Using bank and credit card transaction data, we study individual investors' paid news subscriptions. Among individual investors (individuals with at least one bank-to-brokerage transfer), only 4% of individual-quarters include a news subscription, and 1.2% include a financial news subscription. These low rates mask substantial variation across news sources and over time. Within financial news, approximately 30% of aggregate subscription dollars are spent on crowdsourced news, with the remaining 70% spent on traditional financial news. Subscription dollars vary over time, with crowdsourced news at times matching or exceeding traditional financial news. We also find that subscriptions are correlated with capital market activity. Aggregated payments for subscriptions, particularly for crowdsourced news, are correlated with stock market valuation, trading volume, and investment. Similarly, within individuals, the association between subscriptions and investment is driven primarily by crowdsourced news: subscribing is associated with a $280 increase in quarterly investment. Overall, our findings highlight variation in individual investors' news subscriptions and their correlated investment activities.

Over three-quarters of U.S. taxpayers receive federal tax refunds, largely due to income tax over-withholding. This study explores how over-withholding impacts investments by comparing individuals' investment behavior following wage receipts and tax refunds. We find a significantly higher marginal propensity to invest out of wages than refunds, suggesting that over-withholding, which alters the labeling and timing of income, meaningfully influences financial decision-making. Our cross-sectional analysis indicates that the differential investment rates are more pronounced for individuals with automatic investment setups and lower financial sophistication. The difference cannot be fully explained by alternative explanations such as lack of awareness, fixed dollar investment goals, timing differences between wages and refunds, uncertainty of refunds, transaction costs, or the perception of refunds as additional windfall income. Our findings underscore the importance of considering behavioral factors in the formulation of tax policies and contribute to the accounting literature that examines taxes and investment behavior.

Administrative support staff aid firms in managing and motivating employees. However, our understanding of their role is limited. Using unique data from employee profiles, we find that administrative intensity, defined as the proportion of administrative support employees, is negatively associated with future firm performance. This negative association disappears when administrative intensity is low, suggesting a certain level of administrative intensity may be beneficial. Further analysis shows that higher administrative intensity is associated with better employee relationships: lower turnover and higher job satisfaction. However, administrative intensity comes at the cost of lower innovation quality and quantity. Finally, we find that firms with higher administrative intensity experience lower future stock returns, suggesting investors do not fully use this information. Overall, our findings reveal the trade-offs of administrative support: while firms with higher administrative intensity enjoy better relationships with employees, these firms also exhibit worse innovation, resulting in overall poorer financial performance.

We examine whether firms use late trade credit payments to meet cash flow forecasts using unique data on overdue payments to suppliers. We find that firms meeting or just beating analysts’ quarterly operating cash flow forecasts exhibit higher proportions of overdue payments and longer past due durations. This behavior varies with market incentives to meet cash flow forecasts, expected costs to suppliers, and buyers’ flexibility to adjust payment timing. Strategic late payments are concentrated in the last month of the quarter, when managers have better information about actual and expected performance. However, this practice comes at the cost of strained supplier relationships: firms using late payments to meet cash flow forecasts are less likely to start new supplier relationships and more likely to end existing ones.

We study individual investors’ paid news subscriptions. Among individual investors, only 4

Top management teams (TMTs) are considerably less diverse than employees at other levels and the general population. Using over 48,000 firm-year observations of executives across 3,807 firms from 1992 to 2017, we find robust evidence that the existing racioethnic composition of TMTs predicts subsequent TMT appointments that preserve the racioethnic status quo. Specifically, having a racioethnic minority group member on a TMT has a negative association with appointing another member of the same group, and the departure of a racioethnic minority group member from a TMT has a strong positive association with an appointment of a member of that group. However, having a CEO from a racioethnic minority group has a positive association with an appointment from the CEO's racioethnic group. Moreover, the associations with departures and CEO racioethnicity appear stronger in more recent years (2005-2017) than in the past (1992-2004). Theories of diversity in the upper echelon of firms that focus on the role of stereotypes cannot fully explain these effects. The results are consistent with a status uncertainty account we derive from theories of intergroup dynamics. The results also show that TMT appointment decisions hinge on finer-grained distinctions among racioethnic categories than typically used by researchers and the US Census.

