Prior research establishes that boards of directors can encourage risk-averse managers to take risky actions by providing stock options and severance pay. We demonstrate that the ability of these incentives to encourage risk-taking hinges on the level of uncertainty facing the manager, and that...

We investigate how firm cost structure influences the information environment by studying the relation between the degree of operating leverage, earnings properties, and the usefulness of earnings to shareholders. Because the degree of operating leverage increases the impact of the incremental...

Economic theory predicts that insiders reveal private information when they trade equity in their firm. However, insider purchases to meet equity holding requirements or sales to satisfy liquidity needs do not reveal private information. We predict that contract terms stipulating CEO equity...

Using data from U.S. corporate tax returns, we investigate the differential investment propensities of public and private firms. Tax return data uniquely provide rich detail on corporate investment reported under identical standards and is representative of the universe of U.S. corporations....

We investigate the tax implications for the new recreational marijuana industry in the United States, which reached a size of \$9 billion in 2017. We exploit administrative data from Washington state to evaluate market conduct, and we estimate the elasticity of supply to be 1.46. In addition, we...

Using data from U.S. corporate tax returns, which provide a sample representative of the universe of U.S. corporations, we investigate the differential investment propensities of public and private firms. Re-weighting the data to generate observationally comparable sets of public and private...

Taking inefficiencies from taxation as given, a well-known public finance literature shows that the elasticity of taxable income (ETI) is a sufficient statistic for assessing the deadweight loss (DWL) from taxing labor income in a static neoclassical framework. Using a theoretical approach, we...