We investigate how high-profile accounting frauds affect peer firms' investment. We document that peers react to the fraudulent reports by increasing investment during fraud periods. We show that this finding is not driven by frauds that have a higher ex ante likelihood of detection or by an...

This study examines a specific source of borrowers' proprietary information and lenders' ex ante information advantage, i.e., private information about the borrowers' forthcoming patents. We examine this unique setting, where borrowers have credible information regarding a positive future event...