Using novel data from executive deferred compensation, this paper presents new evidence on the relationship between CEO risk preference and firm risk (the volatility of firm performance measures such as stock return, earnings and operating cash flows). My results show a negative association...

To gain a better understanding of how fluctuations in output influence firms' decision to hire temporary workers, the authors examine the relationship between output volatility and the use of temporary labor. They find that, all things being equal, temporary employment is higher in states with...

This study examines whether the term of the auditor-client relationship (i.e., auditor tenure) is associated with future stock price crash risk measured both ex ante and ex post. Using a large sample of U.S. public firms with Big Four auditors, we find robust evidence that auditor tenure is...

This study addresses whether an auditor change (a resignation or a dismissal) mitigates information asymmetry as measured by market liquidity or trading activity. For auditor dismissals our results show no effect on our sample firms' market liquidity or trading activity. By contrast, for auditor...

This paper introduces a new rationale for the existence of "Directors' and Officers'" (D&O) insurance. We use a model with volatile stock markets where shareholders design compensation schemes that incentivize managers to stimulate short-term increases in stock prices that do not maximize long...

This study examines the stock price reaction to the information content of bonus issue with the view of the Srilankan Stock Exchange is semi-strong efficient or not. The period of the study is January 2003 to April 2007. Sample of 67 bonus issues made by both financial and non-financial sector...

We analyze the association of board size and stock return volatility for different firm types. First, we find significant evidence that the association is non-linear over all firms. Second, we find that this differs for different firm types. While complex firms show a negative linear...

We present a simple discrete-time version of the continuous-time agency model under mean-volatility joint ambiguity uncertainties, which conveniently captures a number of important properties of optimal contracts without having to rely on complex continuous-time mathematical issues. The...