We show that information complementarities play an important role in the spillover of transparency shocks. We exploit staggered revelation of financial misconduct by S&P500 firms and find that the implied cost of capital increases for “close” industry peers relative to “distant” peers....

We examine how an industry leader's competitors respond when financial fraud by the leader is publicly revealed. We document evidence of predatory advertising and pricing. Close competitors of the leader step up advertisement spending relative to control firms. Although we do not directly...

We investigate how suppliers adjust their innovation activities when a customer is revealed involved in corporate fraud. We find that suppliers reduce R&D expenses after financial misconduct of the customer become known and generate fewer patents in comparison to a control group of firms that...

We show that influential stakeholders can distort corporate policies when they cannot commit to a long-term relationship. Following the revelation of financial fraud by a major customer, suppliers surprisingly outperform a control group in terms of sales growth, Tobin’s Q and survival...

This exercise offers an innovative learning mechanism to model economic agent's decision-making process using a deep reinforcement learning algorithm. In particular, this AI agent is born in an economic environment with no information on the underlying economic structure and its own preference....