Past research has extensively addressed the influence of accounting information on stock prices. However, results of this branch of capital market based research have been inconclusive, partly due to methodological deficiencies. Focusing on differential groups of market participants, such as...

Fair value estimates of debt and equity securities play an increasingly important role in the economy. For example, International Financial Reporting Standards require companies to report many of their investments at fair value on the balance sheet or to use fair values in goodwill impairment...

This report consists of two parts. The first part is a research note describing a comprehensive analysis of the realized return differential between small and large firms (i.e., the "size premium") in a sample of European stocks during the period between 1990 and 2018. This study establishes...

This study examines the effect of firm-level transparency on liquidity and trading in a multi-market setting, using the market for American Depository Receipts (ADR) as an example. Theory predicts competing effects of transparency on liquidity differences between stocks trading domestically and...

This study examines whether PCAOB inspection reports succeed in providing a meaningful signal of audit quality. We find a statistically and economically significant market response to the issuances of 224 first-round and 134 second-round inspection reports between January 2005 and March 2010,...

This paper empirically tests the principal-agent model prediction that the use of performance measures for incentive purposes is affected by the agent's risk aversion. We identify proxies for managerial risk aversion that can be measured using publicly available executive compensation data and...

In this study we investigate whether the importance of accounting information in contracting and communication with shareholders and creditors affects earnings timeliness in publicly disclosed general purpose financial statements. To operationalize the relationship between timeliness demands and...