We present a model and provide empirical evidence showing that auditor quality affects companies' financing decisions, and that better audit quality reduces the impact of market conditions on client financial decisions and capital structure. Consistent with our analytical predictions, we find...

We provide evidence that analyst coverage affects the pattern of security issuance. First, firms covered by fewer analysts are less likely to issue equity as opposed to debt. They issue equity less frequently, but when they do so, it is in larger amounts. Moreover, these firms depend more on...

We examine the impact of financial reporting on corporate innovation. We find that firms that exhibit more conservative financial reporting generate fewer patents. Their patents also result in fewer citations and lower economic benefits. These effects of conservative financial reporting on...