Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101806
Lindsey A. Gallo , Hengda Jin , Suhas A. Sridharan
This paper examines time-series variation in the relationship between aggregate earnings and GDP (AEG). Using quarterly data from 1979–2019, we document that aggregate earnings are positively associated with future real GDP after 2000 but not before. We further show that this variation does not result from an association between aggregate earnings and the corporate profits component of GDP. Instead, we discover that aggregate special items – not core earnings – drive the post-2000 AEG by conveying information about labor market outcomes. Specifically, aggregate special items relate to future GDP only when they predict wages and worker displacement. Our study contributes to the literature by documenting previously unexplored time variation in the AEG relationship and identifying its source, challenging conventional assumptions about how aggregate accounting measures signal future economic conditions.
{"title":"Unraveling the time-series dynamics between aggregate earnings and GDP","authors":"Lindsey A. Gallo , Hengda Jin , Suhas A. Sridharan","doi":"10.1016/j.jacceco.2025.101806","DOIUrl":"10.1016/j.jacceco.2025.101806","url":null,"abstract":"<div><div>This paper examines time-series variation in the relationship between aggregate earnings and GDP (AEG). Using quarterly data from 1979–2019, we document that aggregate earnings are positively associated with future real GDP after 2000 but not before. We further show that this variation does not result from an association between aggregate earnings and the corporate profits component of GDP. Instead, we discover that aggregate special items – not core earnings – drive the post-2000 AEG by conveying information about labor market outcomes. Specifically, aggregate special items relate to future GDP only when they predict wages and worker displacement. Our study contributes to the literature by documenting previously unexplored time variation in the AEG relationship and identifying its source, challenging conventional assumptions about how aggregate accounting measures signal future economic conditions.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101806"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144566521","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101820
Mary Ellen Carter, Lian Fen Lee, Enshuai Yu
We examine whether the threat of requiring Scope 3 emissions disclosures increases affected firms' preference for greater control over production and GHG emissions, which renders outsourcing to foreign countries less desirable. Using the SEC's March 2021 request for input on climate-related disclosures as a shock to the probability that Scope 3 emissions disclosures would be required, we find that affected firms reduce imports relative to unaffected firms. The reduction is concentrated in firms for which disclosing Scope 3 emissions are likely costlier and among firms with greater ability to reduce foreign outsourcing. Further, the reduction is more pronounced among firms facing Scope 3 disclosure pressures from the EU and California. Finally, we find some evidence that affected firms increase in-house production and improve their environmental efforts. Collectively, our findings suggest that the threat of Scope 3 disclosures induces real changes in corporate operations.
{"title":"Real effects of proposed scope 3 disclosures","authors":"Mary Ellen Carter, Lian Fen Lee, Enshuai Yu","doi":"10.1016/j.jacceco.2025.101820","DOIUrl":"10.1016/j.jacceco.2025.101820","url":null,"abstract":"<div><div>We examine whether the threat of requiring Scope 3 emissions disclosures increases affected firms' preference for greater control over production and GHG emissions, which renders outsourcing to foreign countries less desirable. Using the SEC's March 2021 request for input on climate-related disclosures as a shock to the probability that Scope 3 emissions disclosures would be required, we find that affected firms reduce imports relative to unaffected firms. The reduction is concentrated in firms for which disclosing Scope 3 emissions are likely costlier and among firms with greater ability to reduce foreign outsourcing. Further, the reduction is more pronounced among firms facing Scope 3 disclosure pressures from the EU and California. Finally, we find some evidence that affected firms increase in-house production and improve their environmental efforts. Collectively, our findings suggest that the threat of Scope 3 disclosures induces real changes in corporate operations.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101820"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146116666","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101829
Gregory S. Miller , Douglas R. Stockbridge Jr. , Christopher D. Williams
Regulators around the world have begun to require investment companies to provide information regarding fossil fuel investments to external stakeholders. In this paper we examine whether such disclosures impact the investment portfolios and/or investment policies of the disclosing firms. Using a 2016 California disclosure mandate that required some U.S. insurance companies to disclose their fossil fuel investments on a public website, we find the disclosing insurers reduced their fossil fuel investments by approximately 20 % relative to the non-disclosers. Despite this on-average result, we note significant variation in changes to investment portfolios. We find insurers pressured by external stakeholders, including public shareholders and environmental activists, are more likely to divest. In contrast, enhanced Californian regulatory oversight power is unrelated to divesture. Even after the disclosure mandate is reversed, we find the disclosing insurers do not revert to their pre-policy holdings of fossil fuel investments, suggesting the impact created a longer-term change in investment behavior.
