Whether corporate diversification decreases or increases the risk of the diversifying firm is an important empirical question. We investigate this issue using a sample of diversifying acquisitions and various risk measures. We find that corporate diversification tends to decrease the risk of...

A considerable amount of research has been devoted to why R2 differs across firms or markets, although little attention has been paid to the consequences of this difference. We fill this gap by investigating how differing R2 affects investors' assessment of firm value. Using a sample of 90,111...

We investigate whether and how labor unions affect information asymmetry among investors. To account for the endogeneity of unionization, we adopt an IV 2SLS model, a differences-in-differences technique, and Heckman's (1979) two-stage procedure. We also explore an exogenous proxy for employees'...

Whether and how accounting information quality affects the cost of capital has been a matter of much debate. We contribute to this debate by linking accounting information quality to systematic risk, inspired by recent theoretical discussions. Using the universe of firms jointly listed in the...

There are substantial differences in stock market volatility across countries. This paper asks why market volatility differs across countries. Using Datastream Country Indexes covering thirty seven international markets, this paper finds that the education level of investors plays a significant...

This paper demonstrates that the effects of unanticipated monetary policy changes (shocks) on real estate investment trust (REIT) returns are asymmetric between the high- and low-variance regimes. A Markov regime-switching model with error correction terms is used to quantify the impact of...

This paper examines how seller pricing decisions influence listing contract length and how these decisions affect price and liquidity in housing markets. Because list price affects broker effort required to sell the property, brokers respond to seller overpricing by increasing their desired...

We investigate whether and how managerial ability affects financial report complexity. After controlling for a host of firm characteristics such as firms’ financial and operating complexity, we find that managerial ability is significantly and positively related to the complexity of financial...