Jiewei Yu

Interests

Teaching

Financial Statement Analysis, Intermediate Accounting II, Managerial Accounting

Research

Debt Contracting, Information Intermediaries, Economic Effects of Financial Reporting

Courses

Scholarly Contributions

Journals/Publications

• Bhattacharya, N., Saito, Y., Venkataraman, R., & Jiewei Yu, J. (2024). R&D Reporting Rule and Firm Efficiency. Journal of Accounting, Auditing and Finance, 39(2). doi:10.1177/0148558X211058091
  More info

  Critics opine that full expensing of research and development (R&D) depresses near-term profits and incentivizes myopic managers to under-invest in R&D, compromising firm efficiency. Advocates of the expensing rule argue that little rigorous research evidence supports the claimed adverse consequences. We examine the impact of the R&D expensing rule on firm efficiency by exploiting an exogenous shock: a shift in the accounting regime in Germany from full expensing to partial capitalization of R&D when it mandated International Financial Reporting Standard (IFRS) adoption in 2005. We employ Stochastic Frontier Analysis and Data Envelopment Analysis to estimate efficiency for the same German firms before and after the IFRS adoption. We find robust evidence of efficiency improvement in the post-period relative to the pre-period for German R&D firms that report R&D expenditures, and for both early adopters and timely adopters. We also document that financially constrained firms and firms experiencing rapid R&D growth prior to the IFRS adoption show greater efficiency improvement. Moreover, we conduct three falsification tests to make sure our results are not attributable to other accounting changes associated with the IFRS adoption, and find no efficiency improvement for the three control groups (German “no-R&D” sample, U.K. firms, and Australian firms), respectively. We conclude that the change in the R&D reporting rule is the likely catalyst for improvements in efficiency of German R&D firms.
• Yu, J., Bhattacharya, N., Saito, Y., & Venkataraman, R. (2024).

  R&D Reporting Rule and Firm Efficiency

  . Journal of Accounting, Auditing and Finance. doi:https://doi.org/10.1177/0148558X211058091
• Yu, J., Black, B., Desai, H., Litvak, K., & Yoo, W. (2024). The SEC's Short-Sale Experiment: Evidence on Causal Channels and Reassessment of Indirect Effects. Management Science, 70(8). doi:https://doi.org/10.1287/mnsc.2023.4918
• Bhattacharya, N., Sulaeman, J., & Yu, J. (2020). DO CONGLOMERATES OPERATE MORE EFFICIENTLY THAN SINGLE-SEGMENT FIRMS?. The Singapore Economic Review, 65(5). doi:10.1142/S0217590819400046
  More info

  We investigate the impact of organizational form on operational efficiency using a large sample covering manufacturing and non-manufacturing sectors in the United States over 30 years. We quantify operational efficiency using various measures, and find robust evidence that segments of diversified firms are operationally more efficient than their single-segment industry peers. The difference is more noticeable in industries where financing needs are high due to greater growth potential and where access to external markets is constrained due to higher information asymmetry.
• Yu, J., Bhattacharya, N., & Sulaeman, J. (2020). Do Conglomerates Operate More Efficiently than Single-Segment Firms?. The Singapore Economic Review.
• Desai, H., Rajgopal, S., & Yu, J. J. (2016). Were Information Intermediaries Sensitive to the Financial Statement-Based Leading Indicators of Bank Distress Prior to the Financial Crisis?. CONTEMPORARY ACCOUNTING RESEARCH, 33(2), 576-606.
• Beatty, A., Liao, S., & Yu, J. J. (2013). The spillover effect of fraudulent financial reporting on peer firms' investments. JOURNAL OF ACCOUNTING & ECONOMICS, 55(2-3), 183-205.
• Hirshleifer, D., Teoh, S. H., & Yu, J. J. (2011). Short Arbitrage, Return Asymmetry, and the Accrual Anomaly. REVIEW OF FINANCIAL STUDIES, 24(7), 2429-2461.
• Hirshleifer, D., Teoh, S. H., & Yu, J. J. (2011). Short arbitrage, return asymmetry, and the accrual anomaly. Review of Financial Studies, 24(Issue 7). doi:10.1093/rfs/hhr012
  More info

  We find a positive association between short selling and accruals during 1988-2009, and that asymmetry between the up- and downsides of the accrual anomaly is stronger when constraints on short arbitrage are more severe (low availability of loanable shares as proxied by institutional holdings). Short arbitrage occurs primarily among firms in the top accrual decile. Asymmetry is present only on NASDAQ. Thus, there is short arbitrage of the accrual anomaly, but short-sale constraints limit its effectiveness. © 2011 The Author. Published by Oxford University Press on behalf of the Centre for Crime and Justice Studies (ISTD). All rights reserved.
• Beatty, A., Weber, J., & Yu, J. J. (2008). Conservatism and debt. JOURNAL OF ACCOUNTING & ECONOMICS, 45(2-3), 154-174.

Proceedings Publications

• Zhou, J. Q., Anand, J., & Yu, J. J. (2007). Information asymmetry in international acquisitions: The role of information institutions. In 67th Annual Meeting of the Academy of Management, AOM 2007.
  More info

  Drawing on the information asymmetry theory (Akerlof, 1970) and new institutional economics (North, 1990), we argue that a host countrys information institutions, defined as the rules governing corporate disclosure, have a significant impact on the cost of information in international acquisitions, and that high information asymmetry leads to potential adverse selection problems and hurts the acquirers market performance. Our empirical results show that the capital market reacts negatively to institution-based information asymmetry in international acquisitions. This negative reaction is more significant for inexperienced acquirers and firms making unrelated acquisitions. In addition, when information institutions are poor, firms choosing partial acquisitions perform better than those choosing full acquisitions. Overall, this study contributes to the information asymmetry theory by bridging macro institutional contexts with micro firm- and transaction-level factors, thus providing a more comprehensive analysis for the information problems involved in international acquisitions.