This study uses a confidential Census sample of 151,900 U.S. manufacturing plant-years from 1974-2011 to investigate the impact of excluding the costs of unused capacity from key financial indicators, namely product costs and gross margins. We estimate the magnitude of unused capacity cost as a...

We examine the effect of second-generation state antitakeover laws (ATLs) on accounting conservatism. We adopt a novel methodology that corrects for selection bias resulting from firms' endogenous incorporation decision. Focusing on the period from when these ATLs became constitutional, we find...