisms facilitating the dissemination of CSR-related information. Our results hold under a series of robustness and endogeneity tests.

This paper draws upon resource dependence theory and investigates how trade policy uncertainty affects firm strategic innovation management in China. Adopting a novel machine learning approach called Word2Vec, we construct and validate a measure of firm-level managers' perceived trade policy uncertainty (TPU). We find that TPU has a positive effect on the number of total patent applications, but this positive effect is totally driven by low-quality patents instead of high-quality patents. Moreover, we document that firms have stronger incentives for such strategic innovation behavior when the underlying firms are more financially constrained, and/or when the management is more myopic.

In this paper, we investigate whether and how investors of suppliers learn from the private information embedded in the customer credit default swap (CDS) market prior to customer earnings announcements. We find that investors of suppliers indeed incorporate the customer private information revealed in the CDS market into the supplier valuation, thereby leading to significant changes in suppliers’ future stock prices. Moreover, such price discovery effect is more pronounced when: (i) the level of customer private information revealed in the CDS market is more prominent; (ii) the customer bond market is more illiquid; (iii) the customers are expected to report bad earnings news or experience deteriorated credit conditions; (iv) the strength of the supplier–customer economic bond is stronger. Our results remain robust when we control for the supplier's own CDS market price discovery effect or conduct matched sample analyses. Finally, utilizing the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank Act) as an exogenous shock, we show that the effect of customer CDS trading on suppliers’ future stock prices is less pronounced after the Dodd–Frank Act due to more explicit regulation on informed trading activities. Overall, our study documents significant cross‐market information transmission along the supply chain network (i.e., from the customer derivative market to the supplier equity market).

Compared to the corporate bond and stock markets, investors prefer the CDS market to implement insider trading since the CDS market is less regulated and trading in this market on their private information is relatively easy without generating great transaction costs. Social networks, board networks in particular, are one of the central features of most economic activities and play an important role in information transmission. Therefore, investors are motivated to make use of the informational advantage gained from well-connected directors in the CDS market. In this paper, we investigate whether and how insider trading in the credit default swap (CDS) market is influenced by the corporate board network, formed by interlocking boards. We use CDS innovation as a proxy for the intensity of insider trading in the CDS market. To estimate the centrality of a firm position in the board network, we use the average quintile ranks of the four commonly used normalized board network centrality measures. We test our hypothesis based on a large sample of U.S. firms from 2004-2014 and find strong evidence that firms with a more centralized position in the board network experience a higher degree of insider trading in the CDS market. Our results suggest that the board network facilitates private information leakage to investors, resulting in more active informed trading in the CDS market. Moreover, such an association is more pronounced for firms with negative earnings news and for firms with weak corporate governance. In addition, using the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) as a quasi-natural experiment, we document that insider trading becomes less active after the passage of the Dodd-Frank Act. Our results still hold when we repeat the baseline analysis using four centrality measures separately or when controlling for the number of banking relationships. Our results add both to the insider trading literature and the social networks literature by examining the relationship between board network centrality and insider trading behavior in the CDS market. The findings indicate that board networks could serve as a relationship network that transmits private information to outside investors.

This study examines investors' hedging behaviours in the credit default swap (CDS) market in response to the managerial tone of the Management Discussion and Analysis section in 10-K/Q flings. Utilising CDS positions data derived from the Depository Trust & Clearing Corporation, we first document that managerial tone is negatively associated with CDS positions. We further find that such an effect is stronger for investors with less reliable alternative information channels and for firms with greater default probability. Our inferences persist when using the abnormal tone from a two-stage analysis, when using change model regression, and when filtering out other potential confounding impacts. The results of this study advance the understanding of how the linguistic tone presented by management affects CDS market investors' hedging decision making through the use of public accounting information in financial disclosures.

In this study, we investigate whether the unpleasant mood of managers caused by air pollution leads to poorer decision-making quality. Using a sample of 9,282 firm-year observations from 2014 to 2017 in China, we show that (i) the mood of managers becomes more negative as air quality decreases; and (ii) there is a negative relation between air pollution and financial reporting quality. Furthermore, this association is stronger for firms with (i) weaker corporate governance; and (ii) top management teams with a lower average age, fewer females and a lower average educational level. Our results hold through various robustness tests.

