Does mutual fund ownership reduce stock price clustering? Evidence from active and index funds

Review of Quantitative Finance and Accounting - The literature is rich with examples of price clustering in financial markets. This study focuses on the relation between mutual fund ownership (both...     

Targets' Accounting Conservatism and the Gains from Acquisition*

We present evidence on the effects of target firms' accounting conservatism in a merger and acquisition transaction. Conservatism is distinct from other accounting or accrual quality constructs examined in prior work. Its unique features can lead to potential benefits for both the targets and the acquirers. The use of conservatism by targets reduces acquirers' risks of acquiring underperforming assets or overpaying for well-performing assets. In addition, targets' conservatism results in greater production of verifiable information that can help the acquirers better estimate and realize synergies of the combined firm. Consistent with these arguments, we find that firms with greater accounting conservatism are more likely to receive a bid. We also find that targets' conservatism increases the deal premium and the announcement returns of both the targets and the acquirers, respectively. Overall, these results indicate that conservatism provides benefits to both sellers and buyers of equity in an acquisition transaction.     

Intermittent exporting: unusual business or business as usual?

Review of World Economics - We construct an empirically supported definition of incidental and perennial exporting and investigate to what extent incidental exporting is a steady-state of firms, to...