Theory and recent empirical literature suggest that social and professional connections may influence corporate policy. However, inference may be biased by the possibility that firms who share peers also share unobserved characteristics that are correlated with observed policy. Using a novel...

Companies are adopting executive compensation recoupment ("clawback") policies to discourage aggressive financial reporting choices. Recent research suggests clawback policies might encourage other, less aggressive, means of meeting earnings expectations. We suggest that reducing income tax...