This study documents the fact that large dividend increases are followed by a significant increase in leverage, consistent with management increasing the dividend to use up excess debt capacity. However, the leverage increase is not captured by a standard partial adjustment model of leverage. Nor does it reflect variables known to be related to dividend increases, such as firm maturity, investment, and risk. Instead, the dividend increase signals a complex change in the way firms adjust to their leverage target, but it does not signal a change in the target.

In this study we use the SEC's decision to eliminate the reconciliation requirement for cross-listed companies to examine whether this loss of information prompted financial analysts to provide more informative research reports. We first document that the informativeness of analyst earnings forecasts increased, on average, in the post-regulation period for the sample of firms that stopped providing the reconciliation information (regulated firms). We next relate this change in informativeness to stock liquidity, a common proxy for information asymmetry. We do not find any change in market liquidity for regulated firms with greater analyst informativeness in the post-regulation period. In contrast, we document a decrease in market liquidity for regulated firms with lower analyst informativeness. These results support the conjecture that, when analysts compensate for the loss of information, the firm's information environment is not affected. We conclude that analysts can play an important role in capital markets as information providers and that their research can be especially valuable in times of information shortage.

This study uses 462,678 monthly observations of US-listed firms for the period 1990–2018 to document a strong positive relationship between short-term changes in financial distress risk and future stock price crashes. This result is economically significant as a one interquartile increase of the main explanatory variable in any month increases the probability of a stock price crash by 8.33% relative to its mean value. The findings withstand controls for a large array of variables, firm-fixed effect estimations, and alternative definitions of distress and crash risk measures; they are also robust to a range of tests conducted to buttress against endogeneity concerns. The study conducts analyses demonstrating that the positive distress-crash risk relationship is driven by managerial opportunism that seeks to camouflage bad news that has an adverse effect on firms' economic fundamentals. Accordingly, the findings corroborate an agency theory explanation for the impact of distress risk on stock price crashes. This study offers practical insights to investors, who should be vigilant of a firm's distress risk, as sudden short-term increases underscore withheld negative information pertinent to crash risk problems.

Customer orientation reflects the organizational culture and climate that promote behaviors enabling the firm to create superior value for its customers. Using a textual measure of customer orientation (Custor) constructed from 10-K filings, we document a positive and economically significant relation between Custor and stock returns in the financial crisis of 2008–2009 and the COVID-19 pandemic. High-Custor firms outperform low-Custor firms by 1.5% per month during the financial crisis and by 4.7% per month during the COVID-19 crisis. This positive Custor-returns relation is robust to different treatments and persists after accounting for factors that contribute to corporate resilience, such as CSR activities. Our findings lend credence to the notion that customer orientation enhances a firm’s social capital, leading to improved operational performance during adverse periods, whilst our empirical evidence further supports that Custor and CSR represent distinct pathways for building trust. Consequently, firms that prioritize customer orientation experience greater resilience to negative shocks, especially during periods of low market confidence.