Accounting and Finance Department Research Seminar
https://umassd.zoom.us/j/4387551509?pwd=bVB2QzdtRmFCdkk1WTVQSUxHMS9iQT09&omn=92819407264
Hongkang Xu
5089999187
hxu5@umassd.edu
The Department of Accounting & Finance announces the following research seminar.
Speaker: Dmitri Byzalov (Temple University)
Title: Fixed-effect controls for slope-based constructs
Date: Friday, October 30, 2026
Time: 9:30 -10:45 AM
Location: via Zoom Meeting
Meeting ID: 438 755 1509
Abstract: Fixed-effects designs are pervasive in modern research. Researchers often apply them “as is” to slope-based accounting constructs (e.g., earnings response coefficient, which is the slope of Y = abnormal returns with respect to X = earnings surprise, asymmetric timeliness, or cost elasticity). However, fixed effects are insufficient in such settings because they capture variation in Y, not variation in the focal slope dY/dX. Several recent articles point this out and add group-level and time-specific slopes for the construct. However, subsequent research mostly ignores this solution. We explain how this neglect distorts inferences and undermines the logic of designs like difference-in-differences. We further show that simple solutions using aggregate state- or industry-level slopes are insufficient. They can cause major biases even when the treatment affects all firms equally in the focal states or industries. We examine alternative solutions and their potential pitfalls. Our adjustments change published findings.
For additional information, please contact Prof. Hongkang Xu at hxu5@umassd.edu.