We examine how an industry leader's competitors respond when financial fraud by the leader is publicly revealed. We document evidence of predatory advertising and pricing. Close competitors of the leader step up advertisement spending relative to control firms. Although we do not directly...

We conduct a comprehensive analysis of the rationales proposed in prior studies to explain several well-known characteristic anomalies. Recognizing that only a minority of firms drive these anomalies, we run a statistical leverage analysis to filter out these firms. We then try to forecast the...