We examine how financial reporting transparency and quality of Mexican firms vary with corporate governance. We utilize compliance data from the Code of 'Best' Corporate Practices, disclosed annually by public firms in Mexico. We document a significant increase in compliance over the 2000-2004...

This study examines the influence of Mexico's efforts to improve corporate governance on firm performance and transparency. We utilize compliance data from the Code of lsquo;Best' Corporate Practices, disclosed annually by public firms in Mexico, as a measure of corporate governance strength. We...

The practice of shifting manufacturing activities to lower wage countries has thrived lately as firms attempt to reduce labor and other costs. However, success has been elusive for many of these firms. We investigate the determinants of offshoring success, with emphasis on the role of...

This paper examines the influence of a firm’s business model on the relative persistence of profit margins in the U.S. airline industry. The strategic management literature describes a firm’s business model as reflecting how that firm chooses to compete in the marketplace. Given this linkage...

This study examines how analysts respond to public information when setting their stock recommendations. Specifically, for a sample of stocks that experience large stock price movements, we model the determinants of analysts' recommendation changes. Using an ordered probit model based on all...

This paper presents empirical evidence that cash-flow volatility is negatively valued by investors. The magnitude of the effect is substantial with a 1% increase in cash-flow volatility, resulting in approximately a 0.15% decrease in firm value. We show that this increase, however, is not...

We offer a theoretical framework to help isolate persistence estimates of fundamental earnings innovations from the effects of accounting measurements. We show that a downward bias results when persistence of earnings innovations is estimated using reported earnings. We show that the greater the...

This paper analyzes whether fair value estimates of fund net asset values (NAVs) produced by private equity managers are accurate and unbiased predictors of future discounted cash flows (DCF). We exploit the fact that private equity funds have finite lives to compare reported NAVs to DCFs based...

Academics and practitioners frequently highlight that overall market and industry performance is an important aspect of a firm's profitability. However, few studies allow for the decomposition of a firm's profitability into market, industry, and idiosyncratic components, and those that do often...