This paper studies the heretofore unexamined effect of Sarbanes-Oxley Act of 2002 (SOX) on the spread-accruals relationship. We document that SOX has no impact on the overall spread-accruals relationship but, as hypothesized, it has a moderating effect on the discretionary (but not innate)...

This paper examines the relation between earnings management and the marginal cost of debt to the firm using a sample of traded corporate bonds for the period 1994-2005. The marginal cost of debt is captured by market determined yield spreads, while earnings management is proxied by three...

This study addresses the empirical question, quot;Of what value are shareholder proposals sponsored by public pension funds?quot; and finds that the primary function of a proposal is to act as a signaling mechanism in alerting the market that management is unwilling or unable to negotiate a...

This paper examines the impact of labor union shareholder activism through the submission of shareholder proposals during 1988-2002. We examine the effect of labor union sponsored shareholder proposals on announcement period returns, on the corporate governance environment of the firm including...

We find that equity mispricing impacts the speed at which firms adjust to their target leverage and does so in predictable ways depending on whether the firm is over- or underlevered. For example, firms that are above their target leverage and should therefore issue equity (or retire debt),...

Using a multi-period valuation model, we examine the impact of market misvaluation on the firm's choice of security for funding the financing deficit. We find that firms which appear to be overvalued relative to previous years, fund a greater proportion of their deficit with equity rather than...

This paper comprehensively examines whether the presence of interlocked directors on a board is associated with weak governance. For a sample of 3,566 firm-years over the 2001-2003 time period, we find that firms with lower industry-adjusted firm performance are more likely to have interlocked...

This paper examines the price response to large block transactions made on the Australian Stock Exchange during the 1999 sample period. We find asymmetry in the price reaction between buyer- and seller-initiated trades with respect to size and resiliency following the trade. We extend previous...

We examine if managerial ability affects the efficiency of the contracting environment with lenders. We find that higher ability alters the balance of information-sensitive covenants demanded by outside investors, increases the issuance of bonds with longer maturity, and decreases the issuance...

Do investors benefit when managers have long-term perspective? The dominant narrative suggests that they do. In this paper, we exploit the language characteristics of annual reports and offer a nuanced answer. We find that future-focused language is associated with relatively lower corporate...