Working Papers
1. Kim-Gina, “The Impact of Financial Reporting Quality on Inter-Firm Contracting: Evidence on pricing structures” (Job market paper, under review at JAE, 2020)[1]
- I examine the effects of financial reporting quality on pricing mechanisms in inter-firm contracts. I find that when the counterparty’s financial reporting quality is low, firms reduce contractual reliance on accounting numbers in different ways, depending on the degree of misreporting concerns. On one hand, the potential for accounting misstatements (e.g., internal control issues) tightens monitoring terms and decreases the number of deductible expenses in royalty terms, leading to greater price protection. On the other hand, the realization of misreporting (e.g., AAER) reduces royalty rates and triggers inclusion of fixed payments—that is, partially substituting accounting-based payments with non-accounting-based payments. Overall, this paper provides novel evidence on inter-firm contracting that financial misreporting risk can be priced and mitigated through two different mechanisms.
2. Bushee, Kim-Gina, and Leung, “Public and Private Information Channels along Supply Chains: Evidence from Contractual Private Forecasts” (Working paper, 2020)
- We examine the interplay between public and private forecasts in supply chains when firms have capital market incentives to bias their management forecasts. We first document the general phenomenon of bias spillover in management forecasts along supply chains—consistent with supplier firms relying on customers’ management forecasts for their own forecasting. Using a novel, hand-collected dataset of customers’ sharing private forecasts, we find private forecasts mitigate the bias spillover by allowing the supplier to better detect strategic biases in the customer’s management forecasts due to capital market incentives. We also find private forecasts are especially important for reducing bias spillover when the customer has strong incentives or ability to bias its public forecasts (i.e., management forecasts).
3. Bushee, Keusch, and Kim-Gina, “Co-opetition and the Firm’s Information Environment” (Working paper, 2020)
- Some firms in the technology sector choose to cooperate with competitors (“co-opetition”) in Standards Setting Organizations (SSOs). We examine whether active SSO participation enhances a firm’s information set and allows managers to better predict future sales and earnings. We find that the more central a firm’s location within the network of SSO collaborators, the more accurate the firm’s sales forecasts. This relation is stronger when firms share more information with direct competitors, when forecasting is more difficult ex-ante, and when forecasting over longer horizons. Our findings show that collaborating with competitors in the product market provides an important unintended benefit of improving the manager’s information set.
4. Chawla and Kim-Gina, “Do Opaque Firms Amplify Propagation of Supply Chain Shocks?” (Working paper, 2020)
- We study network effects of firm’s information opacity during supply chain disruptions. Using natural disasters as firm-specific idiosyncratic shocks on suppliers, we find that customers increasingly search their suppliers’ SEC filings when the suppliers are hit by unexpected business disruptions. Customer firms suffer more when disrupted suppliers have opaque information environments, consistent with customers inefficiently re-optimizing operations with incomplete information. These effects also spill over to other supply chain participants that are not directly linked to disrupted suppliers, thereby amplifying spillover effects throughout the supply chains. Overall, our paper highlights the amplification effects of the firm’s information opacity and its potential implications on economy-wide shock propagations.
Work in progress
Blouin and Kim-Gina, “Implicit Corporate Taxes and Technology Transfer”
Blouin, Kim-Gina and Rabier, “Fair Value Accounting For Intangibles and Tax Considerations”
Friedman, Kim-Gina, and Mann, “Monitoring, Intangibles, and Growth”
Blouin, Kim-Gina and Rabier, “Fair Value Accounting For Intangibles and Tax Considerations”
Friedman, Kim-Gina, and Mann, “Monitoring, Intangibles, and Growth”