This paper provides an introduction to and a review of governmental capital markets based research. It updates earlier studies and focuses on recent methodological developments. Prior research is classified ac­cording to the type of data used, emphasizing special topics that have received...

The most visible credit market measure of the fiscal health of a municipality is the credit rating. In this article we ask whether the credit rating fully incorporates the fiscal stresses faced by municipal governments. We utilize state "tax effort" as a measure of the fiscal stress faced by a...

Current practice regarding materiality in government audits under generally accepted auditing standards varies widely. In this empirical study, we investigate whether government auditors agree on an appropriate base for calculating materiality and what percentages they apply. In a government...

We provide evidence of the impact of Auditing Standard No. 2 (“AS 2”), issued pursuant to the Sarbanes-Oxley Act of 2002 (“SarBox”), on the outcome of auditors in financial reporting litigation. Specifically, we focus on the existence of financial restatements and how and why they...

We examine whether proprietary costs affect disclosure quality and how investors react to disclosure quality in a new proprietary cost setting. We apply Verrecchia's (1983) proprietary cost theory to the FIN 48 adoption setting and argue that proprietary costs result from beliefs that the new...

I study the role of voluntary reporting by the entrepreneur and monitoring by the funders in improving reward crowdfunding outcomes. Reward crowdfunding is a growing source of funding for entrepreneurs with limited access to traditional financing. The limited regulation in reward crowdfunding...

We examine whether managers’ activities in striving to reach earnings targets affect their firms’ product quality. We find that firms suspected of manipulating real activities in trying to meet earnings benchmarks exhibit a higher likelihood and frequency of product recalls. Other evidence...

We investigate whether information transparency at the industry level is associated with the sustainability of within-industry differences in profitability. Since competitive actions lead to the elimination of intra-industry profitability differences, this investigation provides evidence on...

We examine whether firms’ co-opetition (i.e., simultaneously competitive and cooperative) behaviors in standard-setting organizations (SSOs) affect their public R&D disclosure. We find that relative to matched control firms, firms that participate in SSOs increase their narrative R&D...

We propose that the product life cycle is important in understanding firm disclosure policies and test this hypothesis using a 4-dimensional text-based life cycle model. Mature-stage firms disclose more, consistent with lowering search costs for an outward-focused investment strategy seeking...