A one-off event provided HKUST researchers with an unparalleled opportunity to investigate a “hot topic” related to stock markets: post-earnings announcement drift, or PEAD. It is defined as a significantly positive relation between currently announced earnings “surprises” (when results are above or below expectations) and subsequent stock returns. What ... Read More

The venture capital (VC) industry plays an important role in supporting entrepreneurship and innovations in a range of industries. It functions as a gatekeeper, selecting promising new ventures for continued investment and support. It also serves as an intermediary, linking capital providers—large institutions such as endowments, foundations, and pension ... Read More

All over the world, businesses and governments are aggressively steering consumers away from counter and telephone towards online service. In 2011, the state of Florida enacted a law that required application for unemployment benefit through the internet, an online skills test, and regular reports on search for work. [At time of publication] German airline ... Read More

If your new public company survives the first three years of life – the chances are that you are well on the way to success in the corporate world. So how can you help avoid “corporate mortality” in those early years? Financial intermediaries play a more important role than you think. One of the distinct advantages of corporations over other business forms ... Read More

How do consumers learn from their consumption experience? Imagine new parents have to shop for diapers for the first time, with little prior knowledge. As they find out more about different brands in the following weeks and months through experience, they face a “strategic” choice. In other words, they can “exploit” their knowledge and select the most ... Read More

There has been a lively discussion recently within the financial world on ways in which company earnings are reported; in other words, what are the merits and otherwise of GAAP versus “Street” earnings? GAAP provides uniformity through the application of standardized “generally accepted accounting principles” developed by the Financial Accounting and ... Read More

“The early bird may get the worm, but the second mouse gets the cheese”; this quote, attributed to comedian Steven Wright and an extension on an old proverb, neatly applies to the experience of firms attempting to enter new overseas markets. Early entrants are at a disadvantage as their inexperience leads to mistakes and even failure; but can later entrants ... Read More

Selling a product before a consumer will actually use it can benefit both sellers and consumers. It helps sellers to plan ahead and reduce demand variability. And for consumers, they can ensure they will get the product, possibly at a lower price. Selling in advance also gives sellers an opportunity to exploit consumer uncertainties about their valuations ... Read More

Executive pay is one of the most hotly debated topics around. Are executives being fairly compensated for their contributions to firm and shareholder value, or are they overpaid? One of the obstacles to finding the answer has been the difficulty in measuring pay versus contribution, but now Bang Dang Nguyen and Kasper Meisner Nielsen have come up with an ... Read More

Enron Corporation, Tyco International, WorldCom… you don’t have to be an investor or an economist to know that these were three of the more notorious corporate scandals of the early 2000s. In 2002, in response to these and other malpractices the US Congress passed the Sarbanes-Oxley Act (SOX) by an overwhelming majority, with a view to strengthening ... Read More