I investigate how the 2011 and 2014 EU stress tests affect the risk-taking of European banks. I document a non-monotonic relationship between banks' risk-shifting resulting from regulatory arbitrage and the tightness of their capital constraint (i.e., the distance between their ex-ante capital...

Although researchers often view earnings management as being widespread, measuring the cost and level of earnings management is a non-trivial task. We derive a measure of earnings management cost and the associated equilibrium level of earnings management from the cross-sectional properties of...

We derive a measure of earnings management cost and the associated equilibrium level of earnings management from the cross-sectional properties of earnings and prices. This approach enables us to separate economic shocks from reporting discretion by modeling the economic trade-off faced by...

Temporary employment contracts are often regarded as 'stepping stones' for workers' careers, because they can help inexperienced workers secure a permanent contract. Our study evaluates whether this stepping-stone function is moderated by the contract duration, exploiting a Dutch policy reform...

This paper studies the reliability of financial reporting when the credibility of the manager, represented by his misreporting propensity, is unknown. We show that credibility concerns affect the time-series of reported earnings, book values, and stock prices in ways that seem consistent with...

Temporary employment contracts are often regarded as ‘stepping stones’ for workers’ careers, because they can help inexperienced workers secure a permanent contract. Our study evaluates whether this stepping-stone function is moderated by the contract duration, exploiting a Dutch policy...