We present new evidence on debt covenant violation (DCV) consequences that have not previously been examined in the literature. In particular, we show that a DCV triggers significant information asymmetry and uncertainty on the part of shareholders and auditors as reflected in higher bid-ask...

Corporate governance systems exist to discourage self-interested behavior. One question that is often overlooked is how extensive these systems should be. A look at corporate governance today suggests that self-interest is high because companies are compelled - by regulators and the market - to...

We document a strong relation between aggregate corporate investment and direct stock market risk measures. Consistent with the investment-based asset pricing model, the comovement with the proxies for conditional equity premium fully accounts for aggregate investment's predictive power for...

We document a strong relation between aggregate corporate investment and direct stock market risk measures. Consistent with the investment-based asset pricing model, the comovement with the proxies for conditional equity premium fully accounts for aggregate investment's predictive power for...

Earnings manipulations are often revealed with significant lag. This usually entails dramatic share price' slide. Therefore investors should avoid/buy stocks with low/high earnings-quality. However, given the shortcomings of auditing, using this strategy requires application of the other (then...

This study takes on two divergent notions concerning derivatives; that they are dangerous instruments (Warren Buffet) versus the concept that they help to reduce risk (Allen Greenspan). These notions are assessed from the perspective of the recent Financial Crisis in which derivatives were...

I document evidence that financial statement comparability curbs the incorporation of firm-specific information into stock prices, resulting in higher stock price synchronicity in China. The positive comparability-synchronicity relationship is more pronounced when firms operate in culturally...

Since a regulatory change in 1982, stock buybacks- the action of companies purchasing their own stock- have become an increasingly popular use of cash amongst publicly traded companies, eclipsing dividend payments and rivaling capital expenditure. The merits of conducting large-scale buyback...

Information processing filters out the noise in data but it takes time. Hence, low precision signals are available before high precision signals. We analyze how this feature affects asset price informativeness when investors can acquire signals of increasing precision over time about the payoff...

We study the economic determinants of the information externality suppliers experience at the time of their customers' quarterly earnings announcements (QEAs). We measure the information externality as suppliers' stock price reaction to their customers' QEAs. We expect information externalities...