Agency Theory of Overvalued Equity as an Explanation for the Accrual Anomaly (2009)
S. P. Kothari, Elena Loutskina, Valeri Nikolaev
We show that the agency theory of overvalued equity (see Jensen, 2005, and others) rather than investors ’ fixation on accruals explains the accrual anomaly, i.e., abnormal returns to an accrual...
Wayne Guay, S. P. Kothari, Jon Lewellen, Stewart Myers, Krishna Palepu, Shiva Rajgapol, ...
How Much do Firms Hedge with Derivatives? Previous research offers little large-sample evidence on the magnitude of non-financial firms ' risk exposure hedged by financial derivatives. In a...
Paul Hribar Henry, Mary Barth, Bill Beaver, Mike Cipriano, S. P. Kothari, ...
This paper examines the impact of measuring accruals as the change in successive balance sheet accounts, as opposed to measuring accruals directly from the statement of cash flows. Our primary...
Agency theory of overvalued equity as an explanation for the accrual anomaly (2006)
Kothari, S.P., Loutskina, Elena, Nikolaev, Valeri
We show that the agency theory of overvalued equity (see Jensen, 2005) rather than investors' fixation on accruals explains the accrual anomaly, i.e., abnormal returns to an accrual trading strategy...
Earnings Management and Accounting Income Aggregation* (2006)
John Jacob, Bjorn N. Jorgensen, Shuping Chen, John Core, Peter Easton, ...
University of Washington and an anonymous referee for their comments and suggestions. The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
STOCK RETURNS, AGGREGATE EARNINGS SURPRISES, AND BEHAVIORAL FINANCE (2003)
Kothari, S.P., Lewellen, Jonathan, Warner, Jerold
We study the stock market reaction to aggregate earnings news. Previous research shows that, for individual firms, stock prices react positively to earnings news but require several quarters to fully...
STOCK RETURNS, AGGREGATE EARNINGS SURPRISES, AND BEHAVIORAL FINANCE (2003)
Kothari, S.P., Lewellen, Jonathan, Warner, Jerold
We study the stock market reaction to aggregate earnings news. Previous research shows that, for individual firms, stock prices react positively to earnings news but require several quarters to fully...
Sp Kothari, Jim Short, S. P. Kothari, J. E. Short, Kalani Oshiro, Stanley Woods, ...
For more information, please visit our website at
Testing Behavioral Finance Theories Using Trends and Sequences in Financial Performance (2002)
Chan, Wesley, Frankel, Richard, Kothari, S.P.
Models based on psychological biases can explain momentum and reversal in stock returns, but risk overfitting of theory to data. We examine a central psychological bias, representativeness, which...
Testing Behavioral Finance Theories Using Trends and Sequences in Financial Performance (2002)
Chan, Wesley, Frankel, Richard, Kothari, S.P.
Models based on psychological biases can explain momentum and reversal in stock returns, but risk overfitting of theory to data. We examine a central psychological bias, representativeness, which...
Determinants of the Informativeness of Analyst Research (2002)
Kothari, S.P., Weber, Joseph, Frankel, Richard M.
Analyst research helps prices reflect information about a security's fundamentals. However, analysts' private incentives potentially contribute to misleading research and it is possible that the...
Determinants of the Informativeness of Analyst Research (2002)
Kothari, S.P., Weber, Joseph, Frankel, Richard M.
Analyst research helps prices reflect information about a security's fundamentals. However, analysts' private incentives potentially contribute to misleading research and it is possible that the...
The Advantages of Using Earnings for Compensation: Matching Delivered Performance (2000)
Barclay, Michael J., Gode, Dan, Kothari, S. P.
We show that the greater the extent to which a performance measure matches delivered performance, the simpler and more robust are the compensation plans based on it. In some settings stock price...
The Advantages of Using Earnings for Compensation: Matching Delivered Performance (2000)
Barclay, Michael J., Gode, Dan, Kothari, S. P.
We show that the greater the extent to which a performance measure matches delivered performance, the simpler and more robust are the compensation plans based on it. In some settings stock price...
The effect of international institutional factors on properties of accounting earnings (2000)
Ball, Ray, Kothari, S.P., Robin, Ashok
International differences in the demand for accounting income predictably affect the way it incorporates economic income (change in market value) over time. We characterize the "shareholder" and...
The Effect of International Institutional Factors on Properties of Accounting Earnings (1998)
Ball, Ray, Kothari, S.P., Robin, Ashok
International differences in the demand for accounting earnings affect properties of earnings that are predictable and observable. First, we show that earnings are more timely in incorporating...
The Relation Between Earnings and Cash Flows (1997)
Dechow, Patricia M., Kothari, S.P., Watts, Ross L.
A simple model of earnings, cash flows and accruals is developed by assuming a random walk sales process, variable and fixed costs, accounts receivable and payable, and inventory and applying the...
