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We use data on individual investors' stock holdings and retail trades to investigate whether corporate tax avoidance affects the willingness of individual investors to own stock. Consistent with corporate tax avoidance increasing the perceived risk of owning stock and the costs of processing...
Persistent link: https://www.econbiz.de/10012854648
Over the last decades passive investment products have continuously increased in importance. The efficiency of financial markets is often identified as the main reason for this development. We propose a theoretical framework which reverses the causality by showing that market efficiency might...
Persistent link: https://www.econbiz.de/10012936333
Investors have a finite capacity to organize all information they receive from financial disclosures. In a model of rational inattention, we show that investor attention capacity affects the probability of disclosure. In the model, an informed firm makes a strategic voluntary disclosure subject...
Persistent link: https://www.econbiz.de/10012825779
Using survey data from a sample of senior investment professionals from mainstream (i.e. not SRI funds) investment organizations we provide insights into why and how investors use reported environmental, social and governance (ESG) information. Relevance to investment performance is the most...
Persistent link: https://www.econbiz.de/10012854598
Cohen, Malloy, and Nguyen (2020) show that year-over-year changes in annual and quarterly reports of US firms significantly predict future returns: ”changers” generate negative alpha and underperform ”no changers” considerably. I replicate this anomaly for an updated and investable...
Persistent link: https://www.econbiz.de/10013245036
We investigate whether investors are misled by firms that exclude particular expenses in calculating non-GAAP earnings in order to beat analysts' earnings forecasts. Our empirical analyses suggest that firms that pursue a strategy of non-GAAP reporting to beat analysts' earnings forecasts not...
Persistent link: https://www.econbiz.de/10012864015
’ resource allocation decisions? This paper uses the Accounting Standards Update (ASU) 2016-01, which requires public firms to …
Persistent link: https://www.econbiz.de/10013305641
We model a financial market in which companies engage in strategic financial reporting knowing that investors only pay attention to a randomly drawn sample from firms' reports and extrapolate from this sample. We investigate the extent to which stock prices differ from the fundamental values,...
Persistent link: https://www.econbiz.de/10012859843
Persistent link: https://www.econbiz.de/10003832444
and by relying on theories of mental accounting for our predictions. Results of two experiments demonstrate that taxpayers … losses. The results are consistent with a mental accounting application of prospect theory in which risk preferences in one …
Persistent link: https://www.econbiz.de/10013116233