Areas of Expertise (4)
Shuping Chen is a Professor in the Department of Accounting at the McCombs School of Business at The University of Texas at Austin. Before coming to McCombs Chen was an Assistant Professor at the University of Washington.
University of Southern California: Ph.D., Accounting 2003
Media Appearances (4)
Researchers Identify A Way To Foretell A Company's Stock Decline
Business Insider online
The study's authors analyzed about 50,000 earnings calls from 2002 to 2012, focusing on the nearly 9,500 that received little feedback during the open question-and-answer session of the call. The companies' negative returns lasted for five days after such calls, performing up to 135 basis points worse than companies comparable in size and analyst coverage in which the conference call was a bit more lively. "When you do not interact, the unintended economic consequences are going to catch up with you," said Shuping Chen, associate professor at the university's McCombs School of Business and lead author of the study.
The Price of Silence on Earnings Calls
When executives receive zero or few questions during the Q&A portion of an earnings call, the company can expect “more negative market reactions” in the next five days than companies of comparable size and analyst coverage that have more lively interactions during calls, researchers from the University of Texas at Austin and Tilburg University found. “Our results identify statistically and economically significant indirect costs to calls lacking interaction between managers and analysts,” said authors Shuping Chen, Stephan Hollander and Kelvin Law.
Shares of silence: Stocks drop after quiet conference calls, UT study says
Austin Business Journal online
The study, led by McCombs Associate Professor Shuping Chen, tallied the number of questions lobbed during almost 50,000 earnings conference calls. Of this, 9,434 were found to have no questions asked or answered during the calls. Those companies then saw their stock prices drop precipitously afterward, resulting in a decrease in market capitalization of between $4.3 million to $6.1 million.
How to Win Investors Over
Harvard Business Review online
We compared them with 680 companies that maintained quarterly guidance during the same period. The companies that stopped saw analysts’ coverage decrease—an undesirable result. No wonder, then, that the accounting researchers Shuping Chen, Dawn Matsumoto, and Shiva Rajgopal—focusing on companies that, from 2002 to 2006, publicly announced decisions to stop giving quarterly guidance—recorded a mean 5% stock price drop upon the announcement.
Listing of top scholarly works by Shuping Chen.
We find evidence that performance-reflected in earnings and cash flows-is transferred from targets to acquirers around acquisitions. Using a sample of 2128 completed deals from 1985 to 2010, our results suggest that targets depress performance when investor attention declines once the deal parameters are set, and much of that performance understatement is transferred to boost post-acquisition acquirer performance. We contribute to the earnings management literature by showing that earnings and cash flows are transferred not just within firms but also across firms, and to the mergers and acquisitions literature by documenting that performance is managed not only before but also after deals are announced.
We construct a new, parsimonious, measure of disclosure quality-- disaggregation quality (DQ)--and offer validation tests.
We investigate the impact of founding family ownership on accounting conservatism. Family ownership is characterized by large, under-diversified equity stake and long investment horizon. These features give family owners both the incentives and the ability to implement conservative financial reporting to reduce legal liability and mitigate agency conflicts with other stakeholders. Our findings are consistent with the recent evidence in the family-firm literature that founding families exhibit substantial incentives to reduce agency and litigation costs and to maximise firm value.
Our findings hold using both abnormal accruals and discretionary revenues to measure earnings management and after controlling for potential reverse causality concerns.
We investigate firms that stop providing earnings guidance (“stoppers”) either by publicly announcing their decision (“announcers”) or doing so quietly (“quiet stoppers”). Relative to firms that continue guiding, stoppers have poorer prior performance, more uncertain ...
Taxes represent a significant cost to the firm and shareholders, and it is generally expected that shareholders prefer tax aggressiveness. However, this argument ignores potential non-tax costs that can accompany tax aggressiveness, especially those arising from agency ...
We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners ...
This study examines recent regulatory and practitioner concerns that managers provide more (less) information to analysts with more (less) favorable stock recommendations. We examine the relative forecast accuracy of analysts before and after ...
We investigate a pervasive voluntary disclosure practice—managers including balance sheets with quarterly earnings announcements. Consistent with expectations, we find that managers voluntarily disclose balance sheets when current earnings are relatively less ...
Finally, we find a significant market reaction to analysts' cash flow forecast revisions, suggesting that investors find these revisions informative. Collectively, our findings demonstrate that analysts' cash flow forecasts are not simply naïve extensions of their own earnings forecasts, but that they reflect meaningful and useful accrual adjustments.