Do Risk Disclosures Matter When It Counts? Evidence from the Swiss Franc Shock
Journal of Accounting Research, 2021, Volume 59(1)
(Joint with Luzi Hail and David Oesch)
[Abstract] We examine the relation between disclosure quality and information asymmetry among market participants following an exogenous shock to macroeconomic risk. In 2015 the Swiss National Bank abruptly announced that it would abandon the longstanding minimum euro-Swiss franc exchange rate. We find evidence suggesting that firms with more transparent disclosures regarding their foreign exchange risk exposure ex ante exhibit significantly lower information asymmetry ex post. The information gap in bid-ask spreads appears within 30 minutes of the announcement and persists for two weeks, during which new information gradually substitutes for past disclosures. We validate the information dynamics of past risk disclosures with three field surveys: (1) Sell-side analysts emphasize the importance of existing (risk) disclosures in evaluating the translational and transactional effects of the currency shock. (2) Lending banks’ credit officers rely on past disclosures as the primary information source available for smaller (unlisted) firms in the immediate aftermath of the shock. (3) Investor-relations managers use existing financial filings as a key resource when communicating with external stakeholders. The results suggest that historical disclosures help investors attenuate information asymmetry in light of unexpected news.

Financial Transparency of Private Firms: Evidence from a Randomized Field Experiment
Journal of Accounting Research, 2025, Volume 63(1)
(Joint with Joachim Gassen)
[Abstract] This paper examines why private firms choose to be financially transparent or opaque by conducting a field experiment with more than 25,000 firms in Germany. We inform a randomly chosen set of firms about a disclosure option that allows eligible firms to restrict access to their otherwise publicly available financial statements. We also vary the messaging in subtle ways to induce experimental variation in the probability that firms take transacting (capital providers or customers and suppliers) versus non transacting stakeholders (competitors or general interest parties) into consideration when making their filing decision. Based on each firm’s actual filing decision, we find that treated firms are 15% more likely to restrict access to their financial statements. This intention-to-treat effect is persistent and concentrated among firms that should derive lower net benefits from disclosure (smaller, more mature firms in less capital intensive industries). These findings indicate that informational constraints affect firms’ disclosure practice. Additionally, we show that the treatment effect is almost 40% larger for firms that have a higher, exogenously induced, probability of considering non-transacting stakeholders when making their disclosure decision. We also provide suggestive evidence that disclosure requirements put an undue burden on very small private firms.

How Do Consumers Use Firm Disclosure? Evidence from a Randomized Field Experiment
Journal of Accounting & Economics, 2026, Vol 81(1)
(Joint with Sinja Leonelli, Thomas Rauter and Gurpal Sran)
[Abstract] We combine a large-scale field experiment with a customized survey to study how consumers use and respond to ESG disclosure. In a sample of over 24,000 U.S. households, we first establish that while consumers moderately prefer to purchase from ESG-responsible firms, they rarely consult corporate reporting directly and face various frictions in learning about firm-level activities. In our field experiment, we then inform households about real firm-disclosed activities through several randomized information treatments. Consumers increase their purchase intent when exogenously presented with positive signals about environmental, social, and—to a lesser extent—governance activities. Full ESG reports increase purchase intentions only for consumers who choose to view them. After the experiment, consumers increase their actual purchases, but these effects are small, short-lived, and only materialize for social signals and viewed ESG reports. Through a follow-up survey, we provide explanations for why consumers (do not) change their behavior after our experiment.

Who Falls Prey to the Wolf of Wall Street? Investor Participation in Market Manipulation
Management Science, Forthcoming
(Joint with Christian Leuz, Steffen Meyer, Eugene Soltes and Andreas Hackethal)
[Abstract] Price distortions created by so-called “pump-and-dump” schemes are well documented, but relatively little is known about the investors in these schemes. By examining 470 pump-and-dump schemes and a large data set of trading records for over 110,000 individual investors from a major German bank, we provide comprehensive evidence on the participation rate, the magnitude of the investments, the losses, and the characteristics of the individuals who invest in such schemes. Participation is quite common, with nearly 8% of active retail investors participating in at least one pump-and-dump losing on average nearly 30%. We identify several distinct types of participating investors, some of which (e.g., speculating day trader) should not be viewed as falling prey to the schemes. We also show that portfolio composition and past trading behavior better explain scheme participation than demographics. Last, we document longer-lasting effects on participating investors beyond their immediate financial losses. Our analysis highlights that an effective regulatory response to pump-and-dump schemes requires understanding who invests in such schemes and why, as, for instance, not all investors are likely to be dissuaded from investing by traditional regulatory disclosures.

