Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

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Charles M. C. Lee, Eric C. So, Charles C. Y. Wang
December 30, 2019

We introduce a parsimonious framework for choosing among alternative expected-return proxies (ERPs) when estimating treatment effects. By comparing ERPs’ measurement-error variances in the cross-section and time series, we provide new evidence on the relative performance...

Jung Ho Choi, Brandon Gipper, Shawn X. Shi
December 2019

Pay for non-performance is among the most prominent arguments of executive rent extraction, especially Bertrand and Mullainathan’s (2001) pay for luck. We revisit their finding over the last two decades, 1997 through 2016. Pay for...

Rebecca Lester, Lisa De Simone, Aneesh Raghunandan
November 6, 2019


We examine the association between thousands of state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of employees, aggregate wages, per capita employment,...

Jung Ho Choi, Brandon Gipper, Sara Malik
November 2019

We examine whether financial reporting quality influences employee turnover and wages using employer-employee matched data in the U.S. We find that low financial reporting quality is associated with high employee turnover risk, so workers demand...

Charles M. C. Lee, Yuanyu Qu, Tao Shen
October 2019

We study firms that go public through reverse mergers (RMs) versus initial public offerings (IPOs) in China. Using a manually assembled data set, we show...

Brandon Gipper, Luzi Hail, Christian Leuz
October 2019

We provide the first partner tenure and mandatory rotation analysis for a large cross-section of U.S. publicly listed firms over an extended period. We analyze the effects on audit quality as well as on audit...

Lisa De Simone, Marcel Olbert
October 2019


We investigate the effects of mandatory private Country-by-Country (CbC) disclosure to European tax authorities on economic activity. Using rich data on the operations of multinational firms, we exploit the threshold-based application...

Lisa De Simone, Ken Klassen, Jeri Seidman
September 2019


Do firms balance tax and operating considerations when making investment decisions? We investigate whether income-shifting aggressiveness affects new investments and predict firms that aggressively shift income will choose affiliate-level investments driven...

Charles M. C. Lee, Christina Zhu
August 2019

We use trade-level data to examine the role of actively managed funds (AMFs) in earnings news dissemination.   AMFs trade 170 percent more on earnings announcement (EA) days than on non-EA days.  Abnormal AMF participation is...

Charles M. C. Lee, Yanruo Wang, Qinlin Zhong
August 2019

We develop a Loan Portfolio Risk (LPR) variable that measures time-varying volatility in default risk for a portfolio of bank loans.  An Equity-to-LPR ratio (ELPR) is incrementally important in predicting bank failure up to five...

Philip G. Berger, Jung Ho Choi, Sorabh Tomar
June 9, 2019

Does decomposing cost of goods sold entail significant competitive costs? We examine this question using a relaxation of disaggregated manufacturing cost disclosure requirements in Korea. Our survey evidence indicates managers perceive these disclosures to provide...

Shannon Chen, Lisa De Simone, Michelle Hanlon, Rebecca Lester
June 2, 2019


We study whether innovation box tax incentives, which reduce tax rates on innovation-related income, are associated with tax-motivated income shifting, investment, and employment in the countries that implement these regimes....

Charles M. C. Lee, Edward M. Watts
May 9, 2019

This study examines how an increase in tick size affects algorithmic trading (AT), fundamental information acquisition (FIA), and the price discovery process around earnings announcements (EAs). Leveraging the SEC’s randomized “Tick Size Pilot” experiment, we...

Jung Ho Choi, Brandon Gipper
May 2019

We examine employment effects, such as wages and employee turnover, before, during, and after periods of fraudulent financial reporting. To analyze these effects, we combine U.S. Census data with SEC enforcement actions against firms with...

David F. Larcker, Edward M. Watts
February 22, 2019

This study investigates whether investors are willing to trade-off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, over $23...

David F. Larcker, Charles McClure, Christina Zhu
February 11, 2019

We examine the selection of peer groups that boards of directors use when setting the level of CEO compensation. This choice is controversial because it is difficult to ascertain whether peer groups are selected to...

Lisa De Simone, Bridget Stomberg, Brian Williams


Tax enforcement around the world has received increased attention since the Global Financial Crisis, with much stated focus on curbing perceived harmful tax practices of multinational entities. Yet multinationals have opportunities...

Sharma Eesha, Stephanie M. Tully, Cynthia Cryder

Abstract coming soon.

David F. Larcker, Brian Tayan
December 3, 2018

Companies are required to have a reliable system of corporate governance in place at the time of IPO in order to protect the interests of public company investors and stakeholders. Yet, relatively little is known...