We use the estimate of an IPO's intrinsic value derived from its initial price range and the degree to which the overallotment option is exercised to decompose IPO underpricing into a Market Inefficiency and an Underwriter Bias component. The former reflects the difference between the closing...

We investigate the relation between societal trust and managers' decisions to voluntarily issue earnings forecasts. We reason that managers are more (less) likely to issue earnings forecasts in high-trust (low-trust) countries because these voluntary disclosures are viewed by investors as a...

Extant theories suggest that managers may use hedging either to alleviate underinvestment problems caused by costly external financing or to promote overinvestment by circumventing the scrutiny of external capital markets. We empirically investigate this issue using a hand-collected dataset of...

We examine the relation between corporate social responsibility (CSR) performance and conditional accounting conservatism. Drawing upon the stakeholder-engaging and information-enhancing perspectives of CSR activities, we hypothesize that the demand for conditional conservatism, which primarily...

A widely cited finding from Grinblatt et al. (1984) (GMT) is that the market response to the announcement of a small stock distribution is greater than the response to a large one. However, the GMT result does not hold from the early 1980's through the end of the 1990's. We examine whether the...

We investigate the relation between the proportion of total compensation received by CEOs from stock options and the accuracy and bias of analysts' earnings forecasts. We hypothesize that forecast accuracy decreases as the proportion of stock option pay increases. Higher proportions of stock...

We investigate the relations between changes in the precisions of public and private information and changes in market liquidity around earnings announcements. Increases in the precision of public information reduce information asymmetry, whereas increases in the precision of private information...

This study investigates whether bank managers use their discretion in estimating loan loss provisions to convey information about their banks' future prospects. Bank managers' propensities to signal their private information vary cross-sectionally because they face different conditions and have...

The retained earnings hypothesis predicts that stock distributions accounted for by reducing retained earnings are a more credible signal of managerial optimism than stock distributions that do not reduce retained earnings. This study examines the costs of false signaling that are a necessary...