This paper studies the interaction among key stakeholders (investors, managers, and auditors) in the corporate behavioral spillover through shared auditors. Upon the release of U.S. Securities and Exchange Commission comment letters on issues relating to the recognition of revenue, gains, and...

We predict and find that regulated firms' mandatory disclosures crowd out unregulated firms' voluntary disclosures. Consistent with information spillovers from regulated to unregulated firms, we document that unregulated firms reduce their own disclosures in the presence of regulated firms'...

Exploiting a novel measure of proprietary information disclosure, this study shows that firms respond to their peer firms’ disclosure of proprietary information. I find that firms increase their voluntary disclosures and their liquidity improves in response to a peer firm's disclosure of...

We document that regulatory enforcement actions for financial misrepresentation cluster in industry-specific waves and that wave-related enforcement has information spillovers on industry peer firms. Waves and spillovers have significant effects on share prices. Early-wave target firms have the...

In this paper, I use a unique law that sets a binding upper limit on financial firms' executive compensation in Israel and study its spillover effects on executive compensation in the non-restricted firms. The results indicate that the legislation created an anchoring effect at the threshold...

I investigate the spillover effects of disclosure requirements imposed by state governments on oil and gas companies operating in the state. Recently, several state governments have begun requiring companies to publicly disclose information about chemicals used in their fracking operations. The...

We find that Sarbanes-Oxley (SOX) had two significant effects on the audit market for nonpublic entities. The first short-run effect stems from inelastic labor supply coupled with an audit demand shock from public companies. As a result, private companies reduced their use of attested financial...

In most European countries, U.S.-owned subsidiaries are required by law to file separate entity financial statements in local GAAP. We use this unique institutional setting to examine whether the Sarbanes-Oxley Act of 2002 (SOX) had a flow-through effect on the earnings quality of local GAAP...

This paper examines how low financial reporting frequency affects investors' reliance on alternative sources of earnings information. We find that the returns of semi-annual earnings announcers (i.e. low reporting frequency stocks, “LRF”) are almost twice as sensitive to the earnings...

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....