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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James Copland, David F. Larcker, Brian Tayan
May 30, 2018

Proxy advisory firms have significant influence over the voting decisions of institutional investors and the governance choices of publicly traded companies. However, it is not clear that the recommendations of these firms are correct and...

David F. Larcker, Brian Tayan
May 1, 2018

The hallmark of good corporate governance is an independent board of directors to oversee management. However, it is not clear that independent directors receive the information they need to make fully informed decisions on all...

Mary E. Barth, Greg Clinch, Paul Ma
April 22, 2018

We address whether mandatory forecasts of earnings announcement dates are informative and what are the informational tradeoffs between mandatory and voluntary forecasts. We find China mandatory forecasts predict actual earnings announcement dates and yet-to-be-announced firm...

Charles M. C. Lee, Yuanyu Qu, Tao Shen
March 13, 2018

We study firms’ choice to go public through reverse mergers (RMs) versus initial public offerings (IPOs) in a regime with strict entry regulations. Using a manually-assembled data set from China, we show that Chinese RM...

Paul Brest, Mark A. Wolfson, Ronald J. Gilson
March 2018

Most investors have a single goal: to earn the highest financial return. These socially-neutral investors maximize their risk-adjusted returns and would not accept a lower financial return from an investment that also produced social benefits....

Jung Ho Choi
January 2018

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

Mary E. Barth, wayne R. Landsman
January 2018

Whether fair value accounting should be used in financial reporting has been the subject of debate for many years. A key dimension to this debate is whether fair value earnings can provide information to financial...

David F. Larcker, Peter C. Reiss, Brian Tayan
November 16, 2017

The board of directors is expected to ensure that management has identified and developed processes to mitigate risks facing the organization, including risks arising from data theft and the loss of information. Unfortunately, recent experience...

Kevin Smith
November 10, 2017

In this paper, I develop an option-pricing model that formally incorporates a disclosure event. The model suggests that an understanding of a firm’s disclosure policies can aid in efficiently pricing its options. The reason is...

Kevin Smith, MIrko S. Heinle, Paul E. Fischer
November 9, 2017

We consider a cheap talk setting with two senders and a continuum of receivers with heterogenous preferences. Receivers listen to just one sender, but can choose which sender to listen to. We determine that: (i)...

Maureen McNichols, William H. Beaver, Zach Zhiguang Wang
November 9, 2017

This study examines the factors contributing to a striking increase in information content of quarterly earnings announcements, measured as the absolute magnitude of stock price revision at earnings announcements relative to price revision at other...

Charles M. C. Lee, Stephen Teng Sun, Rongfei Wang, Ran Zhang
October 23, 2017

This paper finds evidence of return predictability across technology-linked firms.  Employing a classic measure of technological closeness between firms, we show that the returns of technology-linked firms have strong predictive power for focal firms’ returns. ...

Charles M. C. Lee, Christina Zhu
October 1, 2017

We use trade-level data to examine the role of mutual funds (MFs) in earnings news dissemination. MFs trade (172%) more on earnings announcement (EA) days than on non-EA days. The EA trades made by MFs...

Charles M. C. Lee, Yuanyu Qu, Tao Shen
September 9, 2017

Using a comprehensive sample of reverse merger (RM) transactions, we examine the effects of China’s IPO regulations on the prices and returns of its publicly listed stocks. During 2007-2015, unlisted Chinese firms paid an average...

Lisa De Simone, Lillian F. Mills, Bridget Stomberg
August 22, 2017

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We use confidential Internal Revenue Service (IRS) data on the magnitude of U.S.-foreign intercompany transactions to develop a financial statement-based measure of the likelihood that U.S. multinational entities (MNEs) make...

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...

Peter C. Psarras, Stephen Comello, Praveen Bains, Panunya Charoensawadpong, Stefan J. Reichelstein, Jennifer Wilcox
August 2017

The fabrication and manufacturing of industrial commodities such as iron, glass and cement is carbon-intensive. A major reason capture of carbon dioxide from flue gases of industrial processes has not been widely adopted as a...

Brandon Gipper, Luzi Hail, Christian Leuz
August 2017

This paper provides the first partner tenure and 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 economic tradeoffs...

Kevin Smith
July 31, 2017

Revise and Resubmit at The Review of Financial Studies

In this paper, we develop a model in which risk-averse investors trade on private information regarding both a stockís expected payo§ and risk. These investors may...