Conference Agenda

Drawing on agency theory, accounting and finance research has prominently adopted a theoretical construct of diversity that splits board members into directors of interest (case directors) and others (base directors). We refer to this construct as asymmetry. In contrast, management literature has embraced variety as a theoretical construct that is aligned with resource dependence theory and is not biased towards one category of directors over another. This paper contrasts the two constructs and builds on the social justice perspective to introduce balance as a third construct. It then develops three sets of criteria to assess how well current empirical proxies map onto each of the three constructs. The assessment reveals that the best available measures for asymmetry, variety, and balance are the proportion of case directors, Adjusted Blau Index, and proportional balance, respectively. Using a large sample of UK boards, we find that these measures are empirically different. The paper also provides some guidelines for future research on board diversity.

Using a panel of 2,782 Chinese listed firms from 2001 to 2022, we conduct a text-mining techniques analysis to develop a digitalization index and identify that digitalization can mitigate earnings management. We employ an instrumental variable (IV) method to confirm the causal effect of digitalization on earnings management. Additional tests are performed to enhance the robustness of our findings. Furthermore, we discover that the mitigating effect of digitalization on earnings management is eliminated by financial constraints. This moderating effect of financial constraints is more pronounced in state-owned enterprises (SOEs) than in non-state-owned enterprises (non-SOEs). Our study contributes to the literature on digitalization and earnings management and sheds light on the related implications.

This paper studies how data interoperability — third-party direct access to customers’ financial information — affects competition and welfare in the finance sector. Our model reveals a trade-off: while sharing customer data improves competition in information intensive services like credit, it may increase prices of data-generating services like payments. We show that targeted data-sharing regimes (e.g., Open Banking) preserve the ability of banks to extract surplus by shifting market power from credit to payment markets. Although some firms benefit in aggregate from increased competition, others are left worse off by changes in prices. Wider-reaching data-sharing initiatives (e.g., Open Finance) further level the playing field and diminish banks’ capacity to monetize their data, reallocating surplus toward firms and alternative lenders. Our findings underscore the need to account for cross-market spillovers when designing policies that regulate access to financial data.