This study examines whether and when credit rating agencies take negative rating actions against issuers committing accounting fraud before the fraud is publicly revealed as well as the economic impacts of such rating actions. We find that Standard & Poor's (S&P), an issuer-paid rating agency,...

We examine how the market power of credit rating agencies (CRAs) affects their rating standards. Using a global sample across 26 countries from 1994 to 2019, we find that greater market power of global CRAs, measured by their country-level market shares, is associated with stricter corporate...

Firms with higher R&D intensity subsequently experience higher stock returns in international stock markets, highlighting the role of intangible investments in international asset pricing. The R&D effect is stronger in countries where growth option risk is more likely priced, but is unrelated to...

This study explores whether meeting or beating management forecasts is indicative of managerial talent. We find that the market reacts positively when firms meet or beat their management forecasts after controlling for meeting or beating analyst forecasts and management forecast errors. Further...

This study examines the effects of the mandatory adoption of International Financial Reporting Standards (IFRS) on the contract terms of bank loans in a global setting. Using a difference-in-differences design based on 26,474 bank loans in 31 countries during the 2000-2011 period, we find that...

We investigate whether and how an exogenous and unprecedented improvement in the quality of non-U.S. firms' financial reporting affects post-earnings-announcement drift (PEAD). We find that PEAD declines after the information shock, and the decrease is more pronounced among firms with fewer...