A common corporate cash management strategy is to delay payments owed to suppliers. We examine whether buyers pay suppliers faster in response to a recent regulatory change in the United Kingdom that mandates the public disclosure of buyers' payment practices. We find that after the regulatory change, UK firms subject to this regulation shortened their payment periods relative to several control samples of firms that were not subject to the regulation. In cross-sectional tests, we predict and find that this shortening of the payment period is attenuated for firms that are less able to bear the costs of paying suppliers faster. Specifically, we find that the reduction in the payment period is smaller for buyers that (i) have longer operating cycles, (ii) depend more heavily on trade credit as a source of external financing, and (iii) pay dividends. In supplemental tests using proprietary data, we find that buyers subject to this regulation reduced their trade credit that is overdue by 30 days or more. However, this reduction is partially offset by an increase in the trade credit that is overdue by less than 30 days. Our findings are important in light of the ongoing debate in other regimes (e.g., the United States) on whether to require additional disclosures of trade credit.

Leveraging micro-level data on individual employees’ bank and credit card transactions, we examine the impact of earnings announcement (EA) news on employee spending. Utilizing an event study methodology, we find strong evidence that EA news elicits significant reactions in employee spending. These reactions are stronger for employees located in the firm’s headquarters state, with longer tenure, possessing investment experience, or earning higher wages, consistent with these employees being more likely to attend to their firm’s EAs. The reactions are also stronger for the fourth fiscal quarter than interim quarters, suggesting that year-end results garner greater employee attention. Furthermore, consistent with media facilitating employee processing of EA news, the reactions are stronger for EAs covered by a larger number of news articles. Finally, in line with the notion that EAs contain information about employees’ future cash flows, we find that EA news predicts changes in employee wages and that employees with higher past wage-to-EA news sensitivity exhibit stronger spending reactions. Overall, our findings provide evidence of the role of financial reporting in employees’ spending decisions.

In the workplace, women are less likely than men to hold higher paying positions throughout the entire organization, not just top executive roles. We refer to this phenomenon as the gender position gap . Using novel gender and salary data on employees who hold various positions within firms, we examine the determinants of the gender position gap and its informativeness about future firm performance. We find that the gender position gap is wider for firms with larger female–male differences in human capital characteristics (prior work experience and education), fewer female leaders, and weaker monitoring (proxied by institutional ownership, analyst following, and firm size). Firms with larger gender position gaps have poorer future performance. This negative association is not driven by employees at the top or bottom end of the corporate hierarchy. The negative association is stronger for firms that rely more on human capital. Firms with a larger gender position gap also have lower future stock returns, which suggests that investors do not fully utilize information about gender position gaps. Overall, our findings are consistent with the view that the gender position gap contains information about future firm performance.

We analyze the impact of the 2021 Child Tax Credit (CTC) expansion using detailed transaction data from nearly two million individuals and difference-in-difference analyses around monthly CTC payments. We find that recipients significantly increase their consumption in the week following the payment versus the prior week, with more pronounced effects for lower-income recipients and those with more children. We also find a significant reduction in liquidity constraints for lower-income recipients, with reductions in overdrafts, use of high-interest payday loans, and use of gig work for supplemental income. Building on these initial findings, our analysis further delves into more nuanced, policy-targeted aspects: We observe a greater alleviation of liquidity constraints from monthly CTC payments compared with annual tax refunds. In addition, monthly payments decrease consumption volatility and increase stability in consumption levels. These results inform considerations for payment frequency. Furthermore, we provide insights into the income thresholds for the policy's phase-in and phase-out ranges by identifying the most pronounced consumption effects among the lowest-income recipients-who benefit from full refundability under the plan-and noting an absence of significant consumption changes among higher-income recipients. Our results present the first large-scale, transaction-based, empirical archival evidence of the effects stemming from the 2021 CTC amendments and provide insights for policy-related discussions.

We examine managerial incentives to disclose the gender diversity of a firm's workforce. We exploit information from employees' online profiles to infer the gender diversity of nondisclosing firms. Within industry, we find that firms are more likely to disclose gender diversity when women comprise a higher proportion of their workforce, consistent with managerial incentives to disclose favorable information. However, disclosure is more prevalent in industries with a lower proportion of female employees, consistent with a poor gender diversity environment making a firm's gender diversity appear relatively more favorable. Regarding the potential benefits of disclosure, disclosing firms enjoy more favorable media coverage of the firm's diversity and attract a larger number of gender-lens ESG funds. Disclosing firms with a higher proportion of female employees enjoy greater benefits. Overall, our study broadens our understanding of the evolving corporate disclosure landscape by providing evidence on firms' incentives to disclose workforce gender diversity.

