This paper examines the relation between annual report boilerplate and firm performance and earnings persistence. Utilizing a neural network algorithm inspired by word2vec, we compute the annual report boilerplate, defined as the average probability of the occurring of each sentence in a given...

As an important indicator of earnings quality, earning persistence is perceived as the reflection of operation management and the quality of internal control. It facilitates the optimization of resource allocation and provides investors valuable insights. Strategy is described as the long-term...

Cybersecurity is a significant concern for businesses worldwide among management, stakeholders, and regulators. In this paper, we explore the spillover effect of customer firms’ data breaches on their upstream supplier firms’ cost management strategies, proxied by cost stickiness, a...

The emergence of large language models (LLMs), such as Generative Pre-trained Transformers (GPTs), presents new interdisciplinary research opportunities for accounting and finance scholars. Unlike standard supervised machine learning (ML) approaches, which require large volumes of labeled data,...

How to quantify the effects of international trade wars has attracted increasing attention from regulators, investors, managers, and policy makers. Adopting a novel machine learning method called word2vec from computational linguistics, this study constructs a text-based measure of trade war...

This study investigates whether and how insider trading in the credit default swap (CDS) market is influenced by the corporate board network, formed by interlocking boards. We find strong evidence that firms with a more centralized position in the board network experience a higher degree of...

We examine the impact of customers' forward-looking disclosures (FLD) contained in the Management Discussion and Analysis section (MD&A) of its 10-K filings on the degree of suppliers' cost asymmetric behavior (i.e., cost stickiness) using computer-intensive techniques. We find that the degree...

In this paper, using news reflected in the stock market as a benchmark for the public information of suppliers, we find significant incremental information revelation in the credit default swap market of the customers. The information revelation is more significant during the periods when either...

In this paper, using newly available CDS positions data compiled from DTCC and the supply chain hierarchical position obtained from networking methodology, we examine whether and how investors can use CDS contracts to manage the heightened operational risk due to upstream supply chain...