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.

SSRN Research Paper Series

The Social Science Research Network’s Research Paper Series includes working papers produced by Stanford GSB the Rock Center.

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Internalizing Peer Firm Proprietary Costs: Evidence from Supply Chain Relations

Farzana Afrin, Jinhwan Kim, Sugata Roychowdhury
August2023

We examine whether the proprietary costs of economically linked peers influence focal firms’ merger and acquisition (M&A) decisions, which often involve extensive transfers of proprietary information across merging entities. Using data on…

Digital Traffic, Financial Performance, and Stock Valuation

Christopher S. Armstrong, Yaniv Konchitchki, Biwen Zhang
July2023

[Preparing for third round review at The Accounting Review.]

We examine the economic implications of digital traffic. 

 

Advances in Power-to-Gas Technologies: Cost and Conversion Efficiency

Gunther Glenk, Philip Holler, Stefan J. Reichelstein
March2023

Widespread adoption of hydrogen as an energy carrier is widely believed to require continued advances in Power-to-Gas (PtG) technologies. Here we provide a comprehensive assessment of the dynamics of system prices and conversion efficiency for…

Moral Hazard and the Value of Information: A Structural Approach

Jeremy Bertomeu, Kyle (Jaehoon) Jung, Iván Marinovic
December2022

Executive compensation contracts use information from markets and accounting to elicit efficient incentives. We structurally estimate the contribution of each performance to quantify the relative importance of price versus accounting. For…

Cancel Culture and Social Learning

Iván Marinovic, Davide Cianciaruso, Ilan Guttman
November2022

We study social learning and information transmission in a sender-receiver game wherein senders may be attacked (“cancelled”) for challenging the status-quo beliefs. We find that cancellations (and self-censorship) don’t arise unless there is a…

IPOs and Corporate Tax Planning

Christine Dobridge, Rebecca Lester, Andrew Whitten
November2022

Does going public affect the amount and type of corporate tax planning? Using a panel of U.S. corporate tax return data from 1994 to 2018, we show that IPO completion is associated with the implementation of multinational income shifting…

Buy Now Pay (Pain?) Later

Ed deHaan, Jungbae Kim, Ben Lourie, Chenqi Zhu
September2022

“Buy Now Pay Later” (BNPL) is a largely unregulated FinTech innovation that provides consumers with easy access to credit for specific retail purchases. The BNPL market is projected to reach $1 trillion by 2025, but we know little about the…

Does Voluntary Non-Earnings Disclosure Substitute for Redacted Proprietary Contract Information?

Mary E. Barth, Wayne R. Landsman, Xiaoli (Shaolee) Tian, Miaomiao Yu
September2022

This study finds that voluntary non-earnings disclosures substitute for redacted proprietary contract information. When firms redact contract information, they provide more voluntary disclosures and have higher information uncertainty and…

Executive Compensation Contracts in the Presence of Adverse Selection

Christopher S. Armstrong, Luzi Hail, Rachel Xi Zhang
June2022

We develop three complementary tests to examine how adverse selection affects the design of executive compensation contracts: First, we show that externally hired CEOs receive higher total pay and have fewer equity incentives relative to…

Persuasion, Science, and Miracles

Jeremy Bertomeu, Iván Marinovic
June2022

As early as St Augustine and Aquinas, philosophers have studied the epistemology of contradictions to natural laws (aka, miracles). In this article, we develop a game-theoretic framework to analyze the concept of a miracle as understood by…

Rank-and-File Accounting Employee Incentives and Financial Reporting Quality

Christopher S. Armstrong, John D. Kepler, David F. Larcker, Shawn Shi
May82022

An extensive literature examines whether senior executives’ contractual incentives influence their financial reporting decisions. However, little is known about whether —  and how — the incentives of lower-level (or “rank-and-file”)…

Equity Book-to-Market Ratios Above One and Macroeconomic Risk

Mary E. Barth, Doron Israeli, Suhas A. Sridharan
May2022

Equity book-to-market ratios (BTM) should not exceed one if a firm’s return on equity exceeds its cost of capital or it employs conservative accounting. Yet, BTM is above one for many firms, particularly in recession years. We address whether…

Firm-specific Information and Proprietary Costs: Evidence from Mandated Integrated Reports

Mary E. Barth, Steven F. Cahan, Li Chen, Elmar R. Venter
April2022

Our study addresses whether integrated report quality, IRQ, is negatively associated with stock price synchronicity, an inverse measure of firm-specific information, and the extent to which the relation between IRQ and synchronicity is attenuated…

Public Firm Disclosures and the Market for Innovation

Jinhwan Kim, Kristen Valentine
March242022

We examine the spillover effect of public firm innovation disclosures on the patent trading market. Relative to equity markets, the patent market is decentralized and rife with information frictions, yet it serves as an important mechanism…

Transparency on the Path to Net-Zero

Stephen D. Comello, Julia Reichelstein, Stefan J. Reichelstein
March2022

We propose and describe a corporate carbon reporting framework intended to strengthen the credibility and transparency of the existing net-zero pledges. We refer to this framework as the Time-Consistent Corporate Carbon Reporting (TCCR…

How Does Private Firm Disclosure Affect Demand for Public Firm Equity? Evidence from the Global Equity Market

Jinhwan Kim, Marcel Olbert
February22022

Conditionally accepted at the Journal of Accounting and Economics.

We investigate the relationship between private firms’ disclosures and the demand for the equity of their publicly traded peers. Using data on the global…

Do Jobseekers Value Diversity Information? Evidence from a Field Experiment

Jung Ho Choi, Joseph Pacelli, Kristina M. Rennekamp, Sorabh Tomar
February2022

We examine how information about the diversity of a potential employer’s workforce affects individuals’ job-seeking behavior, and whether workers’ preferences explain corporate disclosure decisions. We embed a field experiment in job…

Creditor Control Rights and Executive Bonus Plans

Christopher S. Armstrong, John D. Kepler, Chongho Kim, David Tsui
December12021

We study whether and how creditors exercise their control rights to shape their borrowers’ executive compensation plans. Highly levered borrowers often face incentives to underinvest due to agency conflicts driven by differences in time horizon…

Quality Transparency and Healthcare Competition

John D. Kepler, Valeri V. Nikolaev, Nicholas Scott-Hearn, Christopher R. Stewart
November142021

Transparency of quality in the healthcare sector primarily aims to facilitate patients’ care decisions, however, it also provides useful information to competing healthcare providers. We study how competitors respond to increased transparency…

Corporate Carbon Reduction Pledges: An Effective Tool to Mitigate Climate Change?

Stephen D. Comello, Julia Reichelstein, Stefan J. Reichelstein
November2021

In this article we first summarize the specific plans articulated by seven major corporations for reducing their Corporate Carbon Footprints (abbreviated as CCF from hereon). Our sample is not intended to be representative of the broader…