Joseph Pacelli - Academia.edu (original) (raw)

Papers by Joseph Pacelli

Research paper thumbnail of Do Jobseekers Value Diversity Information? Evidence from a Field Experiment

SSRN Electronic Journal, 2022

Research paper thumbnail of Human Versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations

The Accounting Review, 2022

We provide the first comprehensive analysis of the properties of investment recommendations gener... more We provide the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analyst recommendations differ from those produced by traditional “human” research analysts across several important dimensions. First, Robo-Analysts produce a more balanced distribution of buy, hold, and sell recommendations than do human analysts and are less likely to recommend “glamour” stocks and firms with prospective investment banking business. Second, automation allows Robo-Analysts to revise their recommendations more frequently than human analysts and incorporate information from complex periodic filings. Third, while Robo-Analysts’ recommendations exhibit weak short-window return reactions, they have long-term investment value. Specifically, portfolios formed based on the buy recommendations of Robo-Analysts significantly outperfor...

Research paper thumbnail of Security Code Violations , Analysts ’ Forecast Quality , and Corporate Culture

Using a hand-collected sample of U.S. security code violations enforced by the Financial Industry... more Using a hand-collected sample of U.S. security code violations enforced by the Financial Industry Regulatory Authority, I show that violations occurring outside of financial institutions’ equity research divisions are positively associated with the forecast errors produced by analysts in financial institutions’ equity research divisions. Further, I find that security violations are also associated with more upwardly biased forecasts following recent equity underwritings, more downwardly biased forecasts for firms that narrowly “meet or beat” consensus forecast estimates, and less informative analyst reports. The association between security code violations and forecast errors appears to be less pronounced for forecasts produced by All-Star analysts, who have higher levels of reputational capital to preserve. Overall, these findings provide evidence consistent with a common profitoriented corporate culture influencing employee behavior across a multitude of business activities within...

Research paper thumbnail of Does FOIA Foil the SEC's Intent to Keep Investigations Confidential?

PSN: Public Administration (Institutions) (Topic), 2020

The Securities Exchange Commission (SEC) has a long-standing policy to keep formal investigations... more The Securities Exchange Commission (SEC) has a long-standing policy to keep formal investigations confidential. In this study, we examine the extent to which compliance with the Freedom of Information Act (FOIA) provides investors with information about on-going SEC investigations. We exploit a unique empirical setting whereby the SEC denies FOIA requests due to ongoing enforcement proceedings (hereafter, exemption denials). We find that exemption denials predict a substantial number of ongoing and future SEC investigations. Exemption denials are also associated with significant negative future abnormal returns, which is consistent with exemption denials providing a noisy public signal that allows certain sophisticated investors to earn future abnormal returns. Overall, our findings suggest that information transparency laws, such as FOIA, have the potential to limit the SEC’s ability to maintain effective and confidential investigations.

Research paper thumbnail of Countercyclical Prudential Buffers and Bank Risk-taking

Econometrics: Applied Econometric Modeling in Financial Economics eJournal, 2020

We investigate the effect of an exogenous change in loan loss provisioning rules on bank risk tak... more We investigate the effect of an exogenous change in loan loss provisioning rules on bank risk taking. To identify the effect we exploit that only banks with a high conditional accounting conservatism (CAC) in the pre-adoption period should respond to the change. We conduct a difference-in-differences analysis using a large sample of matched bank-firm data around the introduction of dynamic loan loss provisioning in Spain in 2000. The main result is that banks with a high CAC in the pre-adoption period significantly increased their risk taking in the post-adoption period. These banks lend significantly more to ex ante riskier borrowers, lend more to borrowers with lower accounting quality, and lend more to borrowers that exhibit higher loan growth. Our findings on bank risk taking are consistent with reduced screening and monitoring incentives and highlight unintended effects of the change in the loan loss provisioning rules.

Research paper thumbnail of Does the Freedom of Information Act Foil the Securities and Exchange Commission's Intent to Keep Investigations Confidential?

Manag. Sci., 2021

The Securities and Exchange Commission (SEC) has a long-standing policy to keep formal investigat... more The Securities and Exchange Commission (SEC) has a long-standing policy to keep formal investigations confidential. In this study, we examine the extent to which compliance with the Freedom of Info...

