We find that similarity of political views between the CEO and independent directors (“political homophily”) encourages the CEO to share adverse information with the board. Firms with higher political homophily have lower stock price crash risk, and are more likely to divest previously...

Are firms' financial disclosure decisions affected by executive compensation at other firms? We find that a CEO's pay gap relative to the highest CEO pay among industry peers, defined as industry tournament incentives, can lead to distortions in corporate financial disclosures. Our analyses show...

We find that newspapers connected to firms through common business group affiliation display a more positive reporting tone than unconnected newspapers. This result is robust to both a DiD approach and controlling for newspaper-firm pair fixed effects. Further, the association between connected...

This paper exploits the 2003 mutual fund trading scandal to investigate firms’ seemingly myopic investment behavior following negative stock price shocks. Firms affected by the scandal are more likely to meet or marginally beat earnings targets by cutting research and development and other...

We examine insider trading profitability and common identity between insiders and top executives. In particular, we argue that common gender and the resultant social connections it creates influence access to private information, where insiders benefit from greater information sharing with top...

There has recently been a relaxation of listing regulations to accommodate and attract firms going public with dual-class shares (DCS), notably in Asia. We examine the value implications of DCS adoption by employing an event study around a regulatory change allowing DCS listings in Hong Kong. We...

Using novel firm- and facility-level measures of corporate environmental performance over the period 2002–2021, we establish a positive association between board gender diversity and corporate environmental performance. For identification, we exploit variations in the legal protection and...

This paper examines racial preferences of shareholders in the context of corporate director elections. Focusing on director nominees receiving negative recommendations from the dominant proxy advisor ISS, we document a higher propensity of mutual fund managers to vote for such nominees who match...

While mutual funds are required to vote on directors in every portfolio firm every year, many funds satisfy this requirement by following the recommendations of proxy advisory service companies such as ISS. However, companies complain that ISS employs one-size-fits-all policies, which do not...

We ask why we observe multiple layers of decision-making in fund management with investors, sponsors, fund managers, and consultants, even if additional decision-makers are costly and do not contribute to superior performance. In our model, an investor hires a wealth manager (“sponsor”), who...