Working Paper

Mandatory US Subsidy Disclosures: Early Evidence
with Aneesh Raghunandan, Shivaram Rajgopal, and Min Jun Song
Revise & Resubmit at The Accounting Review

Presentations: Barcelona Accounting Summer Workshop*, Columbia Business School, Hawai’i Accounting Research Conference
Media Coverage: Forbes
Abstract

In November 2021, the Financial Accounting Standards Board passed ASC 832, mandating disclosure of government subsidy-related information in annual reports. ASC 832 did not prescribe specific measurement, recognition, or presentation guidelines, giving firms discretion to determine compliance practices. In this paper, we provide initial evidence on firms’ disclosures under the new standard. We highlight three key findings. First, both the quantity and quality of subsidy-related disclosures improved following the standard’s implementation, but improvements are concentrated in firms receiving larger subsidies or previously voluntarily disclosing subsidy-related information. Second, despite the standard’s adoption, firms do not disclose substantial subsidies, potentially dampening the standard’s impact. We leverage the observability of non-compliance, unique to our setting, to identify information withholding. Third, given ASC 832’s limited scope, public firms are increasingly pursuing subsidies not subject to the disclosure mandate. Our findings highlight both the immediate impact of the standard and shortcomings of its implementation.

Sequential Voluntary Disclosure
based on second-year paper

Presentations: Columbia Business School, Columbia Accounting Theory Conference, Fourteenth Accounting Research Workshop, AAA Annual Meeting, The Second Annual Conference of the AES
Abstract

Firms disclose information sequentially, responding to peers’ disclosure choices and short-term price pressures. This paper develops a dynamic model that examines how peer effects, disclosure timing, and managerial myopia jointly shape voluntary disclosure behavior. The model isolates correlation in firms’ information endowments as the primary economic force. When the timing of disclosure decisions is exogenous, the presence of a peer firm increases the ex-ante likelihood of disclosure. This effect strengthens as the correlation in information endowments increases. When one or both firms can choose the disclosure timing strategically, the equilibrium features prompt disclosure of favorable news, delayed disclosure of intermediate news, and withholding of unfavorable news. Signaling effects through timing, real-option value of disclosure deferral, and preemptive disclosure motives arise endogenously in equilibrium. Managerial myopia has opposing effects on early-date disclosure across regimes: with exogenous timing, it induces more withholding; with strategic timing, it encourages more disclosure.

Regulating in Name Only: The Consequences of Mutual Fund Naming Rules
with Kalash Jain and Shivaram Rajgopal

Presentations: MIT Sloan*, Columbia Business School*
Media Coverage: Institutional Money
Abstract

A large body of literature finds that misleading mutual fund names can distort investor allocation decisions. The SEC's Fund Names Rule, passed in 2001 and amended in 2023, aims to curb this misrepresentation by requiring fund names to reflect actual holdings. We provide the first empirical evaluation of fund and market responses to both the original rule and its amendment. Our findings reveal limited regulatory impact. Compliance rates did not improve, investors did not consistently penalize non-compliant funds with redemptions, and funds do not change their holdings or names to comply with the regulation. To better understand the lack of response, we examine whether private market stakeholders (investors and information intermediaries) are more effective at disciplining fund behavior than regulators. Funds only adjust their holdings when the market actively penalizes non-compliance, but such discipline is rare. Similarly, funds only adjust their holdings when their name does not align with Morningstar's Style Box classifications, rather than in response to SEC-defined compliance. These findings show that while disclosure regulation may hold intuitive appeal, it may be ineffective when private market forces already address transparency concerns.

Exploiting Myopia: The Returns to Long-Term Investing
with Kalash Jain

Presentations: The University of Chicago*, Wolfe Research*, Columbia Business School, Jefferies LLC*
Media Coverage: Bloomberg, Investopedia (1), Investopedia (2)
Abstract

Investment managers often face short-term incentives, such as redemption pressure following recent weak performance, that discourage them from holding positions through temporary underperformance. These constraints can lead to systematic underinvestment in firms that require longer holding periods to realize value. We examine whether these horizon-driven frictions generate predictable return patterns across firms. We measure long-term ownership at the firm level using active managers' share-weighted holding periods (Horizon), and document that firms with longer Horizon generate significantly higher returns than those with shorter Horizon, particularly among stocks that are harder for myopic managers to hold. We exploit the 2004 SEC rule that increased mutual fund disclosure frequency to link our findings to myopia. We find that Treated firms experienced declines in Horizon and a stronger Horizon-return relation, consistent with increased myopia reducing long-termism and increasing mispricing. In contrast, we find no change in the Horizon-return relation following the XBRL mandate, which improved access to fundamental information but did not affect investor constraints. These results suggest that frictions in institutional holding horizons, not information-processing advantages, drive the observed returns to long-term investing.

Selected Work in Progress

Performance Pricing, Risk Shifting, and Conservatism
with Tim Baldenius

What’s Said vs. What’s Expected: Information Surprise in MD&A Topics
solo-authored, first-year paper

* Indicates presentations by coauthor