How Naive Is the Stock Market's Use of Earnings Information? (1995)
Ray Ball, Eli Bartov, To Larry Brown, Andrew Christie, S. P. Kothari, Joshua Ronen, ...
Rendleman, Jones and Latané (1987) and Bernard and Thomas (1990) report evidence supporting their hypothesis that investors use a "naive" seasonal random walk model, at least in part, to...
Economic Determinants of the Relations Between Earnings Changes and Stock Returns (1990)
Ball, Ray, Kothari, S.P., Watts, Ross L.
We investigate how the economic determinants of earnings affect the relation between earnings changes and stock returns. A positive association between earnings changes, risk changes and equilibrium...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
Handa, Puneet, Kothari, S P, Wasley, Charles
The capital asset pricing model's (CAPM) primary empirical implication is a positively sloped linear relation between a security's expected rate of return and its relative risk (beta). Recent...
The role of financial reporting in reducing financial risks in the market
Accounting ; Financial markets ; Financial crises ; Transparency
Evaluating Mutual Fund Performance
We study standard mutual fund performance measures, using simulated funds whose characteristics mimic actual funds. We find that performance measures used in previous mutual fund research have little...
Another Look at the Cross-Section of Expected Stock Returns.
Kothari, S P, Shanken, Jay, Sloan, Richard G
The authors' examination of the cross-section of expected returns reveals economically and statistically significant compensation (about 6 to 9 percent per annum) for beta risk when betas are...
Lack of timeliness and noise as explanations for the low contemporaneuos return-earnings association
Collins, Daniel W., Kothari, S. P., Shanken, Jay, Sloan, Richard G.
Agency theory of overvalued equity as an explanation for the accrual anomaly
Kothari, S.P., Loutskina, Elena, Nikolaev, Valeri
We show that the agency theory of overvalued equity (see Jensen, 2005) rather than investors' fixation on accruals explains the accrual anomaly, i.e., abnormal returns to an accrual trading strategy...
A Market-Based Evaluation of Discretionary-Accrual Models.
Guay, W., Kothari, S.P., Watts, R.L.
Considerable research in accounting focuses on the role of accruals in capital market valuation and in contracting. The research shows accruals enable managers to improve on cash flows as a mesure of...
prices ; economic models
The Correlation Structure of Earnings, Cash Flows, and Accruals.
Dechow, P.M., Kothari, S.P., Watts, L.R.
ENTERPRISES;SALES;ACCOUNTING;ECONOMIC MODELS
Economic Determinants of the Relation Between Earnings Changes and Stock Returns.
Ball, R., Kothari, S.P., Watts, R.l.
risk ; revenu ; financial market
Determinants of the Informativeness of Analyst Research
Kothari, S.P., Weber, Joseph, Frankel, Richard M.
Analyst research helps prices reflect information about a security's fundamentals. However, analysts' private incentives potentially contribute to misleading research and it is possible that the...
Testing Behavioral Finance Theories Using Trends and Sequences in Financial Performance
Chan, Wesley, Frankel, Richard, Kothari, S.P.
Models based on psychological biases can explain momentum and reversal in stock returns, but risk overfitting of theory to data. We examine a central psychological bias, representativeness, which...
STOCK RETURNS, AGGREGATE EARNINGS SURPRISES, AND BEHAVIORAL FINANCE
Kothari, S.P., Lewellen, Jonathan, Warner, Jerold
We study the stock market reaction to aggregate earnings news. Previous research shows that, for individual firms, stock prices react positively to earnings news but require several quarters to fully...
Kolasinski, Adam, Kothari, S.P.
Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than...
Effect of personal taxes on managers' decisions to sell their stock
We examine the effect of personal taxes on CEOs' decisions to sell their equity, controlling for diversification, managerial overconfidence, and other determinants. While CEOs frequently sell large...
Do Managers Withhold Bad News?
S. P. KOTHARI, SUSAN SHU, PETER D. WYSOCKI
ABSTRACTIn this study, we examine whether managers delay disclosure of bad news relative to good news. If managers accumulate and withhold bad news up to a certain threshold, but leak and immediately...
What should GAAP look like? A survey and economic analysis
S.P. Kothari, Karthik Ramanna, Douglas J. Skinner
Based on extant literature, we articulate a positive theory of GAAP under the assumption that GAAP's objective is to facilitate the efficient allocation of capital within an economy. The theory...
Are Corporations Reducing or Taking Risks with Derivatives?
Hentschel, Ludger, Kothari, S. P.
Public discussion about corporate use of derivatives focuses on whether firms use derivatives to reduce or increase firm risk. In contrast, empirical academic studies of corporate dervatives use take...
Kolasinski, Adam C., Kothari, S. P.
We find evidence that conflicts of interest arising from mergers and acquisitions (M A) relations influence analysts' recommendations, corroborating regulators' and practitioners' suspicions in a...