Long-run Accounting Conservatism and subsequent equity returns

Endogenous Events and Long Run Returns

We analyze event abnormal returns when returns predict events. In …xed samples we show that the expected abnormal return is negative and becomes more negative as the holding period increases. Asymptotically, abnormal returns converge to zero provided that the process of the number of events is stationary. Non-stationarity in the number of events process is needed to generate a large negative bi...

Increasing Returns and Long-Run Growth

This paper presents a fully specified model of long-run growth in which knowledge is assumed to be an input in production that has increasing marginal productivity. It is essentially a competitive equilibrium model with endogenous technological change. In contrast to models based on diminishing returns, growth rates can be increasing over time, the effects of small disturbances can be amplified...

Initial public offerings , subsequent seasoned equity offerings , and long - run performance : Evidence from IPOs in Germany

Accounting Conservatism and Real Options

I address the interaction between accounting conservatism and real options in both a staged investment and abandonment model. An accounting policy biased towards classifying a Good (Bad) project as Bad (Good) is conservative (aggressive). The accounting signal is optimally conservative when the ex ante unconditional expected terminal value is less than the second investment (staged investment) ...

Is Accounting Conservatism Due to Debt or Equity Markets? An International Test of “Contracting” and “Value Relevance” Theories of Accounting

Acknowledgments We gratefully acknowledge the comments of Sudipta Basu, Christian Leuz and Jerry Zimmerman, the referee, and workshop participants at the Universities of Amsterdam and Chicago. We are grateful for financial support from the University of Chicago, Graduate School of Business. Abstract We provide a simple test of " costly contracting " and " value relevance theories " of accountin...