Bankruptcy in Groups
In this paper, published in the Review of Accounting Studies and co-authored with William Beaver and Maureen McNichols, Stefano Cascino and Maria Correia, examine bankruptcy within business groups. They find that groups often support distressed subsidiaries to prevent costly within-group insolvencies and, further, that recent regulatory changes in the approval and disclosure of related party transactions are costly for business groups in that they constrain their ability to shield their subsidiaries from credit-risk shocks.
Accounting for Leases and Corporate Investment
In this paper, published in the Accounting Review, Ciao-Wei Chen, Maria Correia, and Oktay Urcan examine the real effects lease-capitalization rules on corporate investments. They show that the introduction of these rules leads to a decrease in investment and that this effect is stronger when learning opportunities are stronger and when firms are financially constrained, consistent with lease capitalization rules affecting investment via a learning channel and a contracting channel.
Memories Lost: A History of Accounting Records as Forms of Projection
In this study, published in Accounting, Organizations and Society, Nadia Matringe and Michael Power argue that the influence of accounting extends beyond mere financial documentation to shape human memory. They compare blockchain and early double-entry bookkeeping and posit that, while blockchain recording holds the potential for democratization, it may lead to divisions between users, among themselves and with their records.
How do Online Conflict Disclosures Support Enforcement? Evidence from Personal Financial Disclosures and Public Corruption
In this paper, published in the Accounting Review, Alexandra Scherf addresses the role of online conflict-of-interest disclosures in anticorruption enforcement. The study highlights the importance of transparency in reducing disclosure acquisition costs for enforcement agents and combating public corruption.
The Bond Market Benefits of Corporate Social Capital
In this paper, published in the Review of Accounting Studies, Hami Amiraslani, Karl Lins, Henri Servaes, and Ane Tamayo investigate whether bondholders view a firms’ social capital and the trust that it engenders favourably. They find that high-social-capital firms benefited from lower bond spreads during the 2008–2009 financial crisis and further that, during the crisis, high-social-capital firms were also able to raise more debt, at lower spreads, and for longer maturities.
Sexism, Culture, and Firm Value: Evidence from the Harvey Weinstein Scandal and the #MeToo Movement
In this study, published in the Journal of Accounting Research, Karl Lins, Lukas Roth, Henri Servaes, and Ane Tamayo assess the valuation effect of an important aspect of corporate culture: gender equality. They exploit the Harvey Weinstein scandal and the subsequent #MeToo movement to assess whether and why investors respond to changes in societal attitudes towards women. The evidence in this study attests to the value of having a non-sexist corporate culture and indicates that changes in societal norms towards women are permeating into capital markets and corporations.
Relative Performance Evaluation and Strategic Peer-Harming Disclosures
In this study, published in the Journal of Accounting Research, Matthew Bloomfield, Mirko Heinle, and Oscar Timmermans explore competitive dynamics in corporate disclosures. They find that CEOs may engage in strategic disclosures that harm competitors and improve their firms’ relative standing within their peer group and hence their relative performance evaluation.
Cash Versus Share Payouts in Performance Plans
In this paper, which is forthcoming in the Accounting Review, Oscar Timmermans examines the determinants and consequences of the form of payout used in relative performance evaluation (cash or shares). The paper’s findings suggest that commonly used share-based relative performance plans might not always motivate managers to pursue innovative projects with high idiosyncratic risk when projects with systematic risk are available.