Sanjay Banerjee, PhD, MBA, BTech.

Area of Study / Keywords

Financial disclosure; Security analysts; Climate risk; Accounting theory

About

I am a professor of accounting at the Alberta School of Business, and teach managerial accounting. I study financial disclosure, accounting regulations, and sustainability using information economics, cognitive science and accounting theory. I use complementary research methodologies including analytical modeling, laboratory experiments, and archival methods. My research has been published in the Journal of Accounting Research, Management Science, Journal of Economic Behavior & Organization, Organization Science, and funded by Social Sciences and Humanities Council (SSHRC), Government of Canada. I am a member of the Canadian Sustainable Finance Network (CSFN) and European Corporate Governance Institute (ECGI).

Before becoming a professor, I spent eight years in industry. I graduated from the Indian Institute of Technology (I.I.T.), Kharagpur (BTech), XLRI Xavier School of Management, India (MBA), and the University of Minnesota (PhD).

Research

SELECTED PUBLICATIONS

1) Banerjee, S., H. Que, and R. Zhao. 2022. Clarity trumps content: An experiment on information acquisition in beauty contests. Journal of Economic Behavior & Organization. 145, 381-407. 

      When investors can access multiple information sources (e.g., firm disclosures, analyst reports, news and social media), strong coordination (beauty contest) incentives can lead them to ignore a firm disclosure if it is not sufficiently clear. Instead, investors may focus on information sources with high clarity but low content such as rumors and even fake news.

2) Banerjee, S. 2021. Does competition improve analysts' forecast informativeness? Management Science. 67(5), 3219-3238. 

     Not always. Competition for higher rankings in forecast accuracy can reduce the informativeness of analyst forecasts. More intense competition can make forecasts less informative. 

3) Banerjee, S., and M. Maier. 2016. Public information precision and coordination failure: An experiment. Journal of Accounting Research. 54(4), 941-985. 

     Greater transparency can lead to inferior economic outcomes such as coordination failures (bank runs) when public information is pessimistic. As such, a coarser, aggregated disclosure can be better (than a granular, dis-aggregated disclosure) in reducing coordination failures.

4) Zaheer, A., E. Hernandez, and S. Banerjee. 2010. Prior alliances with targets and acquisition performance in knowledge-intensive industries. Organization Science. 21(5), 1072 - 1091. 

       Prior alliances with a target company can improve the performance of an acquiring company when there is a large information asymmetry between the target and the acquirer (as in knowledge-intensive industries such as biotech and software).

5) Forbes, D. P., Manrakhan, S., & Banerjee, S. (2004). Strategic responses to an environmental jolt: Executive turnover in Internet IPOs. The Journal of Private Equity, 63-69.   

   We develop a model that predicts the likelihood that publicly-traded start-up firms will respond to a sudden drop in environmental munificence by replacing their CEO. The model proposes that CEOs who were founders, those who had prior experience as CEOs, and those who also held the position of board chair will be less likely to be replaced. 

WORKING PAPERS

6) Voluntary climate disclosures: A tale of two venues (with A. Chen, M. Li, V. Mehrotra, and R. Vijayaraghavan).

        Companies strategically choose their disclosure venues for their voluntary climate disclosures. Companies with large carbon footprints and high exposure to climate risk are more likely to make voluntary climate disclosure in CSR (corporate social responsibility) reports than to the CDP (formerly, Carbon Disclosure Project), plausibly because these companies want to avoid greater scrutiny on the CDP about of their higher climate risk.

7) Information acquisition and disclosure in forecasting contests (with E. Einhorn and N. Langberg).

     In a forecasting contest, in which financial analysts strategically acquire and disclose information, sufficiently high rewards can (i) induce analysts to make untruthful forecasts; (ii) discourage weaker analysts' information production; and (iii) reduce the price efficiency of analyst forecasts.

8) Clear and liquid: The interaction of firm disclosure and trader competition (with Efstathios Avdis).

     Accuracy of disclosure (i.e., how accurately a disclosure reports a company's future value) and clarity of disclosure (i.e., how well traders understand the disclosed information) have qualitatively different effects on trading in financial markets. Low-clarity disclosure can reduce a company's market liquidity and trading volume.

Teaching

ACCTG 426 - Management Control Systems

Current research and cases in accounting and control with a particular focus on strategy, governance and control processes in modern organizations. Topics include: control system design (including governance and audit), responsibility accounting, performance management, and strategic management accounting. Prerequisite: ACCTG 424. Open only to fourth year Business students, or by consent of Department Chair.

ACCTG 523 - Accounting Information and Internal Decision Making

Accounting concepts used by managers in planning and decision-making. The course introduces concepts of cost and profit behavior, contribution margin, and activity-based costing, as well as relevant costs and revenues for production, marketing and capital budgeting decisions. The course also introduces students to the management planning and control system and its components - budgets, variance analysis, performance evaluation in centralized and decentralized organizations, and management compensation plans. The importance of designing a system to fit the organizations' strategy is emphasized. Prerequisite: ACCTG 501.

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