Existing research suggests that market misvaluations affect corporate investment, often leading to suboptimal investment. I examine whether earnings smoothness reduces the impact of market valuations on corporate investment and in turn enhances investment efficiency. I find that earnings smoothness has a strong negative effect on the sensitivity of corporate investment to stock prices. Further analyses indicate that this negative effect is driven by both innate and discretionary components of earnings smoothness and is more pronounced for firms operating in more volatile business environments. I complement these findings by demonstrating that firms with smoother earnings have lower over- (under-)investment and higher future operating performance. Collectively, the evidence suggests that earnings smoothness improves corporate investment efficiency by reducing the impact of market valuations on investment.

This dissertation is comprised of three papers. In Chapter 1 I analyze if career heterogeneity in terms of life-cycle earnings, occupational mobility and unemployment is predominantly driven by skills acquired prior to labor market entry or by decisions made and shocks accumulated over the working life. My study is based on a Dynamic Discrete Choice model that enriches the proto-typical dynamic Roy-model with a number of potentially important sources of career heterogeneity, such as match heterogeneity and permanent shocks to skills. I find that a large fraction of life-cycle income inequality is driven by match heterogeneity among workers with the same observable and unobservable credentials. Differences in comparative advantages, though quantitatively important as well, have a much smaller impact than what has been found in research that relies on estimates from more restrictive dynamic Roy models. In Chapter 2 I estimate a flexible non-stationary variance components model of residual earnings dynamics and investigate if recent increases in residual inequality are caused by an increase of the variances of permanent, persistent or transitory shocks. My results suggest that underlying sources of increasing wage inequality are very different across education groups. Most importantly, only the lesser educated experience a large increase in earnings instability. Chapter 1 and 2 utilize a unique administrative data set from Germany that follows workers from the time of labor market entry until twenty-three years into their careers. In the last chapter I investigate empirically if a particular set of pre-labor market skills – namely university student achievement – can be fostered by assigning male teachers to male students and female teachers to female students. I find that being taught by a same-sex instructor helps students to improve their relative grade performance and the likelihood of completing a course, but the magnitudes of these effects are small.

This thesis first examines the determinants of earnings management in an international setting using the Limited Investor Attention Model of Hirshleifer and Teoh (2003). The model predicts that investor attention reduces earnings management. I have four key findings. First, I document that financial analysts curb adjusted absolute abnormal accruals and absolute performance-matched abnormal accruals in global firms. Second, I document that institutional block-holdings curb adjusted absolute abnormal accruals across the world. Third, I document that analyst following is related to more reduction in earnings management in common law countries than in code-law countries. Fourth, I find that institutional block-holders are more effective monitors in common law countries than in code law countries. This thesis also examines the relation between investor attention and stock mispricing of abnormal accruals in an international setting using the Limited Investor Attention Model of Hirshleifer and Teoh (2003). Consistent with the model’s hypothesis that investor attention reduces stock mispricing, I document three key findings. First, I find a significant and negative correlation between stock mispricing and analyst following in global firms. Second, stock mispricing is negatively correlated with institutional ownership in U.S. firms. Stock mispricing is not significantly correlated with institutional block-holdings in global firms. Third, stock mispricing per dollar of abnormal accrual is decreasing in analyst following for sufficiently large abnormal accruals in U.S. and global firms.

This dissertation is comprised of three papers. In Chapter 1 I analyze if career heterogeneity in terms of life-cycle earnings, occupational mobility and unemployment is predominantly driven by skills acquired prior to labor market entry or by decisions made and shocks accumulated over the working life. My study is based on a Dynamic Discrete Choice model that enriches the proto-typical dynamic Roy-model with a number of potentially important sources of career heterogeneity, such as match heterogeneity and permanent shocks to skills. I find that a large fraction of life-cycle income inequality is driven by match heterogeneity among workers with the same observable and unobservable credentials. Differences in comparative advantages, though quantitatively important as well, have a much smaller impact than what has been found in research that relies on estimates from more restrictive dynamic Roy models. In Chapter 2 I estimate a flexible non-stationary variance components model of residual earnings dynamics and investigate if recent increases in residual inequality are caused by an increase of the variances of permanent, persistent or transitory shocks. My results suggest that underlying sources of increasing wage inequality are very different across education groups. Most importantly, only the lesser educated experience a large increase in earnings instability. Chapter 1 and 2 utilize a unique administrative data set from Germany that follows workers from the time of labor market entry until twenty-three years into their careers. In the last chapter I investigate empirically if a particular set of pre-labor market skills – namely university student achievement – can be fostered by assigning male teachers to male students and female teachers to female students. I find that being taught by a same-sex instructor helps students to improve their relative grade performance and the likelihood of completing a course, but the magnitudes of these effects are small.

