Knowledge that Transforms

ABSTRACT Addressing income inequality is crucial for ensuring equitable and prosperous societies. This study examines the impact of the local press on intrafirm pay disparity. By using recently mandated disclosures of CEO-worker pay ratios and analyzing the staggered shutdown of local newspapers, we find that within-firm pay disparity increases by 8.2 percent following local newspaper closures. Further analysis suggests that this post-closure increase in pay disparity ratio is unlikely to be driven by either CEO compensation or worker pay alone or underlying economic conditions but instead reflects reduced concerns over reputational damage. Overall, our findings are consistent with local newspapers’ playing an important role in disseminating CEO-worker pay ratios and amplifying their reputational effects, thereby shaping and monitoring within-firm pay disparity. Data Availability: Data used in this study are available from public sources identified in the paper. JEL Classifications: G38; J31; M12; L82.

ABSTRACT We examine whether the adoption of the current expected credit losses (CECL) model, which incorporates forward-looking information in loan loss provisions (LLPs), enhances banks’ information production. Consistent with better information production, we document significant changes in both financial reporting and operational outcomes following CECL adoption. First, CECL banks’ LLPs become timelier and better reflect future local economic conditions. Second, CECL banks experience lower rates of loan defaults. These improvements are more pronounced among banks that invest more in CECL-related information systems and human capital, and are especially salient for larger banks. Our findings suggest that forward-looking accounting standards can enhance banks’ information environments. JEL Classifications: E32; G2; G28; M4; M48.

Abstract Women continue to be underrepresented in corporate leadership positions. This article studies the role of social connections in women’s career advancement. We investigate whether access to a larger share of female peers in business school affects the gender gap in senior managerial positions. Merging administrative data from a top 10 U.S. business school with public LinkedIn profiles, we first document that female MBAs are 24% less likely than male MBAs to enter senior management within 15 years of graduation. Next we use the exogenous assignment of students into sections to show that a larger proportion of female MBA section peers increases the likelihood of entering senior management for women but not for men. This effect is driven by female-friendly firms, such as those with more generous maternity leave policies and greater work-schedule flexibility. A larger proportion of female MBA peers induces women to transition to these firms where they attain senior management roles. A survey of female MBA alumnae reveals three key mechanisms: (i) information sharing, especially related to gender-specific advice, (ii) higher ambitions and self-confidence, and (iii) increasing support from male MBA peers. These findings highlight the role of social connections in reducing the gender gap in senior management positions.