GAAP earnings often contain transitory items that can distort firms' investment decisions when a manager cares about … his firm's stock price. Non-GAAP earnings can alleviate investment distortions because they allow the manager to remove … quantify this trade-off by estimating a dynamic model in which the manager makes an investment and a non-GAAP disclosure …

We empirically analyze the nature of returns to scale in active mutual fund management. We find strong evidence of … that avoid econometric biases are insignificant. We also find that the active management industry has become more skilled …