ABSTRACT This study exploits the staggered adoption of inevitable disclosure doctrine (IDD) by U.S. state courts as an exogenous shock that generates variations in proprietary costs disclosure. We find firms respond to IDD reducing level regarding their customers’ identities, supporting cost hypothesis. Our results are stronger for industries with a higher degree entry threats, more volatile industries, and lower external financing dependence. Overall, this represents one first efforts...

Abstract We examine how information-processing cost affects investors’ acquisition of firm-specific information using a natural experiment resulting from recent mandate requiring U.S. firms to adopt eXtensible Business Reporting Language (XBRL) when submitting filings the Securities and Exchange Commission (SEC). XBRL make financial data standardized, tagged, machine readable. find that adoption reduces firms’ stock return synchronicity. The reduction in synchronicity mainly applies under...

ABSTRACT We examine efficiency improvement associated with audit firm mergers. Our analysis is made possible by a unique dataset of hours in China. find significant reduction hours, unaccompanied deterioration quality, merged firms. Further, we larger when acquirers are Chinese domestic Big 10 firms and client more complex. These results consistent the notion economies scale arising from horizontal However, enhanced does not necessarily reduce fees. Instead, an increase fees international 4...

ABSTRACT We document peer effect as an important factor in determining corporate voluntary disclosure policies. Our identification strategy relies on a discontinuity the distribution of institutional ownership caused by annual Russell 1000/2000 index reconstitution. Around threshold index, top 2000 firms experience significant jump compared with their closely neighbored bottom 1000 due to funds' benchmarking strategies. The increase and resultant improvement information environment create...

Measuring the economy-wide effects of a revolutionary technology such as Generative AI is challenging, because no economy would experiment with suspending access to critical innovation. Except that, on March 31st, 2023, Italian data protection authority found that ChatGPT violated laws, banning service in Italy. Access was restored April 28th, after privacy concerns were addressed. Relative matched sample European firms, publicly-traded companies declined by 1.4% (2.5%) over 3-day period...

ABSTRACT We investigate the role of financial analysts in product quality failures. Relying on information about recalls, we first show that analyst coverage average reduces quality, particularly when managers face greater short-term pressure from institutional investors. However, after identifying a subgroup who raise questions product-related issues earnings conference calls, find by these “product analysts” enhances rather than compromises quality. Firms with are also more likely to...

We advance a multistakeholder framework that highlights the influence of stakeholders in tempering short-termist responses to capital market pressures. When firms face pressure from short sellers market, they sometimes shift attention short-term stock performance and neglect critical investments pay off long run. Relying on quasi-natural experiment establishment-level data workplace injuries, we find short-selling causes an increase employee injuries. Critically, however, degree which...

To explore the mechanism of Qingda Granules (QDG) for alleviating brain damage in spontaneously hypertensive rats (SHRs). Twelve 5-week-old SHRs were randomized into SHR control group and SHR+QDG treated with QDG by gavage at daily dose 0.9 g/kg 12 weeks. The rats, along 6 age-matched WKY saline only. Blood pressure changes monitored, pathologies neuronal apoptosis cerebral cortex examined HE staining TUNEL staining. Cerebral cortical expressions miR-124 STAT3 mRNA detected using RT-qPCR,...

XBRL filing reduces investors' information processing cost. We find that adoption results in a significant reduction firms' cost of equity capital and this effect is stronger firms with small size, high growth, low analyst coverage illiquid stocks. also show experience an increase coverage, forecast accuracy decrease dispersion after adoption. Further, improves stock liquidity. Finally, the on capital, behavior liquidity weaker for voluntary filers than mandatory filers. In sum, we provide...

Abstract We find that mortgage loans originated after the adoption of inevitable disclosure doctrine (IDD; a mechanism discouraging loan officers’ labor mobility) have lower default probability, higher modification rate, and foreclosure rate. These effects are unaccompanied by any reduction in supply contribute to more stable housing prices. Using Uniform Trade Secrets Act as an alternative identification generates consistent results. Overall, our findings suggest restricting mobility leads...

Using detailed information on establishments owned by U.S. public firms from 1990 to 2012, we show that higher abnormal temperatures over the previous five years in a county lead significant reduction local employment and number of establishments. The decline is larger for non-tradable sectors consumer services retailing industries, when managers are likely care more about global warming. In addition, find located abnormally hot counties seek hire new workers with greater education IT...

We investigate whether a sentiment effect arising from poor air quality impacts stock prices. find little evidence suggesting that local directly affects However, we show the index (which is increasing in pollution) relative to of Beijing negatively apply discontinuity design focuses on observations with falling narrow band around zero and consistent result. Additional analysis uncovers small subsequent reversal returns response quality. Further, also associated trading volume. Finally,...

This paper investigates the effect of direct lending by government owned banks (GOBs) on corporate investment for publicly traded industrial firms in Japan, during financial crisis the1990’s. We find that increases GOB have a strong incremental impact investment, especially more credit constrained firms. The are consistent with an efficient lending. Our results show intervention GOBs can be effective mitigating constraints and stimulating crisis.

ABSTRACT This study examines the effect of banking market consolidations via mergers and acquisitions (M&As) on role banks in intermediating corporate tax planning through offshore haven operations. We find that bank clients significantly increase their operations after are merged with others. In addition, such an is greater when a commercial merges investment have opportunities. also employ network analyses to show propensity for client expand its into new country increases relationship...