This study examines the effect of capitalizing acquired in‐process research and development (IPR&D) on information asymmetry under Statement of Financial Accounting Standards No. 141 (R) (SFAS 141R). SFAS 141R requires acquirers to fully recognize IPR&D at fair value as an indefinite‐lived intangible asset until completion or discontinuation of the project. Prior research suggests IPR&D capitalization will result in an improvement in the information environment. In contrast, we find no evidence that capitalizing IPR&D improved the information environment for IPR&D acquirers. Instead, most of our results suggest no significant change in information asymmetry for IPR&D acquirers during the post‐SFAS 141R period, relative to the concurrent changes for non‐IPR&D acquirers. In cases in which the results suggest a statistically significant increase, the economic magnitudes are relatively small. In addition, we find no evidence that IPR&D acquirers engaged in increased classification shifting between IPR&D and goodwill during the post‐SFAS 141R period, as critics of capitalization had feared.

Histiocytic disorders are uncommon and often affect multiple organ systems. They pose diagnostic challenges because of their rarity and the fact that the nosology of these lesions is still being decided. ALK-positive histiocytosis is one of the newest subtypes and was originally described about 10 years ago, wherein there was a predilection for neonates and infants with multi-organ involvement [1]. Since then, ten additional cases have been reported, with only one having exclusive intracranial disease, along with involvement of the cavernous sinus [2, 3]. Here, we report two additional cases with exclusive involvement of the central nervous system. Case 1 is a 7-year-old girl who presented with a 1-month history of headaches and vomiting. Magnetic resonance imaging (MRI) showed an infiltrating 3 cm mass in the cerebellar vermis. The mass was associated with diffusion restriction and was radiologically suspicious for medulloblastoma (Fig. 1a). She underwent gross total resection followed by observation with MRI every 3 months. Postoperative whole-body PET–CT scan showed no evidence of systemic disease. At 1-year postoperative follow-up, there is no evidence of recurrence on neuroimaging. Her only neurologic deficit is a minimal slurring of speech and difficulty with phonation. Case 2 is a 10-year-old girl who presented with medically refractory seizures and was found to have a homogenously enhancing 1.4 cm mass in the right pericentral cortical region on head MRI (Fig. 1g). She underwent focal corticectomy followed by observation. Postoperatively, she has been doing well and has only had one reported seizure. She has not had a recurrent seizure while on antiepileptic therapy. At 6-month postoperative follow-up, there is no evidence of recurrence on neuroimaging. She has no remarkable findings on physical and neurological exam. Consistent with prior reported cases, microscopic examination in both cases showed sheet-like aggregates of large epithelioid cells with irregularly folded nuclei and fine chromatin, foamy cells, Touton-like giant cells, and focal emperipolesis (Fig. 1b–e, h). Immunohistochemical workup in both cases showed ALK expression (Fig. 1f, i), Factor XIIIa, CD68 (Fig. 1j), and CD163 (Fig. 1k) positivity, patchy staining for S-100 protein, and lack of CD1a, BRAF V600E, or GFAP reactivity, although the latter highlighted adjacent and entrapped brain parenchyma with reactive astrocytosis (Fig. 1l). The histopathology observed in these cases of ALK-positive histiocytosis show overlapping features with those of Erdheim–Chester disease (ECD), juvenile xanthogranuloma (JXG), Rosai–Dorfman disease (RDD), and Langerhans cell histiocytosis (LCH). In particular, foamy cells, Touton-like giant cells, variable S-100 staining, and the presence of Factor XIIIa expression suggests the possibility of JXG or ECD [4]. Emperipolesis can be seen in RDD and folded or grooved nuclei are present in LCH. A CD1a immunostain can be used to further rule out LCH. Rarely, ALK-positive histiocytosis can also be confused with astrocytic lesions, particularly at intraoperative consultation Electronic supplementary material The online version of this article (https ://doi.org/10.1007/s0040 1-019-02027 -7) contains supplementary material, which is available to authorized users.

© The Author(s) 2018. Low adoption of agricultural technologies holds large productivity consequences for developing countries. Many countries hire agricultural extension agents to communicate with farmers about new technologies, even though a large academic literature has established that information from social networks is a key determinant of product adoption. We incorporate social learning in extension policy using a large-scale field experiment in which we communicate to farmers using different members of social networks. We show that communicator own adoption and effort are susceptible to small performance incentives, and the social identity of the communicator influences others' learning and adoption. Farmers appear most convinced by communicators who share a group identity with them, or who face comparable agricultural conditions. Exploring the incentives for injection points in social networks to experiment with and communicate about new technologies can take the influential social learning literature in a more policy-relevant direction.

