25
received daily information about the prices at which their
potato harvests were being resold by middlemen. The
intervention did not change the average quantity that
farmers sold or the revenue they received, but increased the
volatility of sales and revenues. These results are consistent
with a model of sequential competition between a cartel
of middlemen located in the village and a cartel located at
the market. They indicated that the primary constraint to
farmers’ ability to benefit from price information is lack of
direct access to markets.
CLAWBACK CONSEQUENCES
Research by Profs Kevin CW Chen and Tai-yuan Chen
(Accounting) found that a heralded provision of the
controversial 2010 Dodd-Frank Wall Street Reform and
Consumer Protection Act in the US, namely, Section 954 or
the so-called “clawback” mandate, was likely to have an
unwelcome unintended consequence. This Section required
all firms listed on national securities exchanges to recover
any incentive compensation paid to executives on the basis
of erroneous company financial statements. While not yet
mandatory, many companies have voluntarily enabled or
made it a requirement to implement such “clawbacks”.
Previous research found such provisions reduced the number
of corporate financial restatements and increased investor
confidence in financial reports. However, the new research
suggested that gains implied by those findings may be more
illusory than initially thought.
TWITTERING ABOUT EARNINGS
Prof Rong Zheng (Information Systems, Business Statistics
and Operations Management) examined firms’ differential
information dissemination behavior on Twitter. He found
that firms disseminated more earning news with more
financial information in a positive tone when earnings
performance was good; when earnings performance was
poor, less earning news would be released. In addition, firms
released more non-earnings information in a positive manner
shortly after poor earnings announcements. The results
provided evidence that firms were involved in discretionary
dissemination using Twitter. Additional analyses showed
that tweet dissemination could moderate market returns to
earnings surprises.
LEARNING THE OFFICIALS’ STORY
Prof Yongshun Cai (Social Science) published
State and
Agents in China
(Stanford University Press), describing the
crucial role that Chinese government officials have played in
China’s economic development, but also how they have been
responsible for severe problems. Prof Cai looked at how the
Chinese Party-state responded when a government official
committed malfeasance, and how it balanced the potential
political costs of disciplining its own agents versus the loss of
legitimacy in tolerating their misdeeds.
INDIVIDUAL VISION
Prof Jianmei Liu (Humanities) authored
Zhuangzi and
Modern Chinese Literature
(Oxford University Press,
forthcoming in late 2015), a powerful account of how
the ruin and resurrection of Zhuangzi in modern China’s
literary history corresponded to the rise and fall of modern
Chinese individuality. Prof Liu explored modern Chinese
writers’ complicated relationship with “tradition” and shed
light on how the encompassing cultural space inspired by
Zhuangzi’s spirit was allowed to exist in the modern Chinese
literary context.
