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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John E. Bistline, Stephen D. Comello, Anshuman Sahoo
August 5, 2017

Many irreversible long-run capital investments entail opportunities for managers to respond flexibly to changes in the economic environment. However, common levelized cost measures used to guide decision-making, such as the levelized cost of electricity, implicitly...

Lisa De Simone, Richard Sansing
July 18, 2017

This study investigates the use of a cost sharing arrangement (CSA) by a multinational corporation (MNC) to shift the income attributable to valuable intellectual property (IP) to low-tax foreign jurisdictions. Using a strategic tax compliance...

Shannon Chen, Lisa De Simone, Michelle Hanlon, Rebecca Lester
July 10, 2017

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

Jung Ho Choi
July 2017

I evaluate the role of accrual accounting in improving firms’ production decisions and resource allocation across firms. I introduce both cash flow and accounting earnings as imperfect measures of performance into a general equilibrium model...

Lisa De Simone, Jordan Nickerson, Jeri K. Seidman, Bridget Stomberg
June 27, 2017

Can common empirical tests reliably identify tax avoidance? This is an important question because our understanding of the determinants of tax avoidance largely depends on results generated using such tests. We address this question...

Charles M. C. Lee, Eric C. So, Charles C. Y. Wang
June 3, 2017

We argue, from an extensive literature review, that in the vast majority of research settings, biases in alternative expected-return proxies (ERPs) are irrelevant. Therefore, in most settings, the choice between alternative ERPs should be based...

Ian D. Gow, David F. Larcker, Brian Tayan
May 25, 2017

CEO succession at many companies occurs in a black box. Shareholders are not privy to boardroom discussions prior to the announcement of a CEO departure, and press releases announcing the change contain boilerplate language that...

Lisa De Simone, Jing Huang, Linda Krull
May 17, 2017

We investigate how R&D contributes to foreign profit margins in U.S. multinational corporations (MNCs) through wage savings and tax incentives. Our results suggest that although wage savings increase foreign profit margins attributable to foreign...

Elizabeth Blankespoor, Ed deHaan, Christina Zhu
May 10, 2017

Accepted at Review of Accounting Studies

In 2014, the Associated Press (AP) began using algorithms to write media articles about firms’ earnings announcements. These “robo-journalism” articles synthesize information from firms’ press releases, analyst...

Lisa De Simone, Joseph D. Piotroski, Rimmy E. Tomy
May 8, 2017

We examine whether anticipation of Congress enacting a reduction in repatriation taxes affects the amount of cash U.S. multinational corporations (MNCs) hold overseas. Prior papers have focused on which U.S. MNCs repatriated foreign cash and...

Mary E. Barth, Kurt H. Gee, Doron Isreali, Ron Kasznik
April 27, 2017

We address whether firms manage stock prices in anticipation of share issuances. A literature in finance attributes negative returns following share issuances to market timing, whereas studies in accounting interpret similar return patterns as evidence...

Maureen McNichols, William H. Beaver, Zach Wang
April 2017

No abstract available

Mary E. Barth, Javier Gomez-Biscarri, Ron Kasznik, Germán López-Espinosa
April 2017

Based on a large sample of publicly listed and non-listed US commercial banks from 1996 to 2011, we find robust evidence consistent with banks using realized available for sale (AFS) securities gains and losses to...

Stefan J. Reichelstein, Ansu Sahoo
April 2017

A basic tenet of microeconomics is that for a competitive industry in equilibrium the market price of a product will be equal to its marginal cost. This paper develops a model framework and a corresponding...

Mary E. Barth, Steven F. Cahan, Lily Chen, Elmar R. Venter
April 2017

The International Integrated Reporting Council’s Framework identifies two goals for integrated reporting: improved information for outside providers of financial capital and better internal decision making. We extend prior research that finds a positive association between...

David F. Larcker, Brian Tayan
March 28, 2017

Many observers consider the most important responsibility of the board of directors its responsibility to hire and fire the CEO. To this end, an interesting situation arises when a CEO resigns and the board chooses...

Mary E. Barth, Ken Li, Charles G. McClure
March 14, 2017

We find the value relevance of accounting information has increased between 1962 and 2014. The information we consider comprises twelve accounting amounts plus ten industry indicators. Regarding individual accounting amounts, we find that operating cash...

Mary E. Barth, Wayne R. Landsman, Vivek Raval, Sean Wang
March 2017

This study finds that greater asymmetric timeliness of earnings is associated with slower resolution of investor disagreement and uncertainty at earnings announcements. These findings indicate that a potential cost of asymmetric timeliness is that it...

Salman Arif, Azi Ben-Rephael, Charles M. C. Lee
February 24, 2017

Daily directional trading by mutual funds (MFs) is highly-persistent and price-destabilizing, leading to return reversals lasting months.  This effect is distinct from the “flow-induced trading” phenomenon in prior studies.  At the same time, short-sale volume...

Charles M. C. Lee, Ken Li
February 14, 2017

Predicted stock issuers (PSIs) are firms with expected “high-investment and low-profit” (HILP) profiles that earn unusually low returns.  Over a 36-year period (1978-2013), average returns to top-decile PSIs are indistinguishable from Treasury yields.  We show...