Prior evidence that higher-quality financial reporting improves capital investment efficiency leaves unaddressed whether it reduces over- or under-investment. This study provides evidence of both in documenting a conditional negative (positive) association between financial reporting quality and...

EVA has attracted considerable attention as an alternative to traditional accounting earnings for use in both valuation and incentive compensation. With a host of consultants now marketing related metrics, numerous claims have been made-most based on anecdotal evidence or in-house studies. This...

It has been observed that firms alter year-end inventory policies in response to accounting tax incentives. This study proposes a stochastic ordering policy model which quantifies these effects. An innovative feature is its use of two decision variables: an initial order-up-to-level at the...

type="main" <title type="main">ABSTRACT</title> <p>We use changes in the value of a firm's real estate assets as an exogenous change in a firm's financing capacity to examine (1) the relation between reporting quality and financing and investment conditional on this change, and (2) firms’ reporting quality responses to the...</p>

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>This paper examines the effect of transaction costs on the post-earnings announcement drift (PEAD). Using standard market microstructure features we show that transaction costs constrain the informed trades that are necessary to incorporate earnings information into price. This implies...

Current research shows that firms are more likely to benchmark against peers that pay their Chief Executive Officers (CEOs) higher compensation, reflecting self serving behavior. We propose an alternative explanation: the choice of highly paid peers represents a reward for unobserved CEO talent....