Using a large sample of firms listed on the Korea Stock Exchange over the 1992-2002 period, this paper investigates a hitherto unexplored question of whether and how trading by foreign and domestic institutional investors improves the extent to which firm-specific information is incorporated...

This study examines whether real earnings smoothing influences equity and credit investors’ perceptions of risk. Using a large sample of U.S. public firms, we find that real earnings smoothing is negatively associated with option-implied volatility, suggesting that real earnings smoothing...

We investigate how local political corruption shapes corporate financial reporting conservatism. Using a large sample of U.S. public firms, we find that firms located in areas with higher levels of political corruption tend to adopt greater accounting conservatism. This finding is robust to...

This study examines the relation between narrative risk disclosures in mandatory reports and the pricing of credit risk. In particular, we investigate whether and how the SEC mandate of risk factor disclosures (RFDs) affects credit default swap (CDS) spreads. Based on the theory of Duffie and...

This study first establishes a causal relation between insider trading and the likelihood of stock price crash occurrence, and then investigates potential channels through which the former influences the latter. Exploiting the initial enforcement of insider trading laws in a country as a natural...

This paper presents large-sample evidence that firms consider labor unemployment risk when setting their resource adjustment policies. Prior studies find that costs rise more in response to sales increases than they fall in response to sales decreases. Anderson, Banker, and Janakiraman (2003)...

Using the U.S. Securities and Exchange Commission's mandate of extensible Business Reporting Language (XBRL) as a natural experiment, this study investigates whether and how the decreased information-processing costs brought about by XBRL influence firms' breadth of share ownership. We find that...

This study investigates the effect of the debtor–creditor relationship on firms' tax planning decisions. We explore the initiation of credit default swaps (CDS) as a shock to the debtor–creditor relationship that attenuates the concavity of creditors' payoff function and reduces their...

This study examines whether and how linguistic information quality (measured by readability) of customer firms' management earnings forecast reports (MEFRs) affects supplier firms' investment quality (measured by investment efficiency). Our analyses reveal that (1) supplier investment efficiency...

We investigate the impact of customer concentration on stock price crash risk. Customer concentration may represent a source of significant cash flow and business risk for supplier firms or benefit supplier firms in terms of efficient product, inventory and supply chain management. Using a large...