This paper examines how climate risk transparency influences house prices and credit supply. I contend that inadequate property-level climate risk disclosures induce homebuyers to demand a risk aversion discount on house prices, creating a potential market for lemons. Employing a stacked difference-in-differences design, I find that flood risk disclosure laws, by enhancing dwelling-specific flood risk transparency, raise house prices on average by 7.6%. Results strengthen in states with stricter disclosure requirements. Exploiting within-state heterogeneity and controlling for housing market trends, I find that the effects persist and intensify in regions with higher aggregate exposure to flood risk, greater information frictions, and more attention to climate risks. Conversely, the effectiveness of flood risk disclosure laws attenuates in regions where households are less concerned about climate change. Additionally, less sophisticated lenders extend credit to financially constrained borrowers in response to the laws but experience lower profitability.

This study proposes that naming a firm eponymously is a mechanism that small private firms can use to signal their superior financial performance and commitment to fulfill debt contract obligations. Using 621,614 small private firms in Europe over the period 2008–2018, we find that small private eponymous firms pay significantly lower interest on their debts and have more long-term debt than non-eponymous firms. Our findings are robust to various controls and placebo tests. Additional analyses show that eponymy lowers the cost of debt and facilitates long-term debt via reputation signaling and private information. We also document that the effect of eponymy on debt contracting is most pronounced when there is less financial development and when firms’ dependence on external financing is low, consistent with the idea that high-quality firms opt for eponymy when they consider less external financing.

We study a publicly traded firm that cares about its short-term stock market performance while collaborating with a privately owned firm in a business alliance. The firms each undertake a relation-specific investment and then bargain over the allocation of the joint surplus generated by the alliance. The public firm’s myopic market concerns affect both the total size of the surplus and how the firms divide the surplus. While the public firm always becomes more aggressive and obtains more of the surplus, the total size of the surplus may become larger or smaller, due to the effect of myopic market concerns on the firms’ investment incentives. We establish conditions under which the investment and the value of each firm increase or decrease with market concerns. The market concerns could mitigate or exacerbate the hold-up problem between the two firms and thus could either benefit or harm the whole business alliance. We also study two extensions with (i) the two investments being substitutes instead of complements and (ii) both firms being publicly listed. In both cases, the insights from our main model still hold.

We condition security price reactions to quarterly earnings announcements on whether firms disclose supplementary balance sheet and/or cashflow information that can be used to estimate the consequences of earnings management. Disclosure of supplementary information is voluntary, and thus, we consider the possibility that firms that disclose balance sheet and/or cashflow information differ systematically from firms that do not disclose. Results indicate that investors discount evidence of earnings management at the disclosure date when supplementary information is disclosed. Such results indicate more informed earnings interpretations of quarterly earnings when firms provide balance sheet and/or cashflow information concurrently.