In this paper, we use accounting fundamentals to measure systematic risk of distress. Our main testable prediction—that this risk increases with the probability of recessionary failure, P(R|F)—is based on a stylized model that guides our empirical analyses. We first apply the lasso method to...

This paper tests the proposition that politicians and their affiliated firms (i.e., firms operating in their province) temporarily suppress negative information in response to political incentives. We examine the stock price behavior of Chinese listed firms around two visible political events...

We investigate whether unpleasant environmental conditions affect stock market participants' responses to information events. We draw from psychology research to develop a new prediction that weather-induced negative moods reduce market participants' activity levels. Exploiting geographic...

Using textual analyses of 1.8 million articles, this paper examines whether the authoritarian government in China, despite its direct ownership and control of the press, manages to increase the diversity of corporate news through commercialization and conglomeration reforms. Through the creation...

We use a dataset of sell-side analysts' scenario-based equity valuation estimates to examine whether analysts can assess the state-contingent risk surrounding a firm's fundamental value. We find that the spread in analysts' scenario-based valuations captures the riskiness of operations and...

We examine whether an anticipated reduction in future repatriation taxes affects the amount of cash U.S. multinationals hold overseas. We find that the expected benefits of a repatriation tax reduction are positively associated with accelerated accumulations of global cash holdings once Congress...

We document that the relative placement of analysts' target price within their subjective distribution of scenario-based valuations for the covered firm (i.e., tilt) is informative to investors. When analysts forecast price appreciation, tilt incrementally predicts ex post valuation errors and...