We present evidence of first impression bias among finance professionals in the field. Equity analysts' forecasts, target prices, and recommendations suffer from first impression bias. If a firm performs particularly well (poorly) in the year before an analyst follows it, that analyst tends to...

Theories of customer–supplier relationships propose that the private information that suppliers have about buyers explains why trade credit arises in the presence of a competitive banking sector. However, there is limited evidence that trade creditors possess private information about the...

Theories of customer supplier relationships hold that the private information of suppliers about buyers explains the use of trade credit even when there is a competitive banking sector. If suppliers possess private information about their buyers, then the buyer's order size and ability to pay on...

The Occupational Safety and Health Administration (OSHA) is decentralized, where individual state-level field offices are responsible for undertaking inspections and sharing case information with other offices. Interviews with compliance officers suggest that this information structure leads to...

A growing literature examines how a firm's behavior impacts the behavior of its peers. In this paper, we examine how changes in tax paying, and the associated financial reporting, impact a firm's peers. Changes to tax paying and reporting behavior at other firms within a peer group can be...

Prior research has documented a substantial “lockout” effect resulting from the current U.S. worldwide tax and financial reporting systems. We hypothesize that foreign firms are tax- favored acquirers because they can avoid the U.S. tax on repatriations. Consistent with this tax advantage,...

US corporations face higher tax burdens than those in many other countries, potentially influencing merger and acquisition activity. A theoretical model of this process yields two testable implications: that, relative to high-tax domestic bidders, low-tax foreign bidders will specialize in both...