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作者：Wang, Feifei; Yan, Xuemin Sterling; Zheng, Lingling
作者单位：University System of Ohio; Miami University; Lehigh University; Renmin University of China
摘要：Previous studies find mixed evidence on whether institutional investors exploit capital market anomalies. Examining a large sample of accounting-based anomalies, we find that institutions trade in the wrong direction of overreaction anomalies, but in the right direction of underreaction anomalies. These heterogenous trading patterns, rather than reflecting institutions' differential anomaly trading skills, can be simply explained by institutions' tendency to trade in the same direction as the ...
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作者：Bonsall, Samuel B.; Gillette, Jacquelyn R.; Pundrich, Gabriel; So, Eric
作者单位：Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Massachusetts Institute of Technology (MIT); State University System of Florida; University of Florida
摘要：We provide the first evidence of systematic bias among an emerging type of credit rating agency that relies on subscriptions from institutional clients as its primary source of revenue. Using data from Egan-Jones Ratings Company (EJR), a representative subscriberpaid rating agency, we show that EJR issues more optimistically biased credit ratings, less timely downgrades, and less accurate ratings for firms held by more EJR clients. Our evidence is consistent with EJR optimistically biasing its...
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作者：Kitto, Andrew R.
作者单位：University of Massachusetts System; University of Massachusetts Amherst
摘要：This study examines whether recent mergers between small and midsize accounting firms influence competition by increasing the number of firms that can compete with larger rivals in the U.S. public company audit market. I find that in-market mergers generate efficiencies that are reflected in a post-merger reduction in audit hours but not in reduced audit quality. For both in-market and out-of-market mergers, clients switching to postmerger firms are more likely to be accelerated filers and are...
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作者：Abramova, Inna
作者单位：University of London; London Business School
摘要：Using labor supply shocks from the 150-Hour Rule, I find that a reduction in the labor supply of accountants increases audit firms' mergers and acquisitions (M&A) and the audit market concentration. These M&A deals connect audit firms serving clients in the same states and lead to greater industry specialization of the merging firms. Although both small and large auditors generally engage in labor supply-driven M&A deals, large audit firms' engagement in M&A is restricted to markets with a tig...
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作者：Vanhaverbeke, Steven; Balsmeier, Benjamin; Doherr, Thorsten
作者单位：KU Leuven; University of Luxembourg; Leibniz Association; Zentrum fur Europaische Wirtschaftsforschung (ZEW)
摘要：When firms are forced to publicly disclose financial information, credit rating agencies are generally expected to improve their risk assessments. Theory predicts such an information quality effect but also suggests an adverse reputational concerns effect since credit analysts may become increasingly concerned about alleged rating failures. We empirically examine these predictions using a large-scale quasi-natural experiment in Germany, where a new compliance regime required firms to disclose ...
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作者：Arif, Salman; Donovan, John; Gopalan, Yadav; Morris, Arthur
作者单位：University of Minnesota System; University of Minnesota Twin Cities; University of Notre Dame; Indiana University System; IU Kelley School of Business; Indiana University Bloomington; Federal Reserve System - USA; Federal Reserve Bank - St. Louis; Hong Kong University of Science & Technology
摘要：We provide the first evidence that prudential principles shape bankers' executive compensation, a phenomenon we call pay for prudence (PfP). We conjecture that PfP incentivizes bankers to balance shareholders' preference for risk with regulators' preference for prudence. Although PfP terms are often used in bank compensation contracts, we find that the use of detailed and concrete PfP terms are positively associated with equity incentives for risk-taking. Furthermore, detailed and concrete PfP...
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作者：Defond, Mark; Li, Zengquan; Wong, T. J.; Wu, Kaiwen
作者单位：University of Southern California; Shanghai University of Finance & Economics
摘要：Prior research finds that auditors' social connections with their clients harms audit quality. We examine auditors' social connections with members of their clients' business community, a setting in which auditors' connections may improve audit quality. While social ties within a client's business community should improve auditor competency, they also threaten auditor independence. We test the effects of auditors' network connections audit quality using data from China, where data on social co...
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作者：Jiao, Yawen
作者单位：University of California System; University of California Riverside
摘要：Prior literature shows decision fatigue reduces analysts' forecast accuracy. We study whether analysts strategically manage their decision fatigue. Firms within an analyst's research portfolio can differentially affect the analyst's reputation and career, with larger firms with greater trading volumes and institutional ownership being more important. We find that analysts choose to issue forecasts for more important firms when they are less decision fatigued, i.e., when the number of prior for...
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作者：Mkrtchyan, Anahit; Sandvik, Jason; Xu, Da
作者单位：University of Massachusetts System; University of Massachusetts Amherst; University of Arizona; Tsinghua University
摘要：We examine employee responses to CEO activism, the increasingly common practice of CEOs taking public stances on socio-political issues. CEO activism may bolster employees' identification with their organizations and strengthen shared beliefs among employees. Alternatively, CEO activism may alienate employees if CEO stances contrast with employees' ideologies. We find that employee satisfaction is higher when CEOs engage in activism that is aligned with employees' ideologies. Furthermore, firm...
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作者：Birru, Justin; Gokkaya, Sinan; Liu, Xi; Markov, Stanimir
作者单位：University System of Ohio; Ohio State University; University System of Ohio; Ohio University; Ohio State University; University System of Ohio; Miami University; University of Texas System; University of Texas Dallas
摘要：Sell-side quantitative equity research analysts (Quants) conduct econometric analyses of stock returns to uncover market anomalies and assist equity analysts and institutional clients with stock selection. We present novel evidence that establishes their role in helping analysts and mutual fund clients discover market anomalies and capital markets evolve toward greater pricing efficiency. Specifically, we find that analysts and mutual fund clients with greater access to Quants make recommendat...