We examine how local tech industry growth affects the accounting labor supply. We exploit state and local subsidies awarded to tech firms as a quasi-natural experiment setting that stimulates local tech industry growth. Using a difference-in-differences design, we find that accounting graduates increase in regions awarding these subsidies, consistent with students pursuing accounting in response to tech industry-driven increases in demand for accounting services. This effect is more pronounced in regions with higher tech industry-related accounting fees and with greater intensity of patenting, R&D, and stock-based compensation, which require sophisticated accounting. We also find that this effect is mitigated in regions with lower accounting compensation, less favorable working conditions in accounting, and 150-hour licensure requirements. Finally, we document increases in local accounting employment and wages following these subsidies, supporting a demand-driven mechanism. Overall, our findings suggest that tech industry expansion can complement rather than crowd out entry into the accounting profession.

“Buy-now-pay-later” (BNPL) is a relatively unregulated FinTech innovation that provides consumers with easy access to credit for retail purchases. BNPL spending is projected to reach $1 trillion by 2025, but we know little about its effects. Using banking data for 10.6 million U.S. consumers, we investigate the effects of BNPL on leading indicators of users’ financial health. We find that new BNPL users experience rapid increases in bank overdraft charges and credit card interest and fees compared with nonusers, consistent with BNPL facilitating overborrowing. An instrumental variable exploiting consumers’ pre-BNPL shopping habits bolsters our inferences. Our results inform regulatory investigations into the effects of BNPL on users’ financial health and expand academia’s understanding of an important consumer credit innovation. This paper was accepted by Camelia Kuhnen, finance. Funding: E. deHaan acknowledges financial support from Stanford University; B. Lourie and C. Zhu acknowledge financial support from University of California Irvine. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.03266 .

Using a large hand-collected sample of 1,246 failed acquisition offers from 1979 to 2016, we examine the effects of failure reasons on the revaluation of target firms. We find a negative revaluation of -16% for failures not caused by target rejection, suggesting exposure of adverse information about the target's economic conditions. Conversely, targets declining offers show a positive revaluation of +7%, indicating target management's private information about the firm's superior prospects. These revaluation effects are stronger for hard-to-value targets, consistent with failure reasons revealing more information when there is greater uncertainty about the target's value.

The widening CEO-employee pay gap in U.S. corporations and its mandated disclosure have generated significant debate. This paper investigates the implications of this disclosure on employee turnover, a pivotal determinant of organizational health and financial performance. Employing proprietary data on employee turnover, we find that firms disclosing larger pay gaps experience higher employee turnover rates. This effect is more pronounced for employees in lower-paying roles or junior positions. Further analysis shows prolonged open job vacancies in high-pay-ratio firms after the disclosure, suggesting prospective employee concerns over joining firms with pronounced pay disparities. Our study underscores the significant impact of CEO-employee pay ratio disclosures on human capital retention in firms, offering critical insights into the operational implications of pay disparities for policymakers, investors, and practitioners.

Using novel data on corporate accounting employees, we find that the risk aversion of rank-and-file accounting employees, proxied by the proportion of female accountants, is negatively associated with the likelihood of internal control weaknesses. The results are incremental to controlling for other accounting employee characteristics, such as experience and quality, which are also associated with fewer internal control weaknesses. In contrast, female non-accounting employees explain operating risk and not internal control risk. We mitigate endogeneity concerns by using an entropy balanced sample and an instrumental variable approach that exploits variation in the external supply of female accountants. Our study is among the first to provide large-sample archival evidence that characteristics of accounting employees matter to financial reporting and how these effects differ from non-accounting employees.

We examine the economic impact of the 2020 student loan forbearance program on borrowers. We use detailed individual transaction data and a difference-in-differences methodology to uncover the effects of forbearance on financial behavior and labor market outcomes. Our results show that forbearance leads to increased consumption and investment and reduced bank overdrafts, consistent with a decrease in financial stress. However, we observe a negative link between forbearance and wages, suggesting potential changes in borrowers' labor supply incentives due to reduced financial pressure. These findings shed light on the economic outcomes of debt relief policies, offering insights for future policy design and evaluation.

This study examines how the implementation of the new lease accounting standard (ASC 842) affects banks’ internal credit ratings for their clients. Leveraging ASC 842’s staggered implementation due to different fiscal year ends, we find that, contrary to the concern held by most managers, banks rate firms as less risky post-ASC 842. This improvement is stronger for firms with greater credit assessment uncertainty in the pre-period, more abnormal operating lease activities in the pre-period, and more operating lease-related information disclosed after adopting ASC 842. Overall, our results are consistent with the implementation of ASC 842 reducing firms’ credit risk perceived by banks. Answering the call by the FASB for more research on ASC 842 to inform its post-implementation review, our evidence suggests that ASC 842 achieved its intent of improving transparency about operating lease activities.