The 33th Frontier Forum for Digital Technology and Finance

Abstract：

This paper investigates the effect of literacy and language education (LALE) on the career outcomes of sell-side security analysts. Utilizing a syllabus reform in China that transformed Chinese literacy from a tool for political education into a fundamental means of communication, we employ a difference-in-differences estimation and find that analysts who underwent the reform experience more frequent and faster promotions. Reports by treated analysts exhibit greater lexical and character richness, indicating that LALE contributes to the improvement of writing abilities. The market also responds more strongly to recommendation revisions made by these analysts. Additionally, treated analysts demonstrate a greater willingness to conduct site visits, aligning with the reform’s goal of enhancing social skills and communication abilities. Moreover, analysts from southern Chinese provinces, where local dialects bear less resemblance to Mandarin, experienced a more noticeable effect on their career outcomes due to the reform. Overall, our results shed new light on the unintended consequences of LALE on financial professionals. 

Speaker Introduction:

Hanwen Sun is a tenured associate professor in the Department of Accounting and Finance at the School of Management, University of Bath, UK. Her research interests are concentrated on corporate finance and capital markets, encompassing insider trading, short selling, corporate innovation, and information intermediaries. Her research findings have been published in international journals such as Research Policy, Journal of Corporate Finance, Journal of Empirical Finance, and Journal of Accounting and Public Policy. Her research project on insider trading has received funding from the British Academy and other prestigious institutions.