Research

Research interests: Corporate disclosure; Sustainability; Security analysts

Published Articles

Banerjee, S., H. Que, and R. Zhao. 2022. Clarity trumps content: An experiment on information acquisition in beauty contests. Journal of Economic Behavior & Organization. 145, 381-407.

When investors can access multiple information sources (e.g., firm disclosures, analyst reports, news and social media), strong coordination (beauty contest) incentives can lead them to ignore a firm disclosure if it is not sufficiently clear. Instead, investors may focus on information sources with high clarity but low content such as rumors and even fake news.

Banerjee, S. 2021. Does competition improve analysts’ forecast informativeness? Management Science. 67(5), 3219-3238.

Not always. Competition for higher rankings in forecast accuracy can reduce the informativeness of analyst forecasts. More intense competition can make forecasts less informative.

Banerjee, S., and M. Maier. 2016. Public information precision and coordination failure: An experiment. Journal of Accounting Research. 54(4), 941-985.

Greater transparency can lead to inferior economic outcomes such as coordination failures (bank runs) when public information is pessimistic. As such, a coarser, aggregated disclosure can be better (than a granular, dis-aggregated disclosure) in reducing coordination failures.

Zaheer, A., E. Hernandez, and S. Banerjee. 2010. Prior alliances with targets and acquisition performance in knowledge-intensive industries. Organization Science. 21(5), 1072 – 1091.

Prior alliances with a target company can improve the performance of an acquiring company when there is a large information asymmetry between the target and the acquirer (as in knowledge-intensive industries such as biotech and software).

Forbes, D. P., Manrakhan, S., & Banerjee, S. (2004). Strategic responses to an environmental jolt: Executive turnover in Internet IPOs. Journal of Private Equity, 63-69.

We develop a model that predicts the likelihood that publicly-traded start-up firms will respond to a sudden drop in environmental munificence by replacing their CEO. The model proposes that CEOs who were founders, those who had prior experience as CEOs, and those who also held the position of board chair will be less likely to be replaced.

Book Chapters

Banerjee, S., Bowie, N. E., & Pavone, C. (2006). An ethical analysis of the trust relationship. Handbook of trust research, 303-316.

Working Papers

Voluntary climate disclosures: A tale of two venues (with A. Chen, M. Li, V. Mehrotra, and R. Vijayaraghavan)

This paper studies the determinants and consequences of firms’ choice of disclosure venues for their voluntary disclosure of climate-related information. We consider two widely used venues for voluntary climate disclosure: Carbon Disclosure Project (CDP) and corporate social responsibility (CSR) reports. Disclosure in the CDP is arguably more standardized, granular, and climate-specific than in CSR reports.

Information acquisition and disclosure in forecasting contests (with E. Einhorn and N. Langberg)

In a forecasting contest, in which financial analysts strategically acquire and disclose information, sufficiently high rewards can (i) induce analysts to make untruthful forecasts; (ii) discourage weaker analysts’ information production; and (iii) reduce the price efficiency of analyst forecasts.

Clear and liquid: The interaction of firm disclosure and trader competition (with Efstathios Avdis)

Accuracy of disclosure (i.e., how accurately a disclosure reports a company’s future value) and clarity of disclosure (i.e., how well traders understand the disclosed information) have qualitatively different effects on trading in financial markets. Low-clarity disclosure can reduce a company’s market liquidity and trading volume.

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