This paper reassesses the long-debated relationship between market competition and firms’ innovation. While competition is traditionally measured at the industry level using historical data, our study utilizes two recently developed text-based measures of competitive threats which are forward-looking and constructed at the level of individual firms. We address the potential endogeneity concerns and provide causal inference using instrumental variables including import tariffs and trade-weighted exchange rates, along with the propensity score matching (PSM) of firms that experienced exogenous shock from import competition. Our results show that an increase in competition unambiguously promotes firms’ innovation in terms of both quality and quantity.

This paper examines managerial disclosure behavior in mandatory filings in response to heightened legal accountability. We treat the enactment of the Sarbanes–Oxley Act (SOX) in 2002 as a regulatory event that increases the legal accountability of top executives and analyze the filing tones of a large sample of Forms 10-Q and 10-K from 1994 to 2017 using textual analysis. We find that changes in filing tones carry substantial information that is promptly reflected in the capital market. Furthermore, we identify a structural break in the distribution of filing tones around the passage of SOX. Firms tend to adopt a more negative tone in their quarterly mandatory disclosures following the enactment of SOX. Interestingly, investors exhibit a stronger reaction to changes in filing tone in the post-SOX era, which is not solely driven by the systematic shift in tone distribution. Additionally, we document that while filing tones are generally associated with common performance measures, this relationship weakens after SOX. These findings contribute to the understanding of how legal reforms shape managerial communication strategies and how market participants interpret soft information under regulatory scrutiny. By shedding light on disclosure behavior in response to increased legal accountability, this study offers timely implications for future legislative reforms, investor interpretation of corporate filings, and the broader governance of financial reporting.

This paper examines how the initiation of credit default swap (CDS) trading affects the product market competition faced by the referenced firms in the US. The trading of CDS provides an avenue for creditors to hedge default risks, thereby weakening the incentives to monitor the borrowers. Our paper shows that the trading of CDS increases firm-level product market competition because a reduced creditor monitoring effect can lead to growing shareholder demand for information disclosure, revealing strategic information that may undermine the product market competency of the firm when disclosed. While prior literature shows that CDS-traded firms increase both the likelihood and frequency of earnings forecasts as a direct response to shareholder demand, we observe that firms made their mandatory disclosure (i.e., Form 10-K) less readable as a potential way to reduce strategic disclosure. We also find that the presence of institutional investors generally reduces a firm’s competition, but this positive effect is overturned in the presence of CDS trading.

I. Heightened scrutiny, market failures, and rapid technological change increase the need for clear, specific Form S-1 disclosures. Cases such as Wirecard AG and Luckin Coffee show how vague filing...

This study investigates credit unions’ expansion into non-core lending and its association with risk and financial resilience. Using US credit union call report data from 1994 to 2024, we measure the share of purchased loans, lease receivables, and loans held for sale in non-core lending. We document robust conditional, within-credit-union associations that point to a clear risk trade-off. Credit unions with higher non-core exposure grow faster in terms of loans and membership but exhibit weaker financial buffers, including lower net worth ratios and weaker economic solvency, alongside higher delinquency. Decomposition tests indicate that loans held for sale are most strongly associated with adverse buffer and asset quality patterns, while purchased loans and lease receivables display smaller and less uniform relationships. Scale interactions suggest that these associations are generally weaker for larger institutions for both membership and assets. Post-COVID estimates indicate that the baseline relationships are broadly stable, while the growth link is becoming stronger.