We investigate the relevance of accounting information for bondholders. Our results imply that the credit markets access the firm's default information through accounting signals. This information is reflected through cash flow (CF) and discount rate (DR) news. Specifically, the sensitivity of...

We decompose the accrual premium and study its components in the debt and equity markets. We show that the importance of each accrual component depends on the sample and the type of market considered. The short-term accruals component is primarily observed in equity markets, among small and...

In contrast to prior equity market results, we document that corporate bonds issued by low profitability firms outperform bonds issued by highly profitable firms. This performance difference is primarily driven by low profitability, low credit rating firms. This profitability premium is...

This paper reevaluates the cross-sectional effect of institutional ownership on idiosyncratic volatility by conditioning on institutions' investment horizon. Prior literature establishes a positive link between growing institutional ownership and idiosyncratic volatility. However, this effect...

A widely held view among policymakers, corporate executives and the media is that short-termism among institutional investors is increasingly prevalent. However, some institutional investors are increasingly vocal about taking a long-term approach, and these investors care about environmental,...

Firms that misreport financial information pay greater spreads on new bank loans for at least six years following restatement of the misreported information, whether benchmarked against their pre-restatement loans or similar loans of matched non-misreporting firms. Misreporting firms are more...

Suppliers that are farther away from their customers make more relationship-specific investments (RSI). This association is more pronounced when it is less costly for the customer to switch to alternative suppliers and when the supplier operates in relatively opaque information environments....