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Chang Liu
California State University, Sacramento, USA

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Journal article
Published: 16 April 2021 in International Review of Financial Analysis
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We examine whether industry-level short interest predicts industry stock returns and find that the former is negatively associated with the latter. Furthermore, this predictive ability is more pronounced in industries with higher information asymmetry surrounding firms, suggesting that either short sellers' access to private information or their superior information processing skills are important. We also find that this predictive ability is stronger when the short-sale constraint is more binding and when the economic condition is challenging. Overall, our results imply that short sellers' collective activities convey important industry information, leading to predictable and profitable industry portfolios.

ACS Style

Chune Young Chung; Chang Liu; Kainan Wang. The big picture: The industry effect of short interest. International Review of Financial Analysis 2021, 76, 101760 .

AMA Style

Chune Young Chung, Chang Liu, Kainan Wang. The big picture: The industry effect of short interest. International Review of Financial Analysis. 2021; 76 ():101760.

Chicago/Turabian Style

Chune Young Chung; Chang Liu; Kainan Wang. 2021. "The big picture: The industry effect of short interest." International Review of Financial Analysis 76, no. : 101760.

Journal article
Published: 02 January 2021 in Journal of Corporate Finance
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We identify a sample of firms with directors employed by institutional investors and examine the effect of a direct channel of institutional monitoring. Using difference-in-differences tests, we find weak evidence that institutional directors have a positive effect on informational efficiency. More importantly, institutional directors have a significantly positive impact on stock returns over the long run. Further analysis shows that the presence of institutional directors leads to a slight increase of managerial entrenchment. Consistent with the notion that entrenched managers reduce risk-taking, we also find significant decreases in R&D investments and financial leverage, and significant increases in payouts for firms with institutional directors. The findings suggest that aligning with the interest of long-term investors, institutional directors deter firms from pursuing potentially value-decreasing investment projects and influence firms to return value to investors through lower debts and higher payouts, mainly share repurchases.

ACS Style

George J. Jiang; Chang Liu. Getting on board: The monitoring effect of institutional directors. Journal of Corporate Finance 2021, 67, 101865 .

AMA Style

George J. Jiang, Chang Liu. Getting on board: The monitoring effect of institutional directors. Journal of Corporate Finance. 2021; 67 ():101865.

Chicago/Turabian Style

George J. Jiang; Chang Liu. 2021. "Getting on board: The monitoring effect of institutional directors." Journal of Corporate Finance 67, no. : 101865.

Journal article
Published: 24 December 2020 in Economic Modelling
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Although the literature shows that financial inclusion provides rural poor households and businesses with much needed credit to increase income, whether it achieves the goal through improving agricultural productivity remains unclear. This paper constructs a composite index of rural financial inclusion and investigates its effect on agricultural total factor productivity growth in China where a large population depends on limited arable land and thus productivity growth is crucial. Using provincial-level data from 2009 to 2018, we estimate that agricultural total factor productivity grew significantly. Accounting for reverse causality in a dynamic panel model, we find that financial inclusion is a significant driver of this growth and the effect exhibits geographic heterogeneity. Importantly, the effect of financial inclusion on total factor productivity growth occurs as a result of providing loans to support production transformation based on specialization and cooperation. Our results could help other developing countries address similar unbalanced development problems.

ACS Style

Yue Hu; Chang Liu; Jiangang Peng. Financial inclusion and agricultural total factor productivity growth in China. Economic Modelling 2020, 96, 68 -82.

AMA Style

Yue Hu, Chang Liu, Jiangang Peng. Financial inclusion and agricultural total factor productivity growth in China. Economic Modelling. 2020; 96 ():68-82.

Chicago/Turabian Style

Yue Hu; Chang Liu; Jiangang Peng. 2020. "Financial inclusion and agricultural total factor productivity growth in China." Economic Modelling 96, no. : 68-82.

