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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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...

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...

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...

Kevin Smith
November 9, 2018

In this paper, I study the impact of a firm’s risk disclosure on investors’ desire to acquire information about the firm. I first show that risk disclosure complements private learning by enabling sophisticated investors to...

Kevin Smith
October 25, 2018

In this paper, I develop an option-pricing model that formally incorporates a disclosure event. Using the model, I first theoretically examine how two properties of the disclosure – its overall informativeness and its informativeness given...

Charles M. C. Lee, Edward M. Watts
October 9, 2018

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...

Ed deHaan, David F. Larcker, Charles McClure
October 3, 2018

We examine the long-term effects of interventions by activist hedge funds. Prior papers document positive equal-weighted long-term returns and operating performance improvements following activist interventions, and typically conclude that activism is beneficial. We extend prior...

Charles M. C. Lee, Christina Zhu
September 2018

We use trade-level data to examine the role of actively managed funds (AMFs) in earnings news dissemination. AMFs trade (172 percent) more on earnings announcement (EA) days than on non-EA days. The EA buys made...

Lisa De Simone, Jing Huang, Linda Krull
September 2018


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

Lin William Cong, Charles M. C. Lee, Yuanyu Qu, Tao Shen
August 20, 2018

This study reports on the current state-of-affairs in the funding of entrepreneurship and innovations in China and provides a broad survey of academic findings on the subject. We discuss the implications of these findings for...

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...

Lisa De Simone, Jordan Nickerson, Jeri K. Seidman, Bridget Stomberg
May 2018


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....

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...