We use a dataset of sell-side analysts' scenario-based valuation estimates to examine whether analysts reliably assess the risk surrounding a firm's fundamental value. We find that the spread in analysts' state-contingent valuations captures the riskiness of operations and predicts the absolute...

We investigate whether unpleasant environmental conditions affect stock market participants' responses to information events. We draw from psychology research to develop a new prediction that weather-induced negative moods reduce market participants' activity levels. Exploiting geographic...

In this paper, we explore how reported accounting numbers are shaped by the institutional structure of the country in which firms are domiciled. We seek deeper understanding into the nature of financial reporting incentives created by an economy's institutional structure. We focus on financial...

We investigate corporate transparency, defined as the availability of firm-specific information to those outside publicly traded firms. We conceptualize corporate transparency within a country as output from a multi-faceted system whose components collectively produce, gather, validate and...

Motivated by extant finance theory predicting that insider trading crowds out private information acquisition by outside investors, we use analyst following data for 100 countries for the years 1987-1998, to study whether analyst following increases following adoption of or the initial...

This paper examines whether insider trades reflect the insiders' superior knowledge of future cash flow realizations, as proxied by the firm's future return and earnings performance. We find strong evidence that insider trades are positively associated with the firm's future earnings...

This paper examines the impact of management forecasts on short-term stock return volatility. Two measures of volatility are employed: excess intra-day price volatility and the standard deviation of returns. I find that the average management forecast is followed by heightened volatility in the...

We investigate the extent to which the trading and trade-generating activities of three informed market participants -- financial analysts, institutional investors, and insiders -- influence the relative amount of firm-specific, industry-level and market-level information impounded into stock...

This paper identifies cross-sectional factors that motivate the disclosure of forward-looking earnings information and documents that these disclosures impact market prices by quot;pulling forwardquot; future earnings information. We examine a set of firms facing poor current earnings...

We use a comprehensive sample that comprises essentially all Moody's bond rating changes between 1970 and 1997 to examine the long-run stock returns following the changes. Our main finding is that stocks with upgrades outperform stocks with downgrades for up to one year following the...