Why do companies not follow through with an IPO after filing for one? This question is investigated by examining common stock IPOs for the largest countries in Europe. We cover 80% of the Western European IPO market over the 2001–2015 period. We establish that the IPO phenomenon of withdrawal is a common feature of equity markets and identify key characteristics that influence the probability of withdrawal. Findings indicate that venture capital or private equity involvement, the presence of negative news, CEO duality, or the intent to retire debt increase the probability of IPO withdrawal. On the other hand, higher levels of corporate governance or trading volume decrease the pssrobability of IPO withdrawal. We argue that imminent agency conflicts and the lack of appropriate control mechanisms can force a company to withdraw from the IPO.

We evaluate the link between chief executive officer (CEO) industry tournament incentives (ITIs) and the product-market benefits of corporate liquidity. We find that ITIs increase the level and marginal value of cash holdings. Furthermore, ITIs strengthen the relation between excess cash and market-share gains, especially for firms that face significant competitive threats. Additionally, for firms with excess cash, higher ITIs lead to increased research and development (R&D) expenses, capital expenditures, and spending on focused acquisitions as well as reduced payouts. Overall, our findings suggest that ITIs increase the value of cash by incentivizing CEOs to deploy cash strategically to capture its product-market benefits.

We find that financial statement comparability enhances the ability of current period returns to reflect future earnings, as measured by the future earnings response coefficient (FERC). This suggests that comparability improves the informativeness of stock prices and allows investors to better anticipate future firm performance. In addition, using both the FERC and stock price synchronicity tests, we find that comparability increases the amount of firm‐specific information (rather than market/industry‐level information) reflected in stock prices. Analysts play an important role in improving stock price informativeness by producing more firm‐specific information when comparability is high. These findings suggest that comparability lowers the costs of gathering and processing firm‐specific information.

We analyze whether the growing importance of passive investors has influenced the campaigns, tactics, and successes of activists. We find activists are more likely to seek board representation when a larger share of the target company’s stock is held by passively managed mutual funds. Furthermore, higher passive ownership is associated with increased use of proxy fights, settlements, and a higher likelihood the activist achieves board representation or the sale of the targeted company. Our findings suggest that the recent growth of passive institutional investors mitigates free-rider problems and facilitates activists’ ability to engage in costly, value-enhancing forms of monitoring. Received September 28, 2016; editorial decision August 18, 2018 by Editor Andrew Karolyi.

We study market-making high-frequency trader (HFT) dynamics around large institutional trades in Canadian equities markets using order-level data with masked trader identification. Following a regulatory change that negatively affected HFT order activity, we find that bid-ask spreads increased and price impact decreased for institutional trades. The decrease in price impact is strongest for informed institutional traders. During institutional trade executions, HFTs submit more same-direction orders and increase their inventory mean reversion rates. Our evidence indicates that high-frequency trading is associated with lower transaction costs for small, uninformed trades and higher transaction costs for large, informed trades.Received May 24, 2016; editorial decision June 21, 2018 by Editor Andrew Karolyi.

What has driven the dramatic rise in U.S. corporate cash? Using non-public data, we show that the run-up is not uniform across firms but is concentrated in the foreign subsidiaries of multinational firms. Standard precautionary motives explain only domestic cash holdings, not these burgeoning foreign cash balances. Falling foreign tax rates, coupled with relaxed restrictions on income shifting, are the root of the changing foreign cash patterns. Firms with intellectual property have the greatest ability to shift income to low tax jurisdictions, and their foreign subsidiaries are where we observe the largest accumulations of cash. Received September 6, 2017; editorial decision August 22, 2018 by Editor David Denis.

We develop and estimate a dynamic model of risk-shifting over the business cycle. First, equity holders with Epstein-Zin preferences increase their taking of idiosyncratic risk substantially more than the standard model in repeated games, because they perceive the arrival probability of bad states to be higher than the actual probability and prefer an early resolution of macroeconomic uncertainty. Second, sudden switches to bad states and large shocks in the bad states induce the countercyclical and “synchronized” idiosyncratic risk. Third, combined with the high market risk premium in the bad states, clustered risk-taking generates a countercyclical idiosyncratic volatility discount on equity returns.Received July 1, 2017; editorial decision January 22, 2018 by Editor Stijn Van Nieuwerburgh.