In this dissertation, I examine the impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. Earnings and analyst forecasts are important inputs into accounting valuation models. Their ability to reflect current and predict future firm performance can help valuation models predict intrinsic value. However, increasing earnings management and expectations management activities in recent years may have adversely affected the usefulness of these information items in firm valuation. This study shows that intrinsic value metrics estimated using manipulated earnings or forecasts have less ability to track stock prices and predict future returns through V/P ratios, providing evidence for the joint hypothesis of (i) long-term market efficiency and (ii) the negative impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. It contributes to the accounting literature in several ways. First, it challenges the conventional view that more accurate and less biased forecasts are necessarily of better quality and proposes to assess the quality of analyst forecasts directly by examining their usefulness. It also introduces an improved measure for expectations management and presents new evidence on (i) the usefulness of earnings and analyst forecasts in firm valuation; (ii) the negative impacts of earnings management and expectations management on this usefulness; and (iii) the overall performance of accounting valuation models in firm valuation.

In this dissertation, I examine the impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. Earnings and analyst forecasts are important inputs into accounting valuation models. Their ability to reflect current and predict future firm performance can help valuation models predict intrinsic value. However, increasing earnings management and expectations management activities in recent years may have adversely affected the usefulness of these information items in firm valuation. This study shows that intrinsic value metrics estimated using manipulated earnings or forecasts have less ability to track stock prices and predict future returns through V/P ratios, providing evidence for the joint hypothesis of (i) long-term market efficiency and (ii) the negative impact of earnings management and expectations management on the usefulness of earnings and analyst forecasts in firm valuation. It contributes to the accounting literature in several ways. First, it challenges the conventional view that more accurate and less biased forecasts are necessarily of better quality and proposes to assess the quality of analyst forecasts directly by examining their usefulness. It also introduces an improved measure for expectations management and presents new evidence on (i) the usefulness of earnings and analyst forecasts in firm valuation; (ii) the negative impacts of earnings management and expectations management on this usefulness; and (iii) the overall performance of accounting valuation models in firm valuation.

The United States of American has often been called “a nation of immigrants” due to its long immigration history. In fact, it absorbed large numbers of immigrants during the different epochs from all over the world. The economics issues of immigration are play a very important role which becoming increasingly considering. Therefore, the aim of this paper is analyze the trends of immigration to America and the determinants behind the migration decision in the United States. An analysis of the data shows that the migrants flow into America has increased substantially, and the trend of American immigration is upwards after the mid 1960s. From the literature review it appears that the impact of immigration on natives’ earnings and employment, is weak. However factors like wage differential between the origin and host countries, educational attainment and investment in human capital, language proficiency are important determinants of the extent of immigrants integration and assimilation in the new country.

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The main purpose of this study is to find out the relationship between the characteristics of board composition and earnings management. It is a case study of steel industry and telecommunications industry ,which have state-owned enterprises after privatization. From the perspective of earnings management, the Modified Jones Model is used for the detection of earnings management ,and the period of the study samples is from 2005 to 2007. There are six independent variables .They are the proportion of shareholding directors and supervisors, the pledged share ratio of directors and supervisors , the proportion of shareholding foreign investors, the proportion of shareholding government, the number of independent directors and the if the board has set the labor director or not. SPSS statistical software is used to do empirical analysis. The empirical results of this study shows that there is significant positively correlated between the proportion of shareholding directors and supervisors and earnings management ; there is significant negatively correlated between the proportion of shareholding foreign investors and earnings management ; there is significant negatively correlated between the proportion of shareholding government and earnings management. Above all , part of the variables of characteristics of board composition in this study are not significantly affected earnings management , resulting in some of the hypotheses do not hold .Thus, this study suggests that the concept of corporate governance in Taiwan is not already universal yet in the study samples, and Taiwan's independent directors just set up in the beginning stages of implementation. Besides, the labor director only interest in the labor rights issues, not in earnings management issues , and also they do not have the ability to judge them.

This study examines whether short-sellers and financial analysts develop complementary information about future earnings and returns and assesses whether investors can improve predictions made by each of these intermediaries using information provided by the other. The first main result is that the relative short interest ratio (shares sold short divided by total shares outstanding) contains information that is useful for predicting future earnings, beyond (i.e., incremental to) the information in analyst forecasts. I also find that analysts do not fully incorporate short interest information into their forecasts and demonstrate that analyst forecasts can be improved (i.e., can be made to be less biased and more accurate) by adjusting for short interest information. The second main result is that analyst forecast revisions contain information that is useful for predicting future abnormal returns, beyond the information in the relative short interest ratio. I demonstrate that portfolios of stocks formed based on consistent signals from short-sellers and analysts produce abnormal return spreads that are significantly larger than spreads produced by portfolios formed using signals from short-sellers alone. Collectively, the evidence suggests that short-sellers and analyst provide complementary information about future firm performance that is useful to investors.