This paper uses the enactment of China’s 2007 Property Law (the Law), which reduces the risk of expropriation by local governments, as the setting to investigate the importance of property rights protection for private firm investment. Using propensity score matching and a...

This study examines individual analysts' relative strengths in earnings forecasting skill and stock picking skill. We define analysts with skill specialization when he has one skill substantially stronger than the other, and analysts with non-specialization when he has balanced skills. We follow...

In 2005, the SEC mandated that firms disclose risk factors to provide useful information about firm risk. An unintended effect of the mandate is that mandatory risk factor (RF) disclosure may constitute “meaningful cautionary language” as defined in the Private Securities Litigation Reform...

Drawing on the political theory of judicial decision making, our paper proposes a new and parsimonious ex ante litigation risk measure: federal judge ideology. We find that judge ideology complements existing measures of litigation risk based on industry membership and firm characteristics....

Using 321 circuit court rulings, we construct a measure that captures the within-country variation in courts’ attitudes toward securities law violations. Case-level analyses confirm that district courts heed home-circuit precedents and are more likely to dismiss pending cases when their home...

Artificial intelligence (AI), powered by machine learning algorithms, is capable of extracting information efficiently from big data and, therefore, has great potential for improving financial decision-making. In this chapter, we summarize several important applications of AI in this context....

This study examines analyst information intermediary roles using a textual analysis of analyst reports and corporate disclosures. We employ a topic modeling methodology from computational linguistic research to compare the thematic content of a large sample of analyst reports issued promptly...

We document that textual discussions in a sample of 363,952 analyst reports provide information to investors beyond that in the contemporaneously released earnings forecasts, stock recommendations, and target prices, and also assist investors in interpreting these signals. Cross-sectionally, we...