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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
Are Overconfident CEOs Better Innovators?
Previous empirical work on adverse consequences of CEO overconfidence raises the question of why firms would hire overconfident managers. Theoretical research suggests a reason, that overconfidence
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
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
Does Investor Misvaluation Drive the Takeover Market?
This paper tests the hypothesis that irrational market misvaluation affects firms' takeover behavior. We employ two contemporaneous proxies for market misvaluation, pre-takeover book/price ratios and
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.
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
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
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