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Do Conflict of Interests Disclosures Work? Evidence from Citations in Medical Journals
Available on SSRN, NBER Working Paper
(Joint with Christian Leuz, Anup Malani and Laszlo Jakab)
[Abstract] Financial ties between drug companies and medical researchers are thought to bias studies published in medical journals. To enable readers to account for such bias, most medical journals require authors to disclose potential conflicts of interest. We examine whether disclosure reduces article citations, indicating a discount. A challenge to estimating this effect is selection as drug companies may seek out higher quality authors. Our analysis confirms this positive association. Including observable controls for article and author quality attenuates but does not eliminate this relation. We perform three tests. First, we show that the positive association is weaker for review articles, which are more susceptible to bias. Second, we examine article recommendations to family physicians among articles that are a priori more homogenous in quality. We find a significantly negative association between disclosure and expert recommendations, consistent with discounting. Third, we conduct an analysis within author and article, exploiting journal policy changes that result in conflict disclosure by an author. We examine the effect of this disclosure on citations to a previously published article by the same author. This analysis reveals a negative citation effect. Overall, our evidence is consistent with the notion that other researchers discount articles with disclosed conflicts.

Decoding a Social Disclosure Decision: A Field Experiment with Workforce Diversity Data
Available on SSRN
(Joint with Jung Ho Choi and Maureen McNichols)
[Abstract] In recent years, U.S. public companies have voluntarily disclosed official workforce diversity data (i.e., EEO-1 reports). To understand the factors leading these corporations to release this information publicly, we conduct a field experiment by reaching out to IR and HR personnel at about 4,000 large U.S. firms that currently do not publicly disclose their EEO-1 reports. We experimentally vary the information content of our requests. We find that companies are more likely to respond when directly considering investors’ rather than employees’ informational demands. On the other hand, we do not find any evidence that companies are more likely to respond when directly considering S&P 100 firms’ disclosure decisions. Both IR and HR departments play key roles in the process. A follow-up analysis identifies deterrents to disclosure, including legal and political considerations. Taken together, our results highlight understudied stakeholders and organizational characteristics that play a role in workforce diversity disclosure.

Peer Financial Benchmarking and Firm Learning: Evidence from a Field Experiment
Available on SSRN
(Joint with Jeppe Christoffersen, Michael Minnis, Thomas Plenborg, and Morten Seitz)
[Abstract] Do firms know how well they are performing? In this paper, we examine the role of peer information on firms’ self-assessed performance using a field experiment with more than 4,500 private firms in Denmark, where financial information is publicly available for all limited liability firms. We randomly provide treatment firms with aggregated information on key financial metrics of their industry peers. Relative to a set of control firms that did not receive this peer information, we find a notable shift in firm satisfaction with their own performance post-intervention. Treatment firms put more weight on their relative performance and less on their absolute performance. We also show that while control firms fixate on the zero-earnings benchmark when assessing their own performance, treatment firms do not, suggesting that the absence of an appropriate benchmark might underlie the zero-earnings discontinuity observed for private firms. Taken together, our results suggest that public disclosure does not ensure the full utilization of information and still leaves private firms using simple heuristics to assess their own performance. They also suggest that the underutilization of peer financial information among private firms can lead to skewed performance perceptions.

How Private Companies Win the Market's Attention
Available on SSRN Soon
(Joint with Thomas Bourveau and Matthias Breuer)
[Abstract] This paper examines whether private companies use company awards to obtain the market's attention. We use information from the most prominent annual ranking of the fastest-growing private companies in the U.S. and combine those data with historical copies of companies' webpages, job postings, and financial news. We find that companies are more likely to disclose their award and financial performance when they are placed just within a more salient ranking category (top 500) or receive special recognition (top industry award). We also find that these companies receive more (equity) financing, post more job openings, and increase their geographical reach after receiving and disclosing the award. Ultimately, these companies tend to have more successful exits and a lower failure rate. Taken together, our paper shows that company awards are an important facilitator helping private companies attract attention in capital, labor, and product markets through the salient disclosure of their financial performance.

Financial Statement Analysis with Large Language Models
Update February 2025
(Joint with Alex Kim and Valeri Nikolaev)
[Update] While attempting to independently replicate past analyses from our working paper, I identified inconsistencies in the underlying data and analyses. Accordingly, we have temporarily withdrawn the working paper from circulation while we review the research findings. We have also decided to review certain other LLM-based working papers for similar issues.

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Corporate Footprints
(Joint with Thomas Barry, Matthias Breuer, Rongchen Li, Thomas Rauter and Harm Schuett)

Informed Management
(Joint with Thomas Barry, Matthias Breuer, Patricia Breuer, Rongchen Li, Thomas Rauter and Harm Schuett)

Cash Versus Accrual Accounting: Evidence from a Randomized Field Experiment
(Joint with Pietro Bonetti and Matthias Breuer)

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