This study examines the sensitivity of CEO compensation to fair value gains and losses in derivatives for firms in the U.S. oil and gas industry. Our evidence indicates that firms use derivatives for both hedging and non-hedging purposes and that the derivative gains have a substantial impact on...

We examine whether attribution bias that leads managers who have experienced short-term forecasting success to become overconfident in their ability to forecast future earnings. Importantly, this form of overconfidence is endogenous and dynamic. We also examine the effect of this cognitive bias...

We examine the relative accuracy of management and analyst forecasts of annual EPS. We predict and find that analysts' information advantage resides at the macroeconomic level. They provide more accurate earnings forecasts than management when a firm's fortunes move in concert with macroeconomic...

Firms enjoy a wide degree of discretion in their disclosure of events in the patent granting process, which investors generally view as "good news" announcements. This study examines the timing of patent disclosure in conjunction with earnings announcements in light of managers' incentives to...

Financial economics has traditionally posited a limited role for idiosyncratic noneconomic manager-specific influences, but the strategic management literature suggests such individual influences can affect corporate outcomes. We investigate whether individual managers play an economically...

Research Question- What is the relationship between a company's liquidity and profitability? Motivation- There are two theoretical views in the literature regarding the relationship between liquidity and profitability: one view is that there is a trade-off between the two where too much...

We assess the impact of the Sarbanes-Oxley Act (SOX) on discretionary accruals (DA) and real earnings management (REM) activities around CEO turnovers. Improved corporate governance post-SOX can either deter earnings management (the deterrence effect) or pressure CEOs to inflate earnings when...

To answer the question what causes an asset to be illiquid, we analyze the impact that transparency of corporate accounting information has on the liquidity of its traded bonds. In particular, we focus on how this relationship depends on aggregate liquidity and the financial state of the firm....

The study extends previous research on the relation between environmental and financial performance in two ways. First, we recognize that the inherent environmental risk differs among industries. Increased levels of industry risk cause companies to have lower market values even if they are more...

Following CEO turnovers, US firms adjust real business activities to manage earnings downward (REM bath). This effect is most pronounced in firms with low levels of institutional ownership. REM baths early in CEOs' tenure can be confounded with legitimate adjustments to business activities....