This paper investigates whether family ownership affects a firm’s cost behavior and profitability. We find that in response to changes in business activity level, family firms adjust their costs differently than non-family firms. That is, family firms decrease costs more sharply upon a sales...

Prior literature shows decision fatigue (the decline of decision quality after extensive decision-making) reduces analysts’ forecast accuracy. We study whether analysts strategically manage decision fatigue. Firms within an analyst’s research portfolio can differentially affect the...

The release of earnings information has become less timely in recent years partly because firms increasingly disclose earnings concurrently with their periodic reports (e.g., 10-Ks, 10-Qs). We examine whether firms use voluntary disclosure to mitigate the negative economic consequences of less...

Using the unique financial reporting format in China, where quarterly earnings are reported on a year-to-date basis, we test behavioral finance models featuring fundamental extrapolation. We show that stocks with the strongest past year-to-date earnings growth experience a significant price...

This study examines whether and how budgetary participation practices affect top managers’ earnings forecasts. Previous research indicates that subordinate managers participating in the budgetary process may try to “play games” and underestimate budgeted revenues or overestimate budgeted...

We investigate the effect of diversity on market reactions to financial disclosure. We show elevated trading volume and stock return volatility around earnings announcements for firms headquartered in culturally and linguistically diverse locales. These results continue to hold when earnings...

This paper examines how intrinsic circadian rhythm variation in the human body contributes to predictable day and night changes in the characteristics of earnings forecasts made by financial analysts. We find evidence supporting a casual relation between analyst performance and the day and night...

Purpose: This study examines the Australian Securities Exchange (ASX) 200 listed firms that reported underlying profits from 2009 to 2012 to determine whether the underlying profits reflect accounting-based and market-based financial reporting quality. Design: The panel-data modelling results...

Managerial, or discretionary, earnings opacity is the intentional lack of transparency to hide the intrinsic value of a firm. Opacity arises through two channels. The first is ex ante, when managers manipulate current expectations about future performance; and the second is ex post, when managers...