Our interest in this study is the relative informativeness of earnings announcements reported before and after Form 8‐K disclosures of the reason for an auditor change. We appeal to several models that predict that the market's response to an earnings surprise is positively related to the perceived precision of the earnings report. We predict that the Form 8‐K reason disclosures aid investors in updating their expectations of earnings precision by providing useful information about the financial reporting process that produces the earnings report. For 802 auditor changes from late 1991 through late 1997, the average price response per unit of earnings surprise is lower subsequent to an auditor change for companies that switched for disagreement‐related or fee‐related reasons and higher for those that switched for service‐related reasons. This paper provides further evidence on the effects of differential earnings quality on differences in the returns‐earnings relation across companies and over time as well as the efficacy of Form 8‐K disclosures of reasons for auditor changes.

Pre-announcement information is private information gathered in anticipation of a public disclosure. Event-period information is private information useful in conjunction with the announcement itself. Typically rational models of trade are based exclusively on one type of information. Such models are less descriptive of real market settings and misspecified empirically. Therefore, we introduce a model of rational trade with both features and discuss its implications.

The paper analyzes the use of reported accounting earnings and price as a basis for compensating a manager when he trades on private information, and share price is set rationally based on privately held information, publicly available and contractible information, and publicly available but noncontractible information. In addition, we analyze the comparative statics of the compensation on reported earnings and price with respect to changes in the economy.

This paper suggests that earnings announcements provide information that allows certain traders to make judgements about a firm's performance that are superior to the judgements of other traders. As a result, there may be more information asymmetry at the time of an announcement than in nonannouncement periods. More information asymmetry implies that bid–ask spreads increase, suggesting that market liquidity decreases at the time of an earnings announcement. Furthermore, informed opinions resulting from public disclosure may lead to an increase in trading volume, despite the reduction in liquidity that accompanies announcements.

As maintained by J. M. Clark the amplitude of the investment cycle is larger and that of the consumption cycle smaller than that of the income cycle, provided only the consumption constant is larger than zero. On the other hand, it is true that acceleration is neither a necessary nor a sufficient condition for magnification: not a necessary condition since (4) is independent of the investment function; not a sufficient condition since, for co = o, magnification is absent regardless of the investment function and even if Baumol's equation (3) were valid and his conditions for magnification were satisfied.

This paper exploits changes in financial subsidy programs to investigate their effect on female employment and firm performance. The identification strategy uses a quasi-experiment from a government policy change that eliminated financial support for exporting plants in the Chilean manufacturing industry. The difference-in-differences methodology shows that the policy change increased the share of total female employment by 3.3%, driven mainly by an increase of female workers in blue-collar occupations. In comparison, male labor experienced a drop of 4.4% in white-collar occupations in the treated plants relative to those in the control group. Plant total factor productivity (TFP) decreased due to the policy change, but both total gross output and sales rose approximately 7% on average. The paper explores two possible mechanisms to explain these findings: the technology adoption channel and changes in the gender composition of labor in the presence of a gender pay gap. The findings are consistent with the international trade and corporate finance literature on firm behavior under high market fixed and sunk costs.

I uncover heterogeneous effects of macroprudential policy on GDP growth distribution by bringing together the literature on the impact of macroprudential policy and recent developments on the use of quantile regressions. I identify important benefits of macroprudential policy on the left-tail of the GDP growth distribution which contrast with the negative effects found in previous studies using conditional mean models. These benefits may offset the deterioration on growth-at-risk produced by the build-up of cyclical vulnerabilities and the materialization of financial crises. I also find that the impact of macroprudential policy is dependent on the position in the financial cycle, the type of instrument, and the time elapsed since its implementation. In particular, tightening capital measures during expansions may take up to two years to show evidence of benefits on growth-at-risk, while the positive impact of borrower-based measures is rapidly observed. Conversely, in downturns the benefits of loosening capital measures are more immediate, while those of borrower-based measures are limited. This suggests the importance of timing in macroprudential policy. Overall, this study provides a useful framework to assess the impact of macroprudential policy in terms of GDP growth and to identify the term-structure of specific instruments.

This article establishes the cyclical properties of a novel measure of worker reallocation: long-distance migration rates within the United States. Combining evidence from a number of data sets spanning the entire postwar era, we find that internal migration within the United States is procyclical. This result cannot be explained by cyclical variation in relative local economic conditions, suggesting that the net benefit of moving rises during booms. Migration is most procyclical for younger labor-force participants. Therefore, cyclical fluctuations in the net benefit of moving appear to be related to conditions in the labor market and the spatial reallocation of labor.

A comparison of the correlations between brothers and neighboring boys in their adult earnings suggests that the earnings resemblance between brothers stems more from growing up in the same family than from growing up in the same neighborhood. Much of the neighbor correlation is explicable in terms of the large earnings differential between urban and nonurban areas combined with the strength with which urbanicity of childhood neighborhood predicts urbanicity of adult location. This pattern is subject to a variety of interpretations, but it is quite different from the usual view of neighborhood effects.