Welcome! I am Lynn, an Assistant Professor of Accounting at the HKU Business School. 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.
The Politics of Implementing Bank Reporting Regulation: Evidence from China, with Mingyi Hung, Yi Ru, and Guoman She
The Impact of Bank Liquidity Injections on Borrowers’ Voluntary Disclosures and Real Investments, with Mingyi Hung, Yupeng Lin, and Zilong Zhang
How Government Procurement Shapes Corporate Climate Disclosures, Commitments, and Actions , with Omri Even-Tov, Guoman She, and Detian Yang
Best CSR Paper Award, AFAANZ Annual Conference 2024