This paper explores the financial implications of the bullwhip effect in the credit default swap (CDS) market. Using firms' supply chain hierarchical positions to proxy for exposure to the bullwhip effect and CDS positions data, we find that positions further upstream within the supply chain network are associated with more CDS positions with economically significant magnitudes, suggesting that investors employ CDS contracts to hedge against the financial risk of underlying firms that are exposed to a greater bullwhip effect. The positive impact of the bullwhip effect on CDS positions is more pronounced for firms with greater information uncertainty. Our results hold after we control for sample selection bias, rule out an industry-level bullwhip effect, mitigate the effect of hedging demand for accounts payable and debt exposure, and remove the influence of risk pooling, exposure to productivity shocks, and the financial crisis. This study contributes to both the supply chain management and finance literature.

From the perspective of information commonalities among firms with director interlock relationships, this study mainly investigates the outcomes of earnings forecasts by analysts who choose to concentrate on interlocked firms (analysts following both a firm and its interlocked partner firm in their research portfolio). Using interlocked A-share firms listed in the Chinese Shanghai and Shenzhen Stock Exchanges from 2008 to 2013 as samples, we empirically find that analysts who concentrate on interlocked firms produce more accurate earnings forecasts than analysts who do not. In additional analysis, we also find that analysts with an interlock concentration provide superior earnings forecast quality for other non-interlocked firms in their research portfolios. Finally, through examining the market reaction to interlocked firms, we find that analysts with an interlock concentration provide new information and improve information efficiency for the capital market.

We investigate whether a firm's risk pooling affects its analysts’ forecasts, specifically in terms of forecast accuracy and their use of public vs. private information, and how risk pooling interacts with a firm's position in the supply chain to affect analysts’ forecasts. We use a social network analysis method to operationalize risk pooling and supply chain hierarchy, and find that risk pooling significantly reduces analysts’ forecast errors and increases (decreases) their use of public (private) information. We also find that the positive (negative) relationships between risk pooling and analyst forecast accuracy and analysts’ use of public (private) information are more pronounced upstream than downstream in a supply chain.

In this paper, building upon information acquisition theory and using portfolio methods and system equations, we made an empirical investigation into how online vendors and consumers are learning from each other, and how online reviews, prices, and sales interact among each other. First, this study shows that vendors acquire information from both private and public channels to learn the quality of their products to make price adjustment. Second, for the more popular products and newly released products, vendors are more motivated to acquire private information that is more precise than the average precision to adjust their price. Third, we document a full demand-mediation model between rating and price. In other words, there is no direct linkage between price and rating, and the impact of rating on price (the vendor learning) as well as the impact of price on rating (the consumer learning) are all through demand. Our results show that there is no fundamental difference between the pricing decisions with and without the consumer generated contents. The price is still driven by the supply and demand relationship and vendors only adjust their price in response to review change when those reviews impact sales. We proposed either the impact of reviews has been incorporated into sales or reviews are less truth worthy due to potential review manipulation. Given the complicate situation, we call for further study to unveil this double learning process with double blinding results.

This paper investigates whether annual report readability matters to CDS market participants and how it affects their evaluation on a firm's credit risk, as measured by CDS spreads. We find that the less readable the annual reports, the higher the CDS spreads. Furthermore, the impact of readability on CDS spreads is more concentrated on firms with high information asymmetry and with investment grade ratings. Our results suggest that investors take into account the readability in their view of the firms' credit risk. Creditors appear to suffer higher cost on CDS protection of the debts if the underlying firms have less readable annual reports.

This paper examines the influence of director interlock on firms' discrete accounting method choices from the perspective of behavior diffusion. We argue that firm managers will imitate their interlocked-partner firm's accounting method choices when choosing their own accounting methods. We find that when there is an interlock relationship between two firms, their accounting method choices, including inventory and depreciation methods, are similar to each other, indicating that accounting method choices can diffuse across firms through director interlock. In addition, such similarity is greater the longer the interlock relationship between the two firms is and as uncertainty increases. Further, the interlock effect on depreciation methods is larger for firms whose interlock directors have accounting backgrounds. Finally after considering sample selection bias, the influence of industry homogeneity, the issue of endogeneity, the influence of interlock direction, using accruals as a measurement of the aggregations of accounting method choices, and so on, our results are still robust.