{"title":"Mandatory disclosure of investors’ fossil fuel holdings","authors":"Gregory S. Miller , Douglas R. Stockbridge Jr. , Christopher D. Williams","doi":"10.1016/j.jacceco.2025.101829","DOIUrl":"10.1016/j.jacceco.2025.101829","url":null,"abstract":"<div><div>Regulators around the world have begun to require investment companies to provide information regarding fossil fuel investments to external stakeholders. In this paper we examine whether such disclosures impact the investment portfolios and/or investment policies of the disclosing firms. Using a 2016 California disclosure mandate that required some U.S. insurance companies to disclose their fossil fuel investments on a public website, we find the disclosing insurers reduced their fossil fuel investments by approximately 20 % relative to the non-disclosers. Despite this on-average result, we note significant variation in changes to investment portfolios. We find insurers pressured by external stakeholders, including public shareholders and environmental activists, are more likely to divest. In contrast, enhanced Californian regulatory oversight power is unrelated to divesture. Even after the disclosure mandate is reversed, we find the disclosing insurers do not revert to their pre-policy holdings of fossil fuel investments, suggesting the impact created a longer-term change in investment behavior.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101829"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144898934","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101802
Jonathan Libgober , Beatrice Michaeli , Elyashiv Wiedman
We examine how external news with uncertain precision influences investor beliefs, market prices, and corporate disclosures. We find that good external (and public) news is taken with a grain of salt — specifically, it is perceived as unlikely to be precise — confirming investor beliefs that nondisclosing managers are hiding unfavorable (private) information. As a result, better external news may paradoxically lead to lower market valuation. Overall, we find that, amid management silence, equilibrium stock prices are nonmonotonic in (and react asymmetrically to) external news. We also predict that the probability of disclosure depends on the timing of the disclosure, the positivity of external news, and the financial strength of the industry.
{"title":"With a Grain of Salt: Investor Reactions to Uncertain News and (Non)disclosure","authors":"Jonathan Libgober , Beatrice Michaeli , Elyashiv Wiedman","doi":"10.1016/j.jacceco.2025.101802","DOIUrl":"10.1016/j.jacceco.2025.101802","url":null,"abstract":"<div><div>We examine how external news with uncertain precision influences investor beliefs, market prices, and corporate disclosures. We find that good external (and public) news is taken with a grain of salt — specifically, it is perceived as unlikely to be precise — confirming investor beliefs that nondisclosing managers are hiding unfavorable (private) information. As a result, better external news may paradoxically lead to lower market valuation. Overall, we find that, amid management silence, equilibrium stock prices are nonmonotonic in (and react asymmetrically to) external news. We also predict that the probability of disclosure depends on the timing of the disclosure, the positivity of external news, and the financial strength of the industry.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101802"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144304958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101803
Wei Ting Loh
This study examines whether information sharing occurs within institutional investor networks. I identify networks of institutional investors who share common investments and find that in-network investors earn significantly higher returns than other investors of the same firm, suggesting that valuable private information is shared within these networks. I also find that ownership by investor networks is associated with speedier price discovery and incorporation of more firm-specific news in prices, consistent with information sharing facilitating efficient price formation. In addition, ownership by network investors is associated with higher information risk as reflected in the probability of informed trading and market liquidity. These results are consistent with the dissemination of private information exacerbating the information disadvantage that out-of-network investors face in capital markets. In cross-sectional analyses, I document that evidence of information sharing is stronger in settings with more investor interaction and connectedness.
{"title":"Information sharing within institutional investor networks","authors":"Wei Ting Loh","doi":"10.1016/j.jacceco.2025.101803","DOIUrl":"10.1016/j.jacceco.2025.101803","url":null,"abstract":"<div><div>This study examines whether information sharing occurs within institutional investor networks. I identify networks of institutional investors who share common investments and find that in-network investors earn significantly higher returns than other investors of the same firm, suggesting that valuable private information is shared within these networks. I also find that ownership by investor networks is associated with speedier price discovery and incorporation of more firm-specific news in prices, consistent with information sharing facilitating efficient price formation. In addition, ownership by network investors is associated with higher information risk as reflected in the probability of informed trading and market liquidity. These results are consistent with the dissemination of private information exacerbating the information disadvantage that out-of-network investors face in capital markets. In cross-sectional analyses, I document that evidence of information sharing is stronger in settings with more investor interaction and connectedness.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101803"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146116664","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101830
Li Azinovic-Yang , Tim Baldenius
How does information asymmetry within firms affect their innovation incentives? To address this question, we introduce an agency problem with strategic reporting into an experimentation setting. Severe agency problems disrupt truthful reporting, and thereby also experimentation. However, for moderate agency problems, the firm may experiment more than in a symmetric information setting, because experimenting improves the agent’s reporting incentives. Unlike traditional real-options models, experimentation may be optimal even if an early success would imply no better future profit prospects than a routine project. The innovations brought about in such a manner tend to be either incremental or radical in nature, rather than moderate. We discuss the robustness of our findings with regard to the mutual exclusiveness of projects in each period (allowing for “project sampling”), the parties’ commitment power, endogenous option values, etc.