Journal article
Published: 19 November 2019 in Sustainability
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Despite the potential benefits of a firm’s corporate environmental commitment to its information environment, few empirical studies examine the relationship between corporate environmental responsibility (CER) and firm information risk in emerging markets. In such markets, better corporate transparency and less information asymmetry are becoming increasingly important owing to firms’ poor governance structures, the lack of protection for investors, the substantial participation of unsophisticated individual investors, and so on. Using a comprehensive sample of firms engaged in CER for the period from 2005 to 2016, we find that a firm’s CER score has a negative effect on measures of firm information risk in the emerging Korean market, which is characterized by poor corporate governance and a strong influence of owner–managers. Furthermore, our results show that the negative relationship between CER and information risk is more pronounced for firms with higher uncertainty (lower transparency). Thus, we conclude that CER enhances a firm’s information environment by reducing investors’ information risk.

ACS Style

Daeheon Choi; Chune Young Chung; Dongnyoung Kim; Chang Liu. Corporate Environmental Responsibility and Firm Information Risk: Evidence from the Korean Market. Sustainability 2019, 11, 6518 .

AMA Style

Daeheon Choi, Chune Young Chung, Dongnyoung Kim, Chang Liu. Corporate Environmental Responsibility and Firm Information Risk: Evidence from the Korean Market. Sustainability. 2019; 11 (22):6518.

Chicago/Turabian Style

Daeheon Choi; Chune Young Chung; Dongnyoung Kim; Chang Liu. 2019. "Corporate Environmental Responsibility and Firm Information Risk: Evidence from the Korean Market." Sustainability 11, no. 22: 6518.

Letters section
Published: 10 October 2019 in International Review of Finance
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We devise a neoclassical economic model that reveals the underlying motivations for mergers, without resorting to distorted firm decisions or stock market inefficiency. Using empirical analyses to verify the model's predictions, we discover that mergers are more likely in economic booms than in recessions. Furthermore, we assert that a firm with insufficient physical capital is likely a bidder in a merger, whereas a firm with large physical capital is likely a target. Our findings are largely consistent with the waves of mergers during economic booms and the theory on operational synergies.

ACS Style

Chune Young Chung; Seok‐Kyun Hur; Chang Liu. When Is One Plus One More Than Two? Theory and Evidence of Merger Motivations. International Review of Finance 2019, 1 .

AMA Style

Chune Young Chung, Seok‐Kyun Hur, Chang Liu. When Is One Plus One More Than Two? Theory and Evidence of Merger Motivations. International Review of Finance. 2019; ():1.

Chicago/Turabian Style

Chune Young Chung; Seok‐Kyun Hur; Chang Liu. 2019. "When Is One Plus One More Than Two? Theory and Evidence of Merger Motivations." International Review of Finance , no. : 1.

Journal article
Published: 31 October 2018 in Finance Research Letters
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This study investigates whether the effectiveness of institutional monitoring varies with economic conditions in Korea, an emerging market. We analyze the impact of the institutional trading activities on corporate earnings management. In particular, we examine whether the association between the two varies with the economy's expectation of market growth (based on the prevailing expectations before and after the 2008 financial crisis). The results show that firms with a high intensity of institutional investor trading tend to manage their earnings using accruals. In addition, in a market with low growth prospects, less effective institutional monitoring increases the likelihood of opportunistic earnings reporting by management.

ACS Style

Kyung Soon Kim; Chune Young Chung; Chang Liu. Is institutional monitoring time-varying? Evidence from the Korean market. Finance Research Letters 2018, 32, 101029 .

AMA Style

Kyung Soon Kim, Chune Young Chung, Chang Liu. Is institutional monitoring time-varying? Evidence from the Korean market. Finance Research Letters. 2018; 32 ():101029.

Chicago/Turabian Style

Kyung Soon Kim; Chune Young Chung; Chang Liu. 2018. "Is institutional monitoring time-varying? Evidence from the Korean market." Finance Research Letters 32, no. : 101029.