We document that the accrual anomaly is mitigated for firms followed by experienced analysts, suggesting a positive link between analyst quality and stock price efficiency. We examine two channels through which analysts may improve price efficiency — the research and monitoring channels. We find analysts and investors respond more positively to the accrual component of earnings for firms followed by experienced analysts, consistent with the monitoring channel, whereby experienced analysts bring about better accrual quality. Direct examination of accrual quality confirms that firms followed by experienced analysts have higher accrual quality; this holds around exogenous events of broker mergers and closures.
This paper attempts to formalize the transaction cost theory of the firm. Building on the formal approach of Grossman and Hart (1986), a model is developed to capture the essential elements of the transaction cost theory, particularly those that are distinct from the formal property rights theory (PRT). In contrast to the PRT model, ours focuses on specific investments in alienable assets and ex post transactional inefficiencies. We define integration of two firms to imply common ownership of alienable assets from both firms, which entails control rights over the use of the assets as well as claims on their residual value. One important advantage of the model is its ability to deal with integration between non-owner-managed firms.
"Give us enough time, and one day we will be bigger than Ali," JD.com Founder Liu Qiangdong said during an episode of CCTV's current affairs show 'Dialogue'. Turns out he was not just full of bluster as a week later his company made Fortune magazine's 2016 list of the world's Top 500 businesses. Alibaba did not. JD.com's sales revenue for 2015 had far exceeded Ali's, $288 billion versus $12.3 billion.
In an ad for his company Chen Ou, Founder of online cosmetics company jumei.com and the youngest CEO to ring the New York Stock Exchange opening bell in 2014, declared: "I'm Chen Ou; I speak for myself". Following in his footsteps, many Chinese entrepreneurs have emerged from behind the scenes to endorse their own products, consciously or unconsciously presenting their private lives online.