Biography听听
Elizabeth has taught and/or presented her research at institutions and conferences in more than 30 countries around the world. Her recent research interests are related to the role of non-financial听information, including听linguistic measures derived from textual analysis of corporate communications听and companies鈥� ESG scores,听in assessing and predicting firm performance.听Her studies have been published in the Journal of Accounting Research, the Journal of Financial Economics, Management Science, Review of Accounting Studies, the Harvard Business Review, and other top outlets, and they are widely cited in both the academic literature and in the financial press (The Economist, Fortune, Forbes,听Financial Times,听etc.). Her consulting activities include financial statement analyses and 鈥渞ed flag reviews鈥� for hedge funds and other institutional investors, research and teaching presentations to investment fund managers, and litigation support for the quantification of economic damages.听
Passion听
Although Professor Demers majored in accounting, she has always loved the stock market, therefore it is only fitting that Demers researches听in the field of听empirical capital markets in accounting听(i.e., at听the intersection of accounting and finance). Broadly speaking, she studies how accounting information feeds into stock prices. Accounting as a discipline is often thought of as bookkeeping, but there鈥檚 more to it than that. Accounting is information that is used in making business decisions. Professor Demers analyzes that information and how it relates to stock market related outcomes.听听
Her current passion relates to ESG (Environmental, Social, and Governance), which听measures tend to score听the social听and environmental听costs and benefits of the company鈥檚 actions.听One of her recent studies examined whether the stock prices of firms with high ESG scores were more resilient during the market meltdown at the start of the pandemic (spoiler: they听weren鈥檛).听Her听research听also听looks at听how a company鈥檚 LGBTQ-related听diversity and inclusion practices impact听corporate听innovation and firm performance, and, separately, what factors explain companies鈥� decisions to voluntarily disclose climate risk related information to the TCFD.听听听
Issues in the research area听
Professor Demers, throughout her entire career, has looked at the role of non-financial performance measures as supplements to听more traditional听financial听statement information. For example, in the early days of the internet,听the financial statements of intangible asset-laden early stage tech companies offered, at best, an incomplete picture of the firms鈥櫶齰alue creation听and听survival prospects.听So,听her internet company studies examined the complementary role of web traffic metrics听(i.e., non-financial performance measures)听in assessing firm performance.听听
Another element of Professor Demers鈥櫶齬esearch is analyzing the role of language as a supplementary source of information for the stock market. Demers explains that algorithms听originally听developed by linguists听have been tailored by finance and accounting professionals to be听applied to corporate听communications听to听extract听linguistic听signals听of executives鈥� optimism or pessimism about their firms鈥� performance and prospects.听 From the perspective of understanding the firm, assessing听its听value, predicting its future, etc., the accounting statements are backward looking, whereas听value听is premised upon future expectations. Accordingly, the financial statements alone are听insufficient for assessing the firm鈥檚听prospects. Fortunately, language offers听a natural supplement.听Indeed,听a majority of听the information that a firm听releases听is in the form of textual information.听Hedge funds听now commonly听trade on linguistic signals, with corporate announcements released on newswires being automatically fed through proprietary algorithms, triggering trades when optimism, pessimism, or some other linguistic feature exceeds a predetermined threshold.听Many executives have grown wise to traders鈥� use of linguistic analyses, and听now modify how they communicate听to听avoid triggering unwanted activity in their firm鈥檚 stock trading.听听
Professor Demers describes that, in her opinion,听the areas of most excitement in her field听are to be found听at the intersection of using tools and knowledge bases from other disciplines, such as psychology and human information processing, or linguistics and vocal intonations. Demers spends her time blending psychology,听sociology,听linguistics, and听more recently听environmental science-based听measures of the firm鈥檚听performance, and听seeing听how they are reflected in share prices and/or otherwise affect corporate behavior.听听
Advice听
Follow your passions. It鈥檚 what I鈥檓听doing,听and I have no regrets.
Demers offers a very simple piece of advice, 鈥淔ollow your passions.鈥� She explained that this is exactly that led her to her current position. When she decided to pursue her PhD, Demers had already听obtained her CA听(now CPA) and听CBV听designations,听and听she听was starting to earn a pretty good听living. But she was not passionate about her work until she decided to听pursue a career in academia. She also applied this same philosophy to her research. Demers was intrigued and keen on exploring听the听intersections of new areas in order to not only challenge herself, but also others around her to think differently.听
