In a dynamic model of merger negotiation with two-sided private information two-sided endogenous initiation, this paper investigates (1) what determines the timing of M&A initiation, and (2) who initiates the M&A negotiation; (3) why bid premia are different between target-initiated deals and...

We study how investors' use of machine learning methods affects corporate financial reporting decisions. Our model consists of a representative investor who employs a regularized regression (e.g., lasso) to infer value from earnings reports, along with a firm manager who may bias earnings...

Prior research documents that asset growth is negatively associated with future firm performance. In contrast, we show that growth financed by product market stakeholders (i.e., “operating growth”) is positively associated with future firm performance. Investors and security analysts...