The 3rd Prairie Finance Conference 2025

Conference Schedule

9:00 am - 4:00 pm

Session 1    

Chair: Craig Wilson (University of Saskatchewan)                                     

• 9:10 - 9:45 am: Qiongfang Lu, Min Maung, and Craig Wilson
  After the Overturn of the Roe v. Wade Case: How Abortion Affects Board Gender Diversity and Financial Performance of Companies in United States   
• 9:45 - 10:20 am: Xin Yu (U of Queensland), Jeffrey S. Harrison (U of Richmond), Shijun Guo (Chongqing U), Zhou Zhang (U of Regina)
  How Controlling Firms in Business Groups Manage Investments in Corporate Responsibility to Reduce Risk Exposure While Still Enjoying the Benefits
  
  
• 10:20 - 10:35 pm:  Break

Session 2    

Chair: Arturo Rubalcava (University of Regina)

• 10:35 - 11:10 am: Tarek Jareski Tuma, Abdullah Mamun, Enchuan Shao
  Deposit Insurance Reforms and Depositor Market Discipline: The case of US Banking Industry
• 11:10 – 11:45 pm: Rokiya B. Rahman and George F. Tannous
  Innovation Metrics and Performance: A Dual Perspective on Short-run and Long-run Performance
  
  
• 11:45 - 1:00 pm: Lunch

Session 3

Chair: Min Maung (University of Saskatchewan)

• 1:00 – 1:35 pm: Arturo Rubalcava
  Issue Costs on Private Equity Offerings by Canadian Public Companies: A Comparison Between Bought Deals and Marketed Best Efforts
• 1:35 - 2:10 pm: Abdullah Mamun
  Effect of income diversification on Canadian credit union performance, evidence from long panel         
  
  
• 2:10 - 2:25 pm: Break

Session 4

Chair: Joe Zhang (University of Regina)

• 2:25 - 3:00 pm: Tam Tran
  CEO Overconfidence and Firm-Level Total Factor Productivity
• 3:00 – 3:35 pm: Linlin Jin (U of Manitoba), Gady Jacoby (U of British Columbia), Zhenyu Wu (U of Manitoba)
  The Impact of Perceived CEO Authenticity on Stock Performance and Risk Perception During Earnings Calls

Abstracts

After the Overturn of the Roe v. Wade Case: How Abortion Affects Board Gender Diversity and Financial Performance of Companies in United States

Qiongfang Lu, Min Maung, and Craig Wilson
Following the 2022 overturning of Roe v. Wade, this study provides the first empirical evidence of how state-level abortion policy environments affect corporate board gender diversity and firm performance. Using a comprehensive 14-year tracking index of abortion policies across U.S. states and a sample of 27,751 firm-year observations, we find evidence that supportive abortion policies positively and significantly affect both board gender diversity and financial performance. This study empirically establishes that the overturning of Roe v. Wade has had a negative impact on U.S. companies. Importantly, the findings reveal that firms with gender-balanced boards exhibit notable resilience in financial performance during the post-Roe era, underscoring the crucial role of board diversity in fostering firm adaptability and value protection amidst major socio-political shifts. Overall, this study demonstrate that reproductive policy uncertainty creates tangible costs for corporate America and highlight the strategic value of board diversity as a risk management tool.
Key words: Abortion, Board Gender Diversity, Roe v. Wade, Blau Index, Shannon Index

How Controlling Firms in Business Groups Manage Investments in Corporate Responsibility to Reduce Risk Exposure While Still Enjoying the Benefits

Xin Yu (U of Queensland), Jeffrey S. Harrison (U of Richmond), Shijun Guo (Chongqing U), Zhou Zhang (U of Regina)
This study explores how controlling owners in business groups strategically manage corporate social responsibility (CSR) investments across affiliated firms. We find that CSR performance of affiliated firms is negatively associated with the cash flow rights of controlling owners, suggesting that they allocate CSR investments to firms where they bear lower financial burdens while leveraging enhanced group-level reputation to benefit firms where their financial stakes are higher. Furthermore, we show that both director interlocks across member firms in a business group and stronger control rights (especially when exceeding 50%) strengthen this negative relationship, whereas greater media attention weakens this relationship. These governance mechanisms enable controlling owners to allocate CSR investments in ways that enhance their private benefits while facing fewer constraints from other stakeholders.

Deposit Insurance Reforms and Depositor Market Discipline: The case of US Banking Industry

Tarek Jareski Tuma, Abdullah Mamun,  Enchuan Shao (U of Saskatchewan) 
The increase in deposit insurance after the Dodd-Frank Wall Street Reform and Consumer Protection Act has permanently changed the funding structure of banks. By protecting previously uninsured depositors, the regulators removed any incentive those clients had to monitor banks’ risk-taking. This paper provides an in-depth anal- ysis of the consequences of the insurance scheme reform on market discipline by de- positors in the United States. The presence of depositor discipline was proxied by the behaviour of uninsured deposits as a function of multiple banks’ fundamentals: the CAMEL ratios, z-score and asset growth. We also analyzed if depositors penalized larger banks less than smaller ones, which could lead to Too-Big-To-Fail. The results showed considerable evidence of market discipline by depositors before the insurance increase, especially regarding equity ratio and non-performing loans. After the insur- ance increase and regulatory changes after the Global Financial Crisis, there is evidence that depositors tolerate a higher risk level from banks and size became irrelevant for market discipline. While the funding structures across sizes are very different, most evidence of Too-Big-To-Fail appears to be limited especially before 2010.