Research paper thumbnail of Do Loan Officers Impact Lending Decisions? Evidence from the Corporate Loan Market

We examine the role of loan officers in the private debt market. We construct a comprehensive dat... more We examine the role of loan officers in the private debt market. We construct a comprehensive database that allows us to track the employment history, performance and lending terms related to over 7,000 loan officers employed by major U.S. corporate lending departments from the period spanning 1994 to 2012. We find evidence consistent with loan officers having a substantial impact on ex-post loan performance, after controlling for observable lending terms, borrower, bank, and industry characteristics. Moreover, loan officers also appear to be more important than banks in explaining the variation of loan performance. We further show that loan officers exhibit heterogeneous loan origination styles as reflected in their lending terms and these styles appear to be associated with loan performance. Finally, we find that loan officers play an equally important role in both large banks and small banks and that their future lending performance is highly influenced by early employment choice...

Research paper thumbnail of Credit and Punishment : The Turnover-Performance Sensitivity of Wall Street Bankers

This study examines the relationship between negative credit events (i.e., defaults, bankruptcies... more This study examines the relationship between negative credit events (i.e., defaults, bankruptcies, and rating downgrades) and career turnover for Wall Street bankers underwriting syndicated loans. We construct a comprehensive dataset containing the identities and employment histories of nearly 1,500 loan officers employed by major corporate banking departments from the period spanning 1994 to 2014. First, following a negative credit shock in a loan officer’s portfolio, the officer is more likely to depart her bank, transition to a lower-ranked bank, and face a demotion in the future. The results continue to hold when we identify exogenous credit events due to collateral shocks to the borrower. In addition, we confirm that termination practices effectively incentivize loan officers to impose stricter lending terms on future loans (i.e., more covenants and greater covenant strictness). Overall, our findings confirm that Wall Street bankers are disciplined for large-scale credit losses.

Research paper thumbnail of Shocks to Lenders' Monitoring Incentives and Firms' Financial Reporting Choices

We examine the effect of shocks arising from unrelated loan defaults in a lender's portfolio ... more We examine the effect of shocks arising from unrelated loan defaults in a lender's portfolio (i.e., lender-side defaults) on borrowers' financial reporting decisions. Using a broad sample of syndicated loans, we find that lender-side defaults are associated with higher levels of timely loss recognition from non-defaulting borrowers, consistent with these defaults motivating lenders to re-evaluate their pre-existing monitoring standards and demand more information regarding downside risk from non-defaulting borrowers. Increases in timely loss recognition following lender-side defaults are associated with reductions in covenant slack, increases in covenant violations, and higher levels of future loans from the same lender, consistent with lenders and firms sharing the benefits associated with changes in disclosure. In additional analyses, we demonstrate that the effect of lender-side defaults on borrowers' timely loss recognition is more pronounced when renegotiation costs...

Research paper thumbnail of Integrity Culture and Analyst Forecast Quality

This study examines the relationship between financial institutions’ integrity culture and analys... more This study examines the relationship between financial institutions’ integrity culture and analysts’ forecast accuracy. Integrity culture represents the extent to which norms and values within a financial institution promote high ethical standards and honesty. Using data collected from the Financial Industry Regulatory Authority (FINRA), I measure the weakness of integrity culture in financial institutions based on security code violations arising in business areas unrelated to equity research. I find that FINRA violations are associated with lower quality forecasts, and that these results are robust to a host of alternative explanations, including poor internal controls, weak governance, and other cultural forces. Specifically, violations are associated with less accurate, more strategically biased and less informative earnings forecasts. This study sheds light on how cultural forces can influence the behavior of security analysts.

Research paper thumbnail of Dirty Money: How Banks Influence Financial Crime

SSRN Electronic Journal, 2020

In this paper we present an IoT based solution that can reduce the complexity of crowd estimation... more In this paper we present an IoT based solution that can reduce the complexity of crowd estimation. About the human crowd estimation many technique are in existence but now a day's more work are going on in the field of IoT, because this is era of IoT and most of the every organization is shifted towards IoT based system. So we are also proposed this system in this field and we are using the Respberry Pi-3 which are having quad core processor that can very useful and gives better result and gives accurate number even in the humans are very close to each others. This IoT based model can easily implements in the crowded areas and monitor the same in this area. The camera module in this model also helps to differentiate between human and other bodies. As this is a mobile model it can easily fix on the walls of street light and in the time of dark or in night the camera capture clear image for process in the presence of street light. So that this model gives better result almost 70% better result in compare to exiting approaches.

