Income reported to shareholders (book income) and income reported to the U.S. Internal Revenue Service (taxable income) are alternative measures of U.S. corporate economic performance discussed in recent research, academic texts, and by U.S. legislators. In measuring economic performance,...

We study the relation between disclosure policy and market liquidity. Our tests examine how two key aspects of market liquidity, the effective bid-ask spread and quoted depth, relate to financial analysts' ratings of firms' disclosure policies. We introduce a method of combining order sizes and...

We find adverse-selection spread components increase sharply in the ratio of trade size to quoted depth, and spike when trade size equals quoted depth. We find two previously documented and prominent indicators of informed trading, raw trade size and high-trading-volume half-hours, offer almost...

This paper examines the association between block ownership and market liquidity. Blockholders are believed to have access to private, value relevant information via their role as monitors of firms' operations. Consistent with this, we find that firms with greater blockholder ownership, either...

We examine whether NYSE/AMEX depth quotes are related to the adverse-selection and inventory-holding-cost components of the spread. Consistent with theory predicting an inverse relation between depths and the risk of informed trading, we find that depth quotes are strongly inversely related to...

Rules implemented by the U.S. Securities and Exchange Commission in 2003 impose additional disclosure and filing requirements on firms publicly disclosing non-GAAP earnings. We find the regulations produced (1) modest declines in the frequency of special- and other-item exclusions, (2) a decline...

We examine commonly used indicators of non-GAAP exclusion quality and find they perform poorly at capturing low-quality (i.e., more persistent) exclusions. Further, low-quality non-GAAP earnings, as identified by any of the indicators used in prior research, are more value relevant than GAAP...

We use the BP, PLC oil spill to provide new evidence regarding the consequences of and motivations for environmental disclosures. We find that among oil and gas firms drilling in U.S. waters, those with greater environmental disclosure suffered smaller negative shareholder wealth effects...