This paper uses worldwide survey evidence to study the effect of derivative accounting standards on firms? risk management activities. More than 40% of the companies indicate that their risk management policies have been affected by the new standards. Their ability to hedge from an economic...

We study the extent to which a firm’s social capital, as measured by the intensity of a firm’s corporate social responsibility (CSR) activities, affects firm performance during the 2008-2009 financial crisis. We find that high-CSR firms have crisis-period stock returns that are four to five...

type="main" <title type="main">ABSTRACT</title> <p>Rating agencies have become more conservative in assigning corporate credit ratings over the period 1985 to 2009; holding firm characteristics constant, average ratings have dropped by three notches. This change does not appear to be fully warranted because defaults have...</p>

The financial crisis of 2008 and the resulting recession caught many companies unprepared and, in so doing, provided a stark reminder of the importance of effective risk management. While academic theory has long touted the benefits of risk management, companies have varied greatly in the ways...

<heading id="h1" level="1" implicit="yes" format="display">ABSTRACT</heading>We examine the determinants and the informativeness of financial analysts' risk ratings using a large sample of research reports issued by Salomon Smith Barney, now Citigroup, over the period 1997-2003. We find that the cross-sectional variation in risk ratings is largely explained by...

In the asset pricing literature, time-variation in market expected excess return captured by financial ratios like dividend yield is typically viewed as a reflection of either changing risk, related to the business cycle, or irrational mispricing. Extending the work on asset allocation and...

In this paper, we propose a rational learning-based explanation for the predictability in financial analysts' earnings forecast errors documented in prior literature. In particular, we argue that the serial correlation pattern in analysts' quarterly earnings forecast errors is consistent with an...