Purpose Existing literature in experimental accounting research suggests that accounting professionals and people with accounting backgrounds tend to have a lower level of moral reasoning and ethical development. Motivated by these findings, this paper aims to examine whether chief executive officers (CEOs) with accounting backgrounds have an impact on firms’ earnings management behavior and the level of accounting conservatism. Design/methodology/approach The authors classify CEOs into those with and without accounting backgrounds using BoardEx data. Using discretionary accruals from several different models, they do not find that CEOs with accounting backgrounds are more likely to engage in income-increasing accruals. However, the authors find that CEOs with accounting backgrounds exhibit lower levels of conservatism, proxied by C-scores and T-scores (Basu, 1997). This finding suggests that CEOs with accounting backgrounds recognize bad news more quickly than good news, consistent with the accounting principle of “anticipating all losses but anticipating no gains”. Findings The authors show that firms whose CEOs have accounting backgrounds exhibit lower levels of accounting conservatism. However, these firms do not exhibit higher levels of income-increasing discretionary accruals. This study documents the impact of CEOs’ educational backgrounds on firms’ accounting choices and confirms prior findings in experimental accounting research using large sample archival data. Originality/value This paper is the first study that investigates the impact of CEOs’ accounting backgrounds on firms’ financial reporting policy. The findings may have some policy implications. If accounting backgrounds of CEOs can make a significant difference on firms’ behavior, it is reasonable to make CEOs accountable for the quality of financial reporting. This paper is one of the first to empirically test inferences drawn by experimental accounting research. There has been a gap between archival and experimental accounting studies. The authors propose that interesting research questions can be addressed by filling in such a gap.

Purpose This study aims to investigate the motivation of financial analysts issuing forecasts on weekends and the impact of such behavior on forecast accuracy and analysts’ careers. Design/methodology/approach Logistic regression and ordinary least squares models with Huber–White standard errors were used in this study. Findings This paper first documented the emerging trends of the weekend forecasts after 2000. Longitudinal data from 2002 to 2011 validated that analysts’ conscientious timing of information release in line with their workload and confidence level gives more accurate forecasts. Further, given the same accuracy, analysts exhibiting diffident behaviors (analysts who are predicted to work on weekdays but in fact work on weekends) are not fired or demoted by brokerage houses, but those exhibiting inactive behaviors (analysts who are predicted to work on weekends but did not do so) are more likely to be dismissed or demoted by brokerage houses, indicating that brokerage houses are aware of the negative effect of both behaviors, but treat them differently. Research limitations/implications Weekend versus weekday proxies for an analyst’s timing of information release consider only one of many timing options. Other timing proxies, the nature and the composition of the information release of analysts are not examined in this study. Practical implications For practitioners, the results indicate that depending on the alignment, capital market can predict analysts’ future forecast accuracy, and hence, respond accordingly. For example, in addition to analyst forecast level or change, investors could pay attention to when the information is released to the market and possible reasons behind the choice of timing. Investors can thus better assess the forecast accuracy of one specific forecast and respond with the right action. Furthermore, analysts can better project their own forecast accuracy and career potential by assessing to what extent their forecasts are released conscientiously. Social implications This study examines analysts’ forecast behavior, but generate some insights on linking the analysts and investors in the capital market. Originality/value This study is the author’s original work.

In this study, we revisit the relationship between analyst firm coverage and forecast accuracy. In contrast to the proposed negative association in Clement (1999) owing to the portfolio complexity effect, we hypothesize an economy-of-scale effect' that is likely to dominate when analysts rely mostly on public information. In support of the latter effect, we find a positive association between firm coverage and forecast accuracy after the enactment of Regulation Fair Disclosure (Reg FD), which substantially reduces the flow of material private information to analysts. Such a result survives a battery of robustness analyses. We further show that, in the post-Reg FD period, covering more firms increases an analyst's probability of being selected as a star analyst in the subsequent year. Overall, our findings highlight the importance of the information environment in shaping the economic link between an analyst's firm coverage and forecast accuracy.

Extensive research suggests that performance tends to improve with experiences, on the one hand, and that experiences may sometimes lead to maladaptation under environmental change, on the other hand. In this study, we examine how financial analysts learn from experiences and how an institutional change affects learning and adaptation. We find that the value of experiences is situated in the context of the prevailing institutional logic. When the prevailing institutional logic shifts, experiences in an old institutional regime may negatively affect performance in a new institutional regime. We also find that, when employees suffer from negative experience transfer, they may risk being let go by their employers and also being completely exiled from their field. However, a filed may consist of multiple subfields with varying institutional logics, and the institutional logic in some subfields may be consistent with the direction of the institutional change. As a result, some subfields may allow people to accumulate experiences that may help them survive and thrive under institutional change. We draw implications for experiential learning, organizational adaptation, and institutional change.