This paper examines whether external auditors play a unique governance role distinct from other mechanisms of corporate governance. We exploit the staggered adoptions of the Universal Demand (UD) laws by U.S states, which have been shown to result in the decline of various corporate governance...

Surprisingly, prior research finds that the attention paid by active institutional investors to individual stocks has no real effects on disclosure and liquidity decisions by management. In contrast, after categorizing these same active institutional investors as either dedicated or transient,...