In a recent article, F. Black introduces the concept of noise trading, defin ed as trading on noise as if it were information. He asserts that suc h trading must be a significant factor in securities markets, but doe s not explain why investors would rationally trade on noise. The goal of this...

Over the past several years many researchers have empirically examined the issue of whether or not managerial earnings forecasts are more accurate than those prepared by security analysts. One result commonly found is that managerial forecasts which are released prior to analyst forecasts are at...

A change in auditors is commonly observed in firms which are selling shares nationally for the first time. One impetusfor this is said to come from underwriters who advise their clients to switch from a local to national auditing firm known for higher quality standards in order to receive a...

U.S. stocks have been shown to earn higher returns during earnings announcement months than during non-announcement months. We document that this earnings announcement premium exists across the globe. Moreover, it is not isolated to a few countries. Of the 20 countries with enough data to...

When a firm's management needs to raise external capital in order to finance an investment project, it is likely to have better information about the project's future return than do potential investors. In such a case, as has been shown in the literature, management may be able to signal its...