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Strategic Corporate Disclosure Upon Liquidity Shock: Evidence from the Lehman Brothers Bond Rating ( 2016 )

Assistant Professor Lin Yupeng
: Accounting
In this paper, we found that, in response to a positive (negative) demand shock, managers strategically provide management forecasts with more negative (positive) information. This finding is robust to different measures of disclosure and various specifications that seek to rule out alternative explanations. Further evidence suggests that bond financing-dependent firms and financially constrained firms exhibit a greater sensitivity of corporate disclosure decisions to demand shocks in the bond market.
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