Welcome! I am Lynn, an Associate Professor of Accounting at the National University of Singapore. My research area is in the field of empirical financial accounting with a focus on banking ESG, disclosure regulation, and climate change.
Research Interests
Disclosure, Accounting Regulation, Financial Institutions, Bank Accounting, Debt Contracting, Environmental Social and Governance (ESG)
Contact information
Transmission Effects of ESG Disclosure Regulations through Bank Lending Networks, Dissertation
Journal of Accounting Research 2023 (June), 61 (3): 935-978
Conference: JAR Conference 2022
This paper studies whether and how ESG disclosure regulations imposed on banks generate transmission effects along the lending channel. I use a setting of U.S. firms borrowing from non-U.S. banks and exploit the staggered adoption of ESG disclosure regulations in banks’ home countries. I find that exposed borrowers of affected banks improve their environmental and social (E&S) performance following the disclosure mandate. Consistent with banks enhancing both their engagement and selection activities, affected banks impose more environmental action covenants in loan contracts, and they are more likely to terminate a borrower with bad E&S records following the regulation. Further evidence shows that the transmission effects are stronger when a disclosure regulation is well enforced (as indicated by a greater increase in banks’ disclosure) and among borrowers with greater switching costs. Collectively, the findings document the role of lending relationships in transmitting the real effect of ESG disclosure regulations from banks to borrowing firms.
Do Depositors Respond to Banks' Social Performance?, with Yi-Chun Chen and Mingyi Hung
The Accounting Review 2023 (July), 98 (4): 89-114
We study whether and how banks’ social performance affects depositors, who hold demandable debt with pervasive government protection. Exploiting the regulatory releases of bank performance ratings for community development and a difference-in-differences design, we find a decline in deposit growth following the release of negative bank social performance. In addition, deposits that are impacted by the negative events flow to nearby banks with high social performance. Further analyses find that the results hold similarly among insured and uninsured deposits and are primarily driven by banks with a large proportion of deposits from high-trust and pro-social counties, and in poor information environments. Overall, we contribute to the literature by documenting the importance of social performance to non-shareholder stakeholders and providing implications for bank stability.
Learning from Peers: Evidence from Disclosure of Customer Complaints, with Yiwei Dou, Mingyi Hung, and Guoman She
Journal of Accounting and Economics 2024 (April-May), 77 (2-3): 101620
Best Paper Award, MIT Asia Conference in Accounting 2021*
In 2013, the U.S. Consumer Financial Protection Bureau released a database of consumer complaints filed against banks under its supervision (“CFPB banks”). We find that after the disclosure, rival banks exhibit a greater increase in mortgage approval rates in markets with more intensive mortgage complaints about CFPB banks. The effect is weaker when rivals have more expertise in the local market, are less concerned about credit risk due to mortgage sales, and locate in areas with more alternative information about the CFPB banks. The effect is concentrated in severe complaints and complaints related to loan underwriting practices. In addition to approving more loans, rivals also open more branches and are more likely to post a job opening in these markets. The findings suggest that these banks learn from the nonfinancial disclosures about operational deficiencies of peers (i.e., CFPB banks) in local markets, which alleviates their adverse selection concern about expanding.
Firm Boundaries and Voluntary Disclosure, with Thomas Bourveau, John Kepler, and Guoman She
The Accounting Review 2024 (July), 99 (4): 111-141
Conference: Utah Winter Accounting Conference 2022*
We study how vertical integration shapes firms' public disclosures. Theory suggests that firms can use public disclosure to coordinate with supply chain partners and predicts a substitution between vertical integration and public disclosure of future strategic plans, since the internalization of production reduces the need to publicly coordinate. Using data on the extent of vertical integration, we find that firms that become more vertically integrated reduce their public disclosures about their product strategies and that the reduction is most pronounced for vertically integrated firms with greater internalization of production and those with the largest informational and strategic frictions along the supply chain.
How Government Procurement Shapes Corporate Climate Disclosures, Commitments, and Action , with Omri Even-Tov, Guoman She, and Detian Yang
Review of Accounting Studies 2025 (June), 30 (2): 1968-2014
Best CSR Paper Award, AFAANZ Annual Conference 2024
This study examines how government procurement impacts firms' environmental disclosures and whether they have tangible effects. Using a triple-difference (DDD) research design that exploits the exogenous increase in federal funding allocations to counties based on population census revisions, we find that firms with high exposure to government contracts significantly increase climate disclosure following expanded procurement opportunities. We also document that enhanced disclosure is characterized by a positive tone that emphasizes firms' green investment and commitment to climate adaptation. The effect is more pronounced in counties with a greater increase in procurement volume and when firms have lower ex ante sustainability performance. Finally, we find firms that increase climate disclosure are more likely to earn government contracts, and they undertake real actions by reducing toxic emissions and enhancing the development of green products. Overall, our results suggest government procurement promotes corporate climate responsibility by incentivizing firms to undertake climate mitigation actions.
The Impact of Bank Financing on Borrowers' Voluntary Disclosures and Real Investments, with Mingyi Hung, Yupeng Lin, and Zilong Zhang
Management Science, online available on May 29, 2025
This paper examines how an increase in bank lending affects firms’ investment disclosures and policies. Exploiting the unconventional liquidity injections by the European Central Bank in 2011–2012, we find that U.S. borrowers of European Union (EU) banks receive greater bank financing and issue more management capital expenditure (capex) forecasts following the liquidity injections. In contrast, we find no evidence of changes in bond financing or issuance of management earnings forecasts. We also find that EU banks’ U.S. borrowers on average receive negative market reactions to their capex forecasts and make no change in investment following the liquidity injection. Further, relative to firms with positive feedback, firms with negative feedback have a lower increase in investment but a higher increase in financial assets. Additionally, we find that the effect of increased bank lending on management capex forecasts is more pronounced among banks with weaker financial conditions and among borrowers with greater financial constraints, higher growth volatility, and more informed trading. These findings highlight the important role of capex forecasts in seeking market feedback following increased bank lending and suggest that market feedback helps explain why the transmission of bank credit to corporate investment did not occur following the liquidity injections.
Horizon Problems in the Implementation of Bank Reporting Regulation: Evidence from China, with Mingyi Hung, Yi Ru, and Guoman She
Review of Accounting Studies, accepted
We investigate the role of politicians’ horizon incentives in banks’ response to the adoption of a forward-looking provisioning model. We argue that horizon incentives, defined as the tendency of politicians to focus on short-term performance in the late stage of an official term, motivate banks to use the discretion of provisioning to obfuscate the reporting system. Using the mandatory shift to the expected credit loss model in China, we find that the increases in the magnitudes and timeliness of loan loss provisions following the mandatory shift are smaller for state-owned banks with late-term local governors than other state-owned banks. Further, while the mandatory shift reduces the pro-cyclicality of lending during the COVID-19 recession for state-owned banks without late-term governors prior to the recession, it has little impact on state-owned banks with late-term governors prior to the recession. Overall, our findings suggest that politicians’ horizon incentives lead to opportunistic underreporting of provisions and dampen the effectiveness of financial reporting regulation in reducing lending pro-cyclicality.
