We examine the product market sanctions resulting from financial misrepresentation. We generate a direct measure of product market sanctions and find that after a firm is accused of fraud, its customers impose real and significant economic sanctions on the firm. Using transactional data to track...

We examine the consequences of a damaged reputation for fraud firms in the context of product markets. We generate three direct measures of reputational damage and find evidence that customers impose significant reputational sanctions on fraud firms. Using yearly transactional data to track the...