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
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...

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...

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...

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

Forthcoming in Contemporary Accounting Research

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...

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...

Lisa De Simone, Joseph D. Piotroski, Rimmy E. Tomy
March 3, 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, 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...

Amir Amel-Zadeh, Mary E. Barth, Wayne R. Landsman
February 2017

Forthcoming in Review of Accounting Studies

Our analytical description of how banks’ responses to asset price changes can result in procyclical leverage reveals that for banks with a binding regulatory leverage constraint, absent...

Peter C. Psarras, Praveen Bains, Panuya Charoensawadpong, Mark Carrington, Stephen Comello, Stefan J. Reichelstein, Jennifer Wilcox
January 2017

It is well documented that a concerted effort is required to reduce the threat of climate change. One vital component in this portfolio of solutions — carbon capture and utilization — has been stalled by...

Mary E. Barth, Wayne R. Landsman, Daniel J. Taylor
January 2017

This study examines the effect of the Jumpstart Our Business Startups Act (JOBS Act) on information uncertainty in IPO firms. The JOBS Act creates a new category of issuer, the Emerging Growth Company (EGC), and...

Lisa De Simone, Jordan Nickerson, Jeri K. Seidman, Bridget Stomberg
December 16, 2016

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 seed Compustat data...

Lisa De Simone, Lillian F. Mills, Bridget Stomberg
December 15, 2016

We use confidential Internal Revenue Service data on the magnitude of U.S.-foreign intercompany transactions to develop a measure of the likelihood that U.S. multinational entities (MNEs) shift income out of the U.S. Results show...

Lisa De Simone, Richard Sansing
September 1, 2016

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

Alan D. Jagolinzer, David F. Larcker, Gaizka Ormazabal, Daniel J. Taylor
September 2016

This paper examines the relation between political connections and informed trading by corporate insiders in the context of the Financial Crisis. The unprecedented magnitude of government intervention, the substantial impact of this intervention on firm...