Innovation Metrics and Performance: A Dual Perspective on Short-run and Long-run Performance

Rokiya B. Rahman and George F. Tannous
This research links concepts from previous literature on the role of innovation in a firm’s overall performance to address the question: Does consistent innovation reward firms with higher profitability and shareholders with higher returns? We analyze the accounting performance in the short run, quantified by the ratio of earnings before interest and tax (EBIT) to total assets, and the market performance in the long run, assessed through the holding period returns over an extended investment horizon. The analysis is based on a sample comprising all firms listed among “Top 300 Organizations Granted U.S. Patents” published by the Intellectual Property Owners’ Association. We find that moderate innovation consistency leads to superior profitability. We also see a positive and significant relationship between patent count and operating profitability in the short run. However, higher patent quality is linked to lower short-term profits, suggesting that higher-quality patents may not translate into immediate financial gains. Our analysis of long-run market performance provides evidence that the stock market values patent quality more compared to the firm's number of patents.

Issue Costs on Private Equity Offerings by Canadian Public Companies: A Comparison Between Bought Deals and Marketed Best Efforts

Arturo Rubalcava
This study examines the difference in issue costs -placement fees and price discount- and their determinants of two methods of choice for private investments in public equity (PIPE) by Canadian listed companies. These methods are bought deals (BDs) and marketed best efforts (MBEs). The issue costs are not trivial for companies when issuing private equity to accredited investors. This study tries to answer four important questions. (1) Are issue costs different between BDs and MBEs? (2) What are their determinants? (3) Are there common determinants across both methods? Did the financial crisis years (2007, 2008, and 2009) and COVID-19 years (2020-21) influenced issue costs? Findings show no significant difference in issue costs between BDs and MBEs. Two common determinants of placement and underwriting fees for BDs and MBEs are natural log of offer gross proceeds - a proxy for economies of scale; the other is capital investments as intended use of funds. Regarding price discount, the determinants are specific to the method of choice by the issuing firm. On the other hand, the financial crisis years and COVID-19 period did not have any effect on issue costs. From the findings this study recommends actions for decreasing issue costs. Title: How Controlling Firms in Business Groups Manage Investments in Corporate Responsibility to Reduce Risk Exposure While Still Enjoying the Benefits

Effect of income diversification on Canadian credit union performance, evidence from long panel

Abdullah Mamun
We investigate the impact of income diversification on the performance of the largest Canadian CUs using a long panel from 2004 to 2019. We find that non-interest income enhances the performance of credit unions, both on risk unadjusted and risk adjusted basis. This result is robust to alternative measures of performance and even when we address endogeneity and persistence of the performance measure using the dynamic panel method. We find that income diversification enhances performance more for larger credit unions compared to smaller credit unions. During the financial crisis period, we find that on average all CUs performance were affected. But for larger CUs higher share of non-interest income has a 50% less detrimental effect on performance compared to smaller CUs.

CEO Overconfidence and Firm-Level Total Factor Productivity

Tam Tran
I discuss a model to explain how CEO overconfidence might affect the firm productivity. The model shows that overconfident managers have stronger beliefs about their firms’ prospects, inducing them to exert higher efforts. This, in turn, increases the probability that the firms’ projects can be successful and consequently boosts the firm productivity. The prediction of the model is validated by empirical evidence. I use a sample of S&P 1,500 companies from 1992 to 2023 and follow the literature to measure the productivity at the firm level and managerial overconfidence. The empirical results support the model prediction. The results are robust across different model specifications, firm-fixed effects and within firm analysis.
Keywords: CEO overconfidence; Firm-level total factor productivity; Career concern model.

The Impact of Perceived CEO Authenticity on Stock Performance and Risk Perception During Earnings Calls

Linlin Jin
This paper applies audio analysis to examine the impact of CEO excitement on market reactions  and risk perception during earnings conference calls. Using Layered Voice Analysis (LVA) to  capture vocal cues, we quantify CEO excitement and distinguish between authentic and inauthentic  emotional expressions. We explore how these expressions influence short- and long-term stock  performance and implied volatility. Our results show that authentic excitement is associated with  positive stock returns and reduced risk perception, while inauthentic excitement leads to increased  market volatility and skepticism. These findings contribute to the literature on non-verbal cues in  financial communication, offering new insights into the role of CEO emotion in shaping investor  behavior and firm risk profiles.