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作者：Nallareddy, Suresh; Sethuraman, Mani; Venkatachalam, Mohan
作者单位：Duke University; Cornell University
摘要：This paper reconciles conflicting evidence in prior literature on the relative ability of earnings and cash flows in predicting future cash flows. Further, we investigate the implications of temporal shifts in accrual properties and operating environment for cash flow predictability. Three key insights emerge. First, cash flows consistently outperform earnings in predicting future cash flows. Second, accruals and its components, including those capturing non-articulating events, have increment...
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作者：Sutherland, Andrew G.
作者单位：Massachusetts Institute of Technology (MIT)
摘要：Costello, Down, and Mehta (2020) trace their slider intervention to deviations from the credit line amount recommended by a credit scoring model. The deviations are followed by larger delinquency declines and bigger sales orders, and Costello et al. interpret these results using discretion-based theories. However, incremental deviations are concentrated on newer clients rather than those the lender has accumulated soft information about. Deviations also appear larger for public than private bo...
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作者：Friedman, Henry L.; Hughes, John S.; Michaeli, Beatrice
作者单位：University of California System; University of California Los Angeles
摘要：We study how the potential for discretionary disclosure affects the way a firm designs its reporting system. In our model, the firm's primary but nonexclusive concern is to induce beliefs that exceed a threshold. Such thresholds arise in numerous contexts, including investing decisions, liquidation/continuation choices, covenants, audits, impairments, listing requirements, index inclusion, credit ratings, analyst recommendations, and stress tests. The optimal reporting system is characterized ...
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作者：Holthausen, Robert W.; Core, John E.; Hanlon, Michelle; Guay, Wayne; Wu, Joanna; Lang, Mark
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作者：Larcker, David F.; Watts, Edward M.
作者单位：Stanford University; Stanford University
摘要：In this study, we investigate whether investors are willing to trade off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, states and other governmental entities have issued over $23 billion of green bonds to fund eco-friendly projects. Comparing green securities to nearly identical securities issued for non-green purposes by the same issuers on the same day, we observe economic...
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作者：Costello, Anna M.; Down, Andrea K.; Mehta, Mihir N.
作者单位：University of Michigan System; University of Michigan; University of Toronto; University Toronto Scarborough; University of Toronto
摘要：We assess the role of human discretion in lending outcomes using a randomized, controlled experiment. The lenders in our sample utilize a third party, machine-generated credit model as an input in their decision. We design a new feature for the credit-scoring platform - the slider feature which - invites lenders to incorporate additional discretion in their decision by adjusting the machine-based recommendation. We compare the loan outcomes for treatment lenders that randomly get the slider, r...
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作者：Mehta, Mihir N.; Zhao, Wanli
作者单位：University of Michigan System; University of Michigan; Renmin University of China
摘要：We document that corporate financial misconduct has significant consequences for politicians' election outcomes and, in particular, those politicians that serve on U.S. congressional committees with SEC-relevant oversight responsibilities (SEC-relevant politicians). These politicians display a 31% greater likelihood of losing a reelection campaign after a local firm faces SEC enforcement for financial misconduct. We also document that SEC-relevant politicians appear to influence the SEC to lim...
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作者：Beatty, Anne; Liao, Scott
作者单位：University System of Ohio; Ohio State University; University of Toronto
摘要：Based on a linear provision/charge-off association and V-shaped scatterplots of these variables against nonperforming loan changes, Basu et al. (2020) argue that nonperforming loan changes mis-measure credit quality and linear provision models are mis-specified. They conclude that residual asymmetry controlling for charge-offs results from loan heterogeneity and the real estate crisis. Using additions to nonaccruals to measure credit quality, we find a linear association with provisions, that ...
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作者：Goex, Robert F.; Hemmer, Thomas
作者单位：University of Zurich; Rice University
摘要：We study how friendly boards design the structure of optimal compensation contracts in favor of powerful CEOs. Our study yields unexpected results. First, powerful managers receive higher pay and a contract with a higher pay-performance sensitivity (PPS) if firm performance is low and vice versa. Moreover, we identify conditions where expected pay and expected PPS are both increasing in the friendliness of the board. Second, we show that friendly boards provide managers with higher salaries, m...
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作者：Nallareddy, Suresh
作者单位：Duke University
摘要：Bhojraj, Mohanram, and Zhang (2020) examine how the presence of different types of Exchange Traded Funds (ETFs) affects information transfer across firms. Using earnings announcements as an information event, the authors document that sector ETFs improve informational efficiency by better facilitating information transfer across firms. Furthermore, sector ETFs reduce post-earnings announcement drift. However, the findings using broad ETFs are mixed. In this discussion, I first place the paper ...
