Asymmetric Disclosure, Noise Trade, and Firm Valuation

Earnings management and firm valuation under asymmetric information

This paper seeks to provide an explanation for why corporate officers manage the disclosure of accounting information. We show that earnings management affects firm value when value-maximizing managers and investors are asymmetrically informed. In equilibrium, the strategic management of reported earnings influences investors' assessments of the market values of companies' shares.

Agency Problems, Firm Valuation, and Capital Structure

This paper studies the optimal contracting problem in a general cashow setup, and offers a framework to quantitatively assess the impact of agency problems. A closed form solution is obtained in the square-root mean-reverting cash ow process. In the geometric Brownian cashow setup, we embed the agency problem into Leland (1994), and nd that the debt-overhang problem lowers the optimal leverage....

Corporate Governance and Firm Valuation in Colombia

Firm Innovation, Productivity, and Trade

Firm innovation effort, productivity, and export propensity are found to be positively correlated with one another. Two alternative explanations have been offered for this — innovation increases productivity and more productive firms self-select into exporting or, alternatively, exporting increases learning and innovation, which in turn affects productivity. We use differences in timing implied...

Resident Networks and Firm Trade*

We demonstrate that simply by using the ethnic makeup surrounding a firm’s location, we can predict, on average, which trade links are valuable for firms. Using customs and port authority data on the international shipments of all U.S. publicly-traded firms, we show that firms are significantly more likely to trade with countries that have a large resident population near their firm headquarter...