Financial scholars who research the initial underpricing and long-term underperformance of IPOs generally attribute these phenomena to information asymmetry and investors' misevaluations. Here, we identify, on a sample of 2,696 US IPOs issued during 1980-1995, a widespread source of information...

A key question concerning socially responsible corporate activities is whether such actions achieve traditional goals, such as profit maximization and shareholder value creation, or whether such activities represent a drain on resources by opportunistic managers. Much of the debate about the...

Estimates and projections are embedded in most financial statement items. These estimates potentially improve the relevance of financial information by providing managers the means to convey to investors forward-looking, inside information (e.g., on future collections from customers via the bad...

A key question concerning socially responsible corporate activities is whether such actions achieve traditional goals, such as profit maximization and shareholder value creation, or whether such activities represent a drain on resources by opportunistic managers. Much of the debate about the...

We hypothesize that the root cause of many goodwill write-offs - managers' public admission of ill-advised corporate acquisitions - is the overpriced shares of buyers at acquisition. Overpriced shares provide managers with strong incentives to invest, and particularly to acquire businesses, even...

We examine future excess returns, earnings variability and stock volatility of Ramp;D Leaders and Followers. Drawing on the business strategy literature, which makes a clear distinction between Ramp;D Leaders and Followers, we show that Ramp;D Leaders do earn significant future excess returns,...

The immediate expensing of Ramp;D expenditures is often justified by the conservatism principle. However, no accounting procedure consistently applied can be conservative throughout the firm' life. We ask the following questions: (a) When is the expensing of Ramp;D conservative and when is it...

A paper presented at the July 2002 conference Economic Statistics: New Needs for the Twenty-First Century, cosponsored by the Federal Reserve Bank of New York, the Conference on Research in Income and Wealth, and the National Association for Business Economics

This study documents an association between change in institutional ownership during a calendar quarter and abnormal returns at the time of the subsequent announcement of quarterly earnings. The result is driven by the portfolio returns of the extreme deciles of changes in institutional...

The accruals anomaly - the negative relationship between accounting accruals and subsequent stock returns - has been well documented in the academic and practitioner literatures for almost a decade. To the extent that this anomaly represents market inefficiency, one would expect sophisticated...