Corporate credit ratings have tightened gradually but substantially over two decades. We ex- amine whether syndicated loans correct for the conservatism. We find that they do not. The correction in spreads is greater for smaller, speculative borrowers, loans with fewer lenders and a greater lead...

Different market characteristics and investor behavior render the use of underpricing, widely used for equity IPOs, inadequate as a measure of gains from primary market allocations in corporate bonds. We propose a measure that reflects the illiquidity costs that investors save by avoiding...

We argue that earnings management and fraudulent accounting have important economic consequences. In a model where the costs of earnings management are endogenous, we show that in equilibrium, low-productivity firms hire and invest too much in order to pool with high productivity firms. This...