Business Commons^™

State-Contingent Overconfidence : Application To Bank Loans, Sze Nam Chan

Lingnan Theses and Dissertations

Overconfidence (arrogance or overestimation of one’s ability) has often been viewed in the finance literature as a character trait that is stable over time. This paper, however, provides a first attempt to show that overconfidence can be state-contingent, that is, the level of overconfidence among overconfident individuals could be influenced by an external shock such as a financial crisis and a change in regulation, for example, the adoption of Sarbanes-Oxley Act (SOX). Both our experimental (based on psychological approach on over-precision) and empirical results using more than 4500 manager-year observations through controlling different personal and firm characteristics show that individual …

The Value-Relevance Of Asset Write-Down Regulations In China : The Roles Of Information Relevance And Measurement Reliability, Ziyun Yang

Lingnan Theses and Dissertations

At the end of the 20th century and beginning of the 21st century, China implemented several new asset write-down regulations. This study addresses the claim that these regulations significantly enhanced the usefulness of financial statements for investors in China. The effect of the regulations on usefulness of financial statements has implications for financial accountants, standard-setters, educators, and auditors. This study derives and tests some of the empirical implications of the claim.

I operationalize usefulness of accounting information in terms of the valuerelevance framework, in which information usefulness is construed as a tradeoff between relevance and reliability. These two dimensions are …