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

One of the greatest fears of investing in a company is that its stock prices may “crash” – in other words, the investment will suffer extreme negative stock returns. An important determinant of crash risk is the financial reporting environment in which a firm operates. This changed significantly in 2005 when dozens of countries mandated the adoption of ... Read More

A manager bribes government officials; a manager of a state-owned enterprise misappropriates its assets; accounts are manipulated to inflate earnings… How do corporate scandals such as these affect a company’s value in terms of political ties and market credibility – and what is the relative importance of these two factors? While previous studies have ... Read More

Politics and political connections are known to play a role in the privatization of state-owned enterprises (SOEs). New research shows they also play a role in the overseas listing of Chinese SOEs, as managers of more politically connected firms benefit in terms of media recognition and promotion to senior government positions after they list. The findings ... Read More