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Earnings Management and the Long-Run Market Performance of Initial Public Offerings
Issuers of initial public offerings ~IPOs! can report earnings in excess of cash f lows by taking positive accruals. This paper provides evidence that issuers with unusually high accruals in the IPO… Expand
Earnings management and the underperformance of seasoned equity offerings
Seasoned equity issuers can raise reported earnings by altering discretionary accounting accruals. We find that issuers who adjust discretionary current accruals to report higher net income prior to… Expand
Are Overconfident CEOs Better Innovators
Using options- and press-based proxies for CEO overconfidence (Malmendier and Tate 2005a, 2005b, 2008), we find that over the 1993-2003 period, firms with overconfident CEOs have greater return… Expand
Driven to Distraction: Extraneous Events and Underreaction to Earnings News
Recent studies propose that limited investor attention causes market underreactions. This paper directly tests this explanation by measuring the information load faced by investors. The "investor… Expand
Limited Attention, Information Disclosure, and Financial Reporting
This paper models firms’ choices between alternative means of presenting information, and the effects of different presentations on market prices when investors have limited attention and processing… Expand
Perceived Auditor Quality and the Earnings Response Coefficient
SYNOPSIS AND INTRODUCTION: An auditor's reputation lends credibility to the earnings report that he audits. An unresolved issue is whether auditor size is correlated with auditor quality, where a… Expand
Are Accruals during Initial Public Offerings Opportunistic?
We find evidence that initial public offering (IPO) firms, on average, have high positive issue-year earnings and abnormal accruals, followed by poor long-run earnings and negative abnormal accruals.… Expand
The Walk-down to Beatable Analyst Forecasts: The Role of Equity Issuance and Insider Trading Incentives*
Security regulators and the business press have alleged that firms play an 'earnings-guidance game' where analysts make optimistic forecasts at the start of the year and then 'walk down' their… Expand
When citing this paper, please use the following: Hirshleifer D, 2014. Title. Annu. Rev. Econ. 7,: Submitted. Doi: 10.1146/annurev-financial-092214-043752
Do Investors Overvalue Firms with Bloated Balance Sheets?
If investors have limited attention, then accounting outcomes that saliently highlight positive aspects of a firm's performance will promote high market valuations. When cumulative accounting value… Expand