There is a divergence in the returns of top-performing (star) firms and the rest of the economy, especially in industries that rely on a skilled labor force, raising concerns of their market power. We show that the divergence is largely explained by the mismeasurement of intangible capital....

The ability to reduce current and future taxable income with prior years' taxable losses is highly relevant for explaining firms' effective and marginal tax rates. Compustat data on the tax loss carryforward (TLCF) are, however, often missing. We propose a method to impute estimated values for...

The occurrence of accounting manipulation and creative accounting practices have consequently reduced the value of accounting numbers in the form of decreased earnings quality. Analysts use these reported earnings to make appropriate predictions and as such the underlining principles of the...

The highly mathematical nature of the Arrow-Debreu and other similar models of general equilibrium hide rather than elucidate the nature of equilibrium in a private property market economy where all factors of production may be purchased or rented. It is an empirical commonplace that the...

Active portfolio managers are eager to predict future volatility in the returns of schemes. Returns of each scheme are tracks with the returns of respective bench mark, technically called as tracking error. Ex-ante tracking error plays a crucial role in predicting future performance of the...

Non-classical measurement error with false positives and negatives produces biased and inconsistent estimates. This is the case whether the mismeasured variable is a dependent or an explanatory variable. Moreover, having an IV does not fix this issue. Instead, this paper shows that proper...

Mediation analysis empirically investigates the process underlying the effect of an experimentalmanipulation on a dependent variable of interest. In the simplest mediation setting, theexperimental treatment can affect the dependent variable through the mediator (indirecteffect) and/or directly...

Portfolio optimization often struggles in realistic out-of-sample contexts. We de-constructthis stylized fact, comparing historical forecasts of portfolio optimization inputs withsubsequent out of sample values. We confirm that historical forecasts are imprecise guidesof subsequent values but...

This paper revisits the role of land measurement error in the inverse farm size and productivity relationship. By making use of data from a nationally representative household survey from Uganda, in which self-reported land size information is complemented by plot measurements collected using...

The mechanism(s) that generate measurement error matter to inference. Survey measurement error is typically thought to represent simple misreporting correctable through improved measurement. But errors might also or alternatively reflect respondent misperceptions that materially affect the...