A recent literature uses the annual reconstitution of the Russell 1000 and 2000 Indexes as a source of seemingly exogenous variation in institutional ownership to study the effect of institutional ownership on firm outcomes. We show that lagged institutional ownership measured prior to...

I use a natural experiment, Reg SHO, that relaxed short selling constraints on a random sample of U.S. stocks to study how capital market frictions affect conditional conservatism in financial reporting, defined as earnings reflecting bad news more quickly than good news. Since reducing short...

I examine the effect of corporate governance on tax avoidance. Specifically, I use a regression discontinuity design to analyze the effect of governance-related shareholder proposals that pass or fail by a small percentage of votes. The passage of such proposals around the 50% threshold can be...