ABSTRACT Using two decades of French administrative data, we find that post‐leveraged buyout (LBO), target firms reduce within‐firm pay gaps while increasing profitability relative to control firms. Employee turnover drives the pay‐gap reduction. In target and control firms alike, turnovers reduce average pay more at the top of the wage distribution than at the bottom because separated employees are paid more—new joiners less—than similar employees, especially among skilled employees. LBOs amplify this effect through increased turnover among managers. Post‐buyout, p90/p10, gender, age, and managers/non‐managers pay gaps decline by 3%, 9%, 21%, and 4% and the employee pool becomes younger.

Abstract This study examines the relationship between corporate asset growth rates and bond performance, uncovering a strong inverse relationship between the two. Higher asset growth increases asset value, potentially offering greater protection to bondholders and leading to lower bond returns. By decomposing bond returns into initial yields and subsequent yield changes, our analysis supports this expectation and suggests that investors may overreact to asset growth, as investor sentiment significantly influences bond yields in response to it. Finally, drawing on insights from leverage-based Q-theory, we examine how stock returns respond to asset growth, accounting for its effect on bond performance. (JEL G12, G02)

Abstract Do real assets protect against inflation? Stocks’ core inflation betas are negative, while their energy betas are positive. Currencies, commodities, and real estate mostly hedge against energy inflation, but not core inflation. These hedging properties are reflected in the prices of inflation risks: only core inflation carries a negative risk premium, and its magnitude is consistent within and across asset classes, uniquely among macroeconomic risk factors. Energy inflation has become more procyclical and volatile since the 1990s, which helps explain the time-varying correlation between stock and bond returns. A two-sector New Keynesian asset pricing model accounts for these facts quantitatively.

Abstract In this study, we examine how achievement‐related tendencies are expressed in the professional auditing context, particularly through the interplay between the CEO and the audit partner. We use the facial width‐to‐height ratio (fWHR), a stable morphological trait widely applied in prior research, as a proxy for achievement drive. Using a sample of US audit partners from 2016 to 2019, we find that higher achievement drive is associated with enhanced audit quality, evidenced by fewer restatements and lower abnormal accruals. Auditors with higher achievement drive are also more likely to become industry experts, attain leadership positions, and achieve partnership status more quickly. Importantly, we find that high‐achievement‐drive audit partners are more inclined to assert dominance in negotiations, particularly when working with equally driven CEOs, leading to improved audit quality. Overall, our findings suggest that, when activated in auditing contexts, achievement‐oriented tendencies, as proxied by fWHR, are linked to higher audit quality.

This study employs a broad set of machine learning (ML) methods to examine cross-sectional variation in corporate bond returns in China. Using macroeconomic indicators together with bond- and issuer-specific characteristics, we find that ML techniques outperform traditional linear models in both statistical and economic terms. These models are particularly effective at capturing distinctive features of the Chinese market, including the dominance of state-owned enterprises, implicit government guarantees, and rapid market evolution. We compare long-short and long-only portfolio strategies to account for practical constraints on short selling. The results indicate that ML methods are effective in markets where institutional features and information asymmetries play a central role in asset pricing.

Migrant welfare policies serve as crucial institutional levers for achieving sustainable urban development, yet the underlying mechanisms through which they influence firm value remain largely underexplored. This study proposes a new method for measuring the level of urban migrant welfare policies based on policy text scoring, and, using Chinese data, explores the impact of urban migrant welfare on corporate value and its underlying mechanisms. We find relatively robust evidence consistent with urban migrant welfare policies spilling over onto local corporate value. Mechanism tests suggest that these policies enhance corporate value by improving human capital allocation, promoting corporate social responsibility, and fostering innovation. The positive effect is more pronounced for firms in the growth stage and those operating in less competitive industries. Furthermore, we show that local fiscal capacity acts as a binding constraint: the value-enhancing effect of migrant welfare policies depends on sufficient fiscal resources for implementation. Our findings provide a new methodological perspective on quantifying policy text and elucidate the micro-foundations of how public policy shapes corporate performance.

ABSTRACT This paper explores U.S. public firms’ cryptocurrency holdings and accounting practices from 2013 to 2022 against the backdrop of the recently enacted crypto accounting rule, ASU 2023‐08. Descriptive analyses suggest exponential growth in corporate crypto holdings and significant variation in crypto accounting practices, underscoring the rule's necessity. Hypothesis tests using the pre‐rule data reveal three insights with direct relevance to the rule. First, firms appear to view crypto assets more akin to investments than intangible assets, consistent with the rule's mandate of the fair value model. Second, Big 4 auditors steer firms toward the impairment model and less detailed presentation choices. This conservative approach is unlikely to meet the new rule's goal of providing the most decision‐useful information. Third, increased liquidity of crypto markets prompts the use of the fair value model and a more detailed presentation, consistent with the rule's focus on more actively traded tokens. However, within our sample, we find some evidence consistent with fair value reporting increasing stock return volatility and no evidence that it enhances earnings informativeness.