Lydia Wang

Lydia Wang
PhD Student, Accounting
PhD Program Office Graduate School of Business Stanford University 655 Knight Way Stanford, CA 94305

Lydia Wang

I am a 5th year Ph.D. Candidate in Accounting at the Stanford Graduate School of Business. I am on the job market in 2024-2025.

I am interested in the economics of accounting and other information in the digital economy. In particular, I am interested in how unique features of the digital economy challenge or complement existing theories and evidence regarding strategic decision making, such as in the areas of M&A, executive compensation, and non-financial information.

Prior to my Ph.D. at Stanford, I received an A.B. in Applied Mathematics with a focus in Economics from Harvard College. I was born in California and grew up in Michigan.

Job Market Paper

How Do Data Affect Firms’ Innovation Strategies: Evidence From the General Data Protection Regulation
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I examine how firms’ customer data availability influences their managers’ innovation resource allocation between exploitative (incremental) and exploratory (radical) innovation. I use the European Union (EU) General Data Protection Regulation (GDPR) as a plausibly exogenous shock to customer data availability in estimating a difference-in-differences specification. I employ a patent-based innovation output measure and develop and test a novel innovation input workforce-based measure. I find that, upon a negative shock to customer personal data availability, firms allocate more innovation resources to exploration relative to exploitation. The results are stronger for firms in B2C versus B2B industries and firms with more volatile customer demand. My results suggest that higher customer data availability leads firms to focus more on exploitative innovation, deterring the exploratory innovation crucial to economic growth.

Working Papers

Deal or No Deal: M&A, CEOs and the Culture of Honor in the U.S. South
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(Co-authored with Ron Kasznik and Ido Spector. Revise and resubmit at Journal of Accounting and Economics.) We investigate whether CEOs’ adherence to cultural norms that enshrine the protection of honor is associated with lower receptiveness of their companies to being acquired. Our investigation is motivated by anthropology and social psychology research showing that people who grew up in cultures of honor feel obliged to retaliate whenever their status and property are threatened. We find target companies with CEOs who grew up in states with a culture of honor are less likely to be acquired than those with CEOs from non-honor states. Among target CEOs from honor states, those who grew up in rural counties, where honor norms have been more likely to persist, are even less receptive to M&A. Our findings continue to hold in a within-target analysis that focuses on targets with both withdrawn and completed deals but under different CEOs. The association between adherence to honor and lower receptiveness to being acquired is especially pronounced for founder CEOs, who presumably have greater power over their firms’ M&A decisions. Using a probabilistic measure based on merger arbitrage spreads, we find targets’ share prices reflect a lower implied probability of deal completion if their CEO is from an honor state. Finally, we find that target CEOs’ ethnic origin neither confounds nor mediates the association, suggesting regional norms, rather than ethnicity, shape the adherence to honor in our setting. Collectively, our findings offer a new perspective on the role CEOs’ cultural norms play in explaining corporate financial and investment choices.

Financial and Non-financial Management Guidance
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(Co-authored with Brandon Gipper and Shawn Kim.) We examine whether firms that provide (more accurate) financial guidance are more likely to provide (more accurate) non-financial guidance. In particular, we examine forward-looking information about firms’ revenue targets and emission reduction plans. We show a positive association between the provision of financial and non-financial guidance and between the accuracy of the two. Firms that are (i) less financially constrained, (ii) have climate-related manager incentives, (iii) hear from analysts about and discuss environmental issues on conference calls, and (iv) seek assurance on their reported emissions, are more likely to provide forward-looking emission information when providing revenue targets. Some results do not hold for emission intensity targets, indicating some meaningful difference between intensity and absolute emission plans. Our results shed light on demand for firms to voluntarily and accurately disclose non-financial information, and they suggest a complementarity between financial and non-financial guidance, especially among firms that are serious about emissions or face greater emissions-related risks.

Work in Progress

Bank Executive Compensation Regulation: A Survey Paper

Co-authored with Chris Armstrong, Hamid Mehran, and Rahul Vashishtha

Venture Capital Contracting

Co-authored with Chris Armstrong and Lingyu Gu