Time: 15:00-16:30, Tuesday, November 3, 2026

Venue: Guoshun Campus, Room 603, Starr Building

Speaker: Associate Professor Tao Chen, Nanyang Technological University (NTU)

Moderator: Prof. Xintong Zhan, Department of Finance, School of Management, Fudan University

Topic: The Social Cost of Corporate Short-Term Incentives: Evidence from Product Quality Failures

Abstract: We examine whether short-term financial incentives compromise product quality and harm consumers. Using a regression discontinuity design around analyst earnings-per-share forecasts, we find that firms induced to repurchase shares to meet earnings targets experience significantly more subsequent product recalls, particularly recalls involving consumer injuries. These firms also experience more negative product-related incidents, and these incidents are more severe. The increase in recalls extends to products manufactured after the repurchase, and additional evidence suggests that firms reallocate resources away from production and quality-related activities. Our findings show that the costs of managerial short-termism extend beyond shareholders to external stakeholders, particularly consumers.

Bio: Professor Tao (Jonas) Chen is a Provost's Chair Professor in Finance and an Associate Professor at Nanyang Business School, Nanyang Technological University (NTU), Singapore. He is the Academic Director of the MSc in Finance program and the Coordinator of the PhD in Finance program. His research focuses on sustainable finance, FinTech, and artificial intelligence in finance. His work has appeared in journals including the Journal of Financial Economics, Management Science, the Journal of Financial and Quantitative Analysis, the Review of Finance, and Nature Climate Change. He has published six papers in UTD24 journals and ten papers in FT50 journals. His work has received more than 5,500 citations on Google Scholar, and Stanford University and Elsevier have named him among the world's top 2% of scientists. Professor Chen is an ABFER Fellow, a NISTH Societal Impact Fellow, and a Teaching Excellence Academy (TEA) Fellow. He serves as an Associate Editor of Financial Management, the Journal of Business Research, and The British Accounting Review, and as a Guest Editor of the Pacific-Basin Finance Journal. He is also Vice President of the Asian Finance Association and has received numerous research, teaching, and industry awards.