Speaker: Associate Professor Jiang Wenxi (Department of Finance, Chinese University of Hong Kong)

Host: Assistant Professor Yang Cheng(Li Anmin Institute of Economics, Liaoning University)

Guest introduction: Assistant Professor Liu Renliang(Li Anmin Institute of Economics, Liaoning University)

Time: July 5, 2024 (Friday) 10:00-11:30 (Beijing time)

Location: Conference Room, 1st Floor, Wuzhou Park, Chongshan Campus, Liaoning University

Online Venue: Tencent Meeting:608-255-257

Language: Chinese

Abstract:

We address the puzzling finding by Carpenter, Lu, and Whitelaw (2021) that stock prices in the Chinese A-share market are as informative about future earnings as those in the U.S. market. Contrary to their interpretation, we argue that, in the presence of prevalent earnings management and less sophisticated investors, firms may manage earnings to align with expectations reflected in their stock valuations. Our analysis reveals that Chinese stocks with higher valuations tend to exhibit higher earnings in the subsequent three years, but this does not translate to increased payouts to shareholders and the higher earnings reverse in the long run. Additionally, we provide evidence of earnings management through non-recurring gains and losses (NRGL), leveraging the 20192020 reform on delisting rules as an exogenous shock to earnings management practices.

Introduction to the speaker:

Professor Jiang Wenxi graduated from the Yale School of Management in the United States with a Ph.D. in financial economics. He is currently an associate professor (tenured) in the Department of Finance at the Chinese University of Hong Kong. His main research areas include behavioral finance, institutional investors and Chinese financial markets; in recent years, he has also been involved in interdisciplinary research on climate change and financial markets. Many research results have been published in top international academic journals in economics and finance, such as the Journal of Econometrics, the Journal of Finance and the Review of Financial Studies. He has been invited to give speeches at various academic institutions and financial industry conferences many times, and has won the Best Paper Award at the China International Conference on Finance (CICF). He has also been invited to participate in a number of key policy research projects of the government and official think tanks; in 2023, he was invited to visit the Baker-Friedman Center for Economic Research at the University of Chicago and the Hong Kong Monetary and Financial Research Center of the Hong Kong Monetary Authority. He participated in the writing of some chapters of the "Handbook of China's Financial System" (published by Princeton University Press in 2020). Professor Jiang Wenxi teaches courses such as "Financial Markets", "China's Financial System", and "China's Economy and Finance" for undergraduate, postgraduate, financial MBA, EMBA, EMPAcc, DBA and other programs at the Chinese University of Hong Kong. He won the CUHK Business School Teaching Excellence Award for 2017-18 and 2022-23 and the CUHK President's Exemplary Teaching Award.