Textual Uncertainty in Financial Disclosures and Information Asymmetry among Investors, with J. Black and P.K. Jain, Financial Review, 2025 [link]

Presentations: AFA PhD student poster session (2021), FMA Annual Meeting (2021), EFA Annual Meeting (2021), MMMA PhD Conference (2021), Utah Valley University (2021), SFA Annual Meeting (2020)*, SWFA Annual Meeting (2020). (* = presented by a coauthor)

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Abstract: Prior literature documents a temporary spike in information asymmetry between sophisticated and unsophisticated traders around corporate disclosures because the former process new information faster. Using advances in textual analysis, we show that when management issues more uncertain financial statements, the resulting spike in information asymmetry is significantly lower than for firms which use less uncertain text. Furthermore, textual uncertainty measures of the disclosures are negatively associated with Intermarket Sweep Order (ISO) volume, an order type commonly used by sophisticated traders. This suggests sophisticated traders and algorithms are less able to extract value-relevant information from financial disclosures when they are uncertain.

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Do Stock Exchanges Specialize? Evidence from the New Jersey Transaction Tax Proposal, with K. Sokolov, Journal of Banking and Finance, 2023 [link]

Presentations: MFA Annual Meeting (2022), University of Memphis (2021).

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Abstract: Exchange ownership in the U.S. is often characterized as excessively concentrated. This leads to a concern that such concentration may prevent peripheral exchanges from mitigating adverse selection costs associated with low-latency arbitrage. We examine this concern using low-latency connectivity disruptions caused by temporary relocations of two markets, NYSE Chicago and Nasdaq PSX, in response to a transaction bill proposal. Although both exchanges had previously announced measures to curb low-latency trading, the connectivity disruptions cause a substantial reduction in adverse selection. These results suggest that peripheral markets have little incentive to implement measures restricting low-latency arbitrage.

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​Corporate Culture and Stock Liquidity, sole authored [SSRN]

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Abstract: I examine the empirical association between corporate culture and stock liquidity. I find that strong corporate culture is negatively associated with stock market liquidity. Firms with a strong culture strategically reduce the level of voluntary disclosure to deter short-term transient investors. I identify that this reduction in voluntary disclosure as the primary mechanism through which a strong corporate culture adversely affects stock liquidity. I also find that strong culture firms effectively maintain lower levels of short-term transient investor ownership by limiting voluntary disclosure. The main results remain consistent across various model specifications, survive endogeneity test, and robust to alternative measures of corporate culture and stock liquidity. Overall, the findings of the paper highlight the importance of corporate culture in shaping stock liquidity by affecting managers' voluntary disclosure decisions.

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Corporate Integrity Culture and Stock Price Crash Risk, with MN Hossain, M. Rabarison, and P. Saha [SSRN]

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Abstract: Using a measure of corporate integrity culture based on machine learning and textual analysis, we find that firms with high-integrity cultures are less likely to experience future stock price crashes. Our study shows that integrity culture, as a set of social norms, reduces managers’ tendency to withhold bad news. Further analyses reveal that the inverse relation between integrity culture and crash risk is stronger for firms with weak corporate governance and for firms with high agency problems, suggesting that high-integrity culture functions as a substitute mechanism for external governance monitoring. Our results hold after accounting for potential endogeneity and survive a battery of robustness tests, including the use of alternative proxies of crash risk and integrity culture. Overall, our findings contribute to the understanding of how corporate culture may affect corporate actions and outcomes.