Based on a difference-in-differences approach, we find strong evidence that the initial enforcement of insider trading laws improves capital allocation efficiency. The effect is concentrated in developed markets and manifests shortly after the enforcement year. Cross-sectional analyses show that...

Executive pay disparity, as measured by CEO pay slice (CPS), is positively associated with the implied cost of equity, even after controlling for other determinants of the cost of equity. The difference in the cost of equity can explain 43% of the difference in the valuation effect attributable...

Using a difference-in-differences approach, we find that firms’ cash holdings significantly increase after announcements of irregularity-related restatements. The increase is more pronounced for firms with a higher precautionary saving demand. The irregularity firms significantly reduce...

Several studies document a robust negative association between net external financing and average stock returns, which is referred to as the external financing effect. Using total asset growth as a comprehensive measure of overall corporate investment and total profitability gross of R&D...

Several studies document a robust negative association between net external financing and average stock returns, which is referred to as the external financing effect. Using total asset growth as a comprehensive measure of overall corporate investment and total profitability gross of Ramp;D...

Exploiting the staggered establishment of public audit oversight boards (POBs) worldwide and employing a difference-in-differences methodology, we find that patents and patent citations increase significantly following the implementation of public audit oversight. This is especially so in client...