{"title":"Innovation in firms: Experimentation and strategic communication","authors":"Li Azinovic-Yang , Tim Baldenius","doi":"10.1016/j.jacceco.2025.101830","DOIUrl":"10.1016/j.jacceco.2025.101830","url":null,"abstract":"<div><div>How does information asymmetry within firms affect their innovation incentives? To address this question, we introduce an agency problem with strategic reporting into an experimentation setting. Severe agency problems disrupt truthful reporting, and thereby also experimentation. However, for moderate agency problems, the firm may experiment more than in a symmetric information setting, because experimenting improves the agent’s reporting incentives. Unlike traditional real-options models, experimentation may be optimal even if an early success would imply no better future profit prospects than a routine project. The innovations brought about in such a manner tend to be either incremental or radical in nature, rather than moderate. We discuss the robustness of our findings with regard to the mutual exclusiveness of projects in each period (allowing for “project sampling”), the parties’ commitment power, endogenous option values, etc.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101830"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"146116665","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101811
Sinja Leonelli , Maximilian Muhn , Thomas Rauter , Gurpal S. Sran
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.
{"title":"How do consumers use ESG disclosure? Evidence from a randomized field experiment with everyday product purchases","authors":"Sinja Leonelli , Maximilian Muhn , Thomas Rauter , Gurpal S. Sran","doi":"10.1016/j.jacceco.2025.101811","DOIUrl":"10.1016/j.jacceco.2025.101811","url":null,"abstract":"<div><div>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.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101811"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664692","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-02-01DOI: 10.1016/j.jacceco.2025.101817
Jiyuan Dai , Gaizka Ormazabal , Fernando Penalva , Robert Raney
We study the decarbonization effects of imposing sustainability regulation on investors. Our focus is the EU Sustainable Finance Disclosure Regulation (SFDR), which requires funds domiciled or marketed in the EU to classify themselves based on different degrees of sustainability commitment and imposes disclosure requirements based on such classification. Using a broad sample of international investment funds, we document that the SFDR was followed by a significant decarbonization (around 10 percent) of investment portfolios of funds domiciled or marketed in the EU claiming to invest based on sustainability criteria. Additional tests suggest that the lower level of emissions is primarily driven by changes in funds’ investment decisions, although there is some indication that firm-level emissions may also contribute to the observed decarbonization. Overall, our evidence suggests that the regulation resulted not only in shifting capital flows away from high-emission firms, but also in increased pressure on portfolio firms to achieve emissions reductions at the firm level.
{"title":"Mandatory investor disclosure, sustainability commitments, and portfolio decarbonization","authors":"Jiyuan Dai , Gaizka Ormazabal , Fernando Penalva , Robert Raney","doi":"10.1016/j.jacceco.2025.101817","DOIUrl":"10.1016/j.jacceco.2025.101817","url":null,"abstract":"<div><div>We study the decarbonization effects of imposing sustainability regulation on investors. Our focus is the EU Sustainable Finance Disclosure Regulation (SFDR), which requires funds domiciled or marketed in the EU to classify themselves based on different degrees of sustainability commitment and imposes disclosure requirements based on such classification. Using a broad sample of international investment funds, we document that the SFDR was followed by a significant decarbonization (around 10 percent) of investment portfolios of funds domiciled or marketed in the EU claiming to invest based on sustainability criteria. Additional tests suggest that the lower level of emissions is primarily driven by changes in funds’ investment decisions, although there is some indication that firm-level emissions may also contribute to the observed decarbonization. Overall, our evidence suggests that the regulation resulted not only in shifting capital flows away from high-emission firms, but also in increased pressure on portfolio firms to achieve emissions reductions at the firm level.</div></div>","PeriodicalId":48438,"journal":{"name":"Journal of Accounting & Economics","volume":"81 1","pages":"Article 101817"},"PeriodicalIF":6.8,"publicationDate":"2026-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144664690","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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