In this study, we examine the association between the initiation of credit default swaps (CDS) trading and firms' earnings management behavior. Since CDS contracts help creditors transfer credit risk, creditors tend to be tough in debt renegotiations. Anticipating tough creditors, CDS firms may...

Agency theory predicts that tighter monitoring can motivate managers to exert higher effort. However, psychology theory suggests that managers may perceive increased monitoring as an indication of distrust, thereby reducing their effort level--known as a crowding-out effect. Prior research on...

Agency theory predicts that tighter monitoring can motivate managers to exert higher effort. However, psychology theory suggests that managers may perceive increased monitoring as an indication of distrust, thereby reducing their effort level -- known as a crowding-out effect. Prior research on...

We examine whether a stock price spillover effect spreads through the method of listing or country of origin and whether this spillover effect changes when investor sentiment shifts. Using a sample of fraud allegations against Chinese companies that became public through reverse mergers (CRMs),...

This study investigates the association between cost rigidity and managerial ability. Cost rigidity refers to the percentage variation in costs relative to the percentage variation in sales, which can be captured by the relative proportion of fixed and variable costs. Traditional management...

This paper examines how disclosures regarding internal controls, required by Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 (SOX), affect the market for corporate control. We hypothesize that acquirers with internal control weaknesses (ICWs) make suboptimal acquisition decisions based on...