Stella Park

• Stella Park, Complex Disclosures and Investor Disagreement at Earnings Announcements. Abstract

  I examine whether complex disclosures of forward-looking, value-relevant information that is not in financial statements influence investor disagreement at subsequent earnings announcements. Conventional wisdom suggests that more extensive disclosure decreases information asymmetry among investors, which should mitigate disagreement in their interpretations of earnings. However, recent theories suggest that when disclosures contain more complex information that is difficult to interpret, investors are more likely to interpret the information differently. These differences can result in more disagreement among investors not only at the disclosure date, but also at the subsequent earnings announcement as they incorporate the pre-announcement differences in beliefs in their valuations of earnings. I examine my research question using new product announcements (NPAs), which provide information about new product introductions, such as the expected product release date, prices, product attributes, and other technological details. Using machine learning algorithms to assess the narrative content of NPAs, I predict and find that more complex components of NPAs are associated with greater investor disagreement at the NPA and subsequent earnings announcements. My findings suggest that efforts to improve the valuation of intangible assets such as product innovation through more detailed and complex disclosures may actually lead to greater investor disagreement over the valuation of firm earnings.

• Christopher Armstrong, Stella Park, Stephen Glaeser, Intellectual Property Rights, Holdup, and the Incentives for Innovation Disclosure. Abstract

  We study how the assignment of intellectual property rights for successful innovations between inventors and their employers influences disclosures about these innovations. To do so, we examine the effect of a court ruling that significantly shifted the assignment of intellectual property rights from inventors to their employers, but that was otherwise likely exogenous with respect to disclosure. Using a within-firm-year analysis across multiple firms, we find that firms accelerate their patent disclosures for innovations created by their inventors affected by the ruling, relative to their patent disclosures for innovations created by their inventors who were unaffected. Our results suggest that the assignment of intellectual property rights and the potential for hold up problems between inventors and their employers can affect disclosures about innovation.

• Catherine M. Schrand, Frank Zhou, Stella Park, Disclosure and Competition for Limited Investor Resources. Abstract

  This paper examines disclosure decisions of _rms facing greater competition for limited investor resources. Theory posits that firms use disclosure to compete with other firms for informed investors when investor resources are limited (Fishman and Hagerty, 1989). Consistent with this investor-competition role for disclosure, we find that when firms compete more for investors, they issue more guidance, especially capital expenditure forecasts. The guidance increases liquidity and price efficiency, but the effects decrease as guidance serves more of an investor-competition role, consistent with disclosures of one firm imposing a negative externality on other firms that compete for the same investor resources.

• Jeremy Michels and Stella Park (Working), Is Disclosure Priced Ex Ante?. Abstract

  A large literature examines the relation between a firm’s disclosure policy and its required return. However, this prior work typically takes an ex post perspective, examining how disclosure affects a firm’s required return after the disclosure is made. Thus, it does not examine the possibility that the anticipation of the disclosure increases risk in the period leading up to the disclosure, potentially offsetting the decrease in risk the disclosure sets in motion. This paper thus addresses a gap in the literature by examining how a firm’s disclosure policy relates to risk both at the time of the disclosure and over longer horizons. Findings indicate that firms with more informative disclosure policies experience a greater increase in risk at the time of the disclosure, but that these firms have lower required returns overall. In sum, our evidence supports the notion that investors price disclosure ex ante.

   

Past Courses

• ACCT1020 - Strategic Cost Analysis

  Strategic Cost Analysis is the process of analyzing and managing costs in order to improve the strategic position of the business. This goal can be accomplished by having a thorough understanding of which activities and costs support an organization's strategic position and which activities and costs either weaken it or have no impact. Subsequent cost management efforts can then focus on reducing or limiting expenditures on activities that add little or no strategic value, while increasing expenditures on activities that support the strategic position of the organization. Performance can then be evaluated to ensure that the chosen actions are taken, and that these actions are yielding improved strategic performance. Throughout the course, a strategic cost analysis and management framework will be applied across functions and organizations to highlight the cost analysis and performance evaluation methods available to forecast financial performance and improve strategic position.

Knowledge @ Wharton

• Building Stronger Family Offices by Sharing Knowledge and Securing the Future, Knowledge @ Wharton - 11/21/2024
• State of the NBA with Seth Partnow, Knowledge @ Wharton - 11/20/2024
• How Are Companies Really Using AI? A New Report Has Answers, Knowledge @ Wharton - 11/19/2024
• Impact vs. Time: A Leader’s Guide to Slow Productivity, Knowledge @ Wharton - 11/19/2024
• Kevin O’Leary Illustrates the Benefits of Tariffs for U.S. Businesses, Knowledge @ Wharton - 11/19/2024
• Boosting Donations Through Self-expressive Choices | Jonah Berger, Knowledge @ Wharton - 11/19/2024
• Why Are Hospitals So Expensive?, Knowledge @ Wharton - 11/18/2024
• New Phenomena in Behavioral and Social Investing, Knowledge @ Wharton - 11/18/2024
• Bigger Hospitals, Better Care? Wharton Research Finds Benefits Are Only at the Operational Level, Knowledge @ Wharton - 11/14/2024
• Linda Dow Cash, CEO, Two Chicks Cocktails, Knowledge @ Wharton - 11/14/2024