Rating Agency Disagreement on Sovereign Debt Levels

SSRN Electronic Journal · 2026-01-01

Insider Trading After the 2022 Rule 10b5-1 Amendment

SSRN Electronic Journal · 2025-01-01 · 1 citations

What board-level control mechanisms changed in banks following the 2008 financial crisis? A descriptive study

Accounting Organizations and Society · 2025-05-21

Rethinking the Value and Emission Implications of Green Bonds

Management Science · 2025-09-18 · 4 citations

Our analysis of green bonds issued between 2013 and 2022 reveals a distinctive shareholder preference for such assets, particularly among financial institutions. In the secondary market, the green bonds issued by financial firms’ trade at a “greenium” of 8.2 basis points compared with matched samples, which is attributed potentially to the financial firms’ efforts in channeling funds to green loans. Past work documenting a positive stock price reaction to the issuance of green bonds is isolated to financial firms and to specific issuers. Issuers of green bonds with higher emissions before the green bond issue report an insignificant reduction in such emissions after issuance. Our analysis of the sustainable lending practices of these gatekeepers reveals that the greenium earned in the green bond market does not translate to the green loan market. Furthermore, the borrowers’ performance remains unchanged in the short term, indicating a lack of due diligence by the gatekeepers. This study underscores the complex relationship between financial markets and environmental stewardship. This paper was accepted by Ranjani Krishnan, accounting. Funding: The authors acknowledge financial assistance from Columbia Business School, Fordham University, Harvard University (Program on Corporate Governance), and MIT Sloan (Sustainability Initiative). Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.00961 .

Mandatory US Subsidy Disclosures: Early Evidence

SSRN Electronic Journal · 2025-01-01

Firms’ Stock Prices, Stock Returns, and Remaining Lifetime Earnings

Management Science · 2025-11-19

We document the disconnect between earnings expectations as captured in stock prices and the ultimate realization of earnings over long periods. To do so, we compare firms’ stock prices on the first trading day and the beginning of each year to the realized earnings over their remaining lifetime (RLTEP ratio). We document that the RLTEP ratio, averaged over long periods and over 15,000 U.S. domestic public firms, approximates one, suggesting that expectations match actuals in the aggregate. However, most firms fail to deliver an RLTEP ratio greater than one. Acquisition prices are the largest contributors to the RLTEP ratio, with many surviving firms failing to generate enough earnings even after operating for between 15 and 45 years. The RLTEP ratio for survivors is positively associated with the future RLTEP ratio, future lifetime wealth creation, and future lifetime stock returns. Significant returns-based wealth creation by firms in the short term does not persist in the long term unless it is supported by fundamental wealth creation (high past RLTEP ratio). This paper was accepted by Eric So, accounting. Funding: Financial support from SC Johnson Graduate School of Management, Cornell University, Columbia Business School, Columbia University, Binghamton University School of Management, and Haskayne School of Business, University of Calgary is gratefully acknowledged. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2022.03251 .

Economic Substance Behind Texas Political Anti-ESG Sanctions

Management Science · 2025-08-11 · 3 citations

A stark contrast exists between the stated preferences of politicians in the so-called blue states (Democrats) and those in red states (Republicans) on environmental, social, and governance (ESG) matters. We examine whether these polarized political stances are reflected in the investment strategies of respective states’ pension funds. We examine a Texas directive that the state agencies divest from investment companies that profess a pro-ESG stance and allegedly “boycott” energy stocks. We find that funds banned by the Texas directive, despite carrying ESG-focused titles, are largely indexers with a tilt slightly away from energy stocks and slightly toward technology stocks. Banning such funds would make little difference to Texas pensioners or Texas energy companies, because the returns and stock holdings of banned funds are not meaningfully different from those of size-matched funds that do not proclaim an ESG focus. Pension funds in red states do not act per their politicians’ stance and largely follow market trends in their investment strategies. They have similar exposures to technology and energy stocks, as do pension funds in blue states. We conclude that the vehement pro– and anti–fossil fuel proclamations of blue and red states’ politicians, respectively, are not observed in their own state pension funds’ investment policies over which politicians have better control than on external funds. This paper was accepted by Ranjani Krishnan, accounting. Funding: The authors acknowledge financial support from the Social Sciences and Humanities Research Council of Canada. A. Srivastava acknowledges financial support from the Canada Research Chairs Program of the Government of Canada. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.05180 .

Evaluating Nature of Expense Classifications: Evidence from Labor Costs

SSRN Electronic Journal · 2025-01-01 · 2 citations

Follow the Money: Are Severe Weather Events Value Relevant?

SSRN Electronic Journal · 2025-01-01

Is the PCAOB effective? Insights from Interviews

SSRN Electronic Journal · 2025-01-01