We document presidential particularism in the allocation of U.S. federal government contracts. Firms in “Swing” and “Core” states receive disproportionately higher federal contracts during election cycles. Contracts peak in reelection years for incumbent presidents suggesting electoral and partisan motives. Awards to “Core” states fall relative to “Hostile” states in election years of the presidents’ second terms. Government agencies engage more aggressively in particularism when aligned with the president’s party. Particularism disappeared during the Trump presidency, with Hostile-state firms awarded more contracts. Market participants, who are slow to recognize the relationship between particularism and corporate earning, underreact to this phenomenon.

We test the implications of anchoring bias associated with forecast earnings per share (FEPS) for forecast errors, earnings surprises, stock returns, and stock splits. We find that analysts make optimistic (pessimistic) forecasts when a firm’s FEPS is lower (higher) than the industry median. Further, firms with FEPS greater (lower) than the industry median experience abnormally high (low) future stock returns, particularly around subsequent earnings announcement dates. These firms are also more likely to engage in stock splits. Finally, split firms experience more positive forecast revisions, more negative forecast errors, and more negative earnings surprises after stock splits.

Principal customers have strong incentives to screen and/or monitor suppliers to ensure supply-chain stability; consequently, the implicit certification from the existence of long-term relationships with principal customers has reputational consequences that potentially spill over to other markets. We argue that one such consequence is smaller loan spreads and looser loan covenants on bank loans, as firms that are able to hold on to principal customers longer are perceived as safer firms by banks. We address causality and endogeneity issues via a variety of tests and find consistent results. Our study suggests that non-financial stakeholders can have important effects on the decisions of financial stakeholders.

The literature examining analyst activity assumes that access to management is valued by analysts and their employers. We propose a readily observable measure of access: How often an analyst is invited to be among the first to ask questions in the Q&A session of an earnings conference call. These “early participants” are more successful in the labor market than peers from the same brokerage when their brokerages close. Our results show that access is valued by both sell-side and buy-side employers and reflects connectivity to management as well as analyst skill dimensions not captured in traditional measures of performance.

In the presence of litigation-facing suppliers, the supply chain relationship is at risk. Suppliers with principal customers (dependent suppliers) have a higher concentration of sales to customers, and they are more at risk relative to suppliers without principal customers (non-dependent suppliers). As a result, we predict and find that litigation disclosure patterns differ for the two supplier types: dependent suppliers are more likely to delay bad news and accelerate good news related to litigation outcomes, compared to non-dependent suppliers. Such strategic disclosure patterns in our end-game setting are opposite to those documented in the existing supply chain literature for the repeated-game setting (for example, Hui, Klasa, and Yeung 2012).

We investigate whether firms in close customer–supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms’ and dependent supplier firms’ organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships.