Why do seemingly similar firms show such different productivity? We argue that unresolved measurement problems, i.e., the persistent incongruity between economic transactions and their accounting representation, affect resource allocation. Our metric quantifies technical accounting terminology in firm disclosures to capture these unresolved measurement problems, UMPs, using over 90,000 10-Ks. A one standard deviation increase in UMP is associated with lower capital investment (6 percent), R&D (5 percent), and hiring growth (30 percent). We also find a reduction in total factor productivity (5 percent) and Tobin’s q (4 percent). Further, CEO compensation sensitivity to accounting performance decreases with UMP, whereas stock-based sensitivity remains unaffected. Our inferences continue to hold when we use a Bartik instrument, which exploits differential exposure to GAAP changes to isolate accounting-driven variation from the firm’s underlying economics. The results suggest unresolved measurement problems are a significant friction in resource allocation.
Academic & Professional Qualification
- Frankfurt School of Finance & Management (Frankfurt, Germany)
Ph.D. in Accounting (Doctor rerum politicarum, Summa Cum Laude), 2017–2020 - MIT Sloan School of Management (Cambridge, U.S.)
Visiting scholar, 2018–2019 - Tilburg University (Tilburg, Netherlands)
Research Master in Accounting, 2015–2017 - Dongbei University of Finance & Economics (Dalian, China)
B.B.A. (Accounting), 2010–2014
Biography
Prof. Ruishen Zhang joined HKU in 2024 as an Assistant Professor of Accounting. During 2020-2024, Ruishen held the position of Associate Professor of Accounting at Shanghai University of Finance and Economics. He holds a PhD in accounting from Frankfurt School of Finance and Management. His research interests lie in the areas of climate finance, information production in capital markets, financial accounting, and corporate governance. Taking advantage of unstructured data and advancements in textual analyses and large language models, Prof. Zhang is experienced in addressing important economic questions relevant to both academia and practice. His work has been published in the Journal of Finance and Management Science.
Research Interest
- Climate finance
- Information production in capital markets
- Corporate governance
- Executive compensation
Selected Publications
- Ionela Andreicovici, Valeri Nikolaev, Laurence van Lent, Ruishen Zhang (2026). Metering Problems and Resource Allocation. The Accounting Review, 101(4), 1-29. https://doi.org/10.2308/TAR-2024-0698
- Zacharias Sautner, Laurence Van Lent, Grigory Vilkov, Ruishen Zhang (2023). Firm-Level Climate Change Exposure. The Journal of Finance, 78(3), 1449-1498.
https://doi.org/10.1111/jofi.13219 - Zacharias Sautner, Laurence van Lent, Grigory Vilkov, Ruishen Zhang (2023). Pricing Climate Change Exposure. Management Science, 69(12):7540-7561.
https://doi.org/10.1287/mnsc.2023.4686
- Ruishen Zhang (2021). Language Commonality and Sell-Side Information Production. Management Science, 68(6):4435-4453.
https://doi.org/10.1287/mnsc.2021.4059
Recent Publications
1Jul
1 Jul 2026
The Accounting Review