I analyze the behavior of an agent (the manipulator) who makes announcements based on his private information in order to maximize the profit from short-term trades. Truthful announcement strategies can be supported with positive probability but only if investors have another source of information in addition to the manipulator’s announcement and/or if manipulation is occasionally punished. It ...

This paper examines the earnings management behavior of Japanese merger acquirers on the Tokyo Stock Exchange. Most Japanese mergers are transacted via stock swaps, when acquirers have incentive to manage pre-merger earnings to reduce the cost of acquisition. Consistent with this incentive, Japanese acquirers have significantly positive long-term abnormal accruals in the year prior to the merge...

This study focuses on the market reaction to information transfers from economically linked customers. I examine whether investors have limited attention with respect to the information contained in customer earnings announcements for suppliers. Using 1083 unique customer–supplier relationships for the period 1983–2011, I find that the cumulative abnormal returns of a supplier surrounding and f...

Do firms time the release of news in response to investor inattention? We consider news about earnings and analyze the reaction of investors to announcements on Friday and on other weekdays. The announcements have two main effects on stock returns. First, the short-term response to Friday earnings announcements is 20 percent smaller than the response on other days of the week. Second, the post-...

We show that abnormal trading activity increases in the days before earnings announcements, especially for stocks with high dispersion of opinions. Consistent with the theory of Miller (1977) and other disagreement models, for stocks that are also short sale constrained, this increased speculative trading is dominated by net buyer-initiated trading activity. This evidence helps to explain why s...

This thesis comprises of three essays. The first essay is titled ‘Do Acquiring Firms Manage Earnings?’ and is co-authored with Professor Anand M. Vijh. The second essay is titled ‘Do Firms Have a Target Leverage? Evidence from Credit Markets’ and is joint work with Professors Anand M. Vijh and Redouane Elkamhi. The third is essay is single authored and titled ‘Bondholder Wealth Effects of Fraud...

This paper utilizes Chinese stock data to provide further evidence on the power of limited attention theory in explaining post-earnings announcement drift. As retail investors prevail China and they are easily distracted by market swings, we should expect severe problems, resulting larger underreaction firm information higher sensitivity movement, i.e., so-called “market movement effect”. After...

We find large overnight returns with no abnormal variance before nonfarm payrolls, ISM, and GDP announcements, similar to the pre-FOMC returns. To explain this common pattern, we propose a two-risk model uncertainty about magnitude of impending news’ market impact as an additional risk, link pre-announcement return directly accumulation heightened its later resolution prior announcement. empiri...

Using event study methodology and regression analysis method, this had examined quarterly earning announcement its impact on the stock returns. The announcements were divided in to three groups: (1) Good news (quarterly positive earnings announcement), (2) No neutral announcement) (3) Bad negative announcement). result confirmed that both good bad a strong which is significant statistically sha...