Research paper thumbnail of Man Versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations

SSRN Electronic Journal, 2020

Advances in financial technology (FinTech) have revolutionized various product offerings in the f... more Advances in financial technology (FinTech) have revolutionized various product offerings in the financial services industry. One area of particular interest for this technology is the production of investment recommendations. Our study provides the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analyst recommendations differ from those produced by traditional “human” research analysts across several dimensions. First, Robo-Analysts collectively produce a more balanced distribution of buy, hold, and sell recommendations than do human analysts, consistent with them being less subject to behavioral biases and conflicts of interest. Second, consistent with automation facilitating a greater scale of research production, Robo-Analysts revise their recommendations more frequently than human analysts and also adopt different production processes. Their recommendation revisions rely less on earnings announcements, and more on the large volumes of data released in firms’ annual reports. Third, Robo-Analysts’ recommendation revisions exhibit weaker short-window return reactions, suggesting that investors do not trade on their signals. Importantly, portfolios formed based on the buy recommendations of Robo-Analysts appear to outperform those of human analysts, suggesting that their buy calls are more profitable. Overall, our results suggest that Robo-Analysts are a valuable, alternative information intermediary to traditional sell-side analysts for investment advice.

Research paper thumbnail of Out of Balance: Do Analysts Issue Sell Recommendations to Manage their Recommendation Distributions?

SSRN Electronic Journal, 2020

Using the passage of Global Settlement as an exogenous shock, we show that disclosure requirement... more Using the passage of Global Settlement as an exogenous shock, we show that disclosure requirements about analysts’ recommendation distributions incentivize analysts to manage their recommendation distributions to reduce concerns about perceived objectivity. Following the regulation, analysts frequently issue sell recommendations concurrently with buy recommendations, consistent with recommendation distribution management. Analysts’ propensity to provide concurrent sell recommendations increases as recommendation distributions deviate from historical benchmarks and when public scrutiny and visibility is high. Importantly, we find no evidence of such behavior prior to Global Settlement suggesting unintended consequences associated with the regulation. This behavior has important implications for investors: sell recommendations issued concurrently with buy recommendations provide a weaker investment signal, as they exhibit muted return reactions and are less likely to be supported by downward earnings forecast revisions. Overall, our results highlight the importance of analysts’ distributional incentives in influencing the quality of recommendations.

Research paper thumbnail of Internal Control Weaknesses and the Demand for Financial Skills: Evidence from U.S. Job Postings

SSRN Electronic Journal, 2020

Research paper thumbnail of The Influence of Loan Officers on Loan Contract Design and Performance

SSRN Electronic Journal, 2019

We investigate the extent to which loan officers generate independent, individual effects on the ... more We investigate the extent to which loan officers generate independent, individual effects on the design and performance of syndicated loans. We construct a large database containing the identities of loan officers involved in structuring syndicated loan deals, allowing us to systematically disentangle borrower, bank, and loan officer fixed effects. We find that loan officers have significant influence on interest spreads, loan covenant design, and loan performance. Inclusion of borrower fixed effects increases our power to rule out the alternative that loan officer fixed effects reflect the matching of officers to borrowers based on time-invariant borrower characteristics. We document heterogeneity in loan officers’ influence across loan contract terms, with loan officers exerting stronger influence over covenant package design than over interest spreads, but marginal influence on loan maturity. Lead officers have greater influence than participant officers over covenant package design and loan performance, but less robust differential influence on interest spreads.

Research paper thumbnail of Cultural Diversity on Wall Street: Evidence from Sell-Side Analystss Forecasts

SSRN Electronic Journal, 2017

This study examines the relationship between cultural diversity in the financial services industr... more This study examines the relationship between cultural diversity in the financial services industry and the quality of analysts' consensus forecasts, a key factor in setting market earnings expectations. We construct measures of cultural diversity by tracing back analysts' cultural origins based on their surname. We find evidence consistent with higher levels of cultural diversity improving the accuracy of analysts' consensus forecasts. We document positive and significant associations between the number of unique cultures contributing to the consensus analyst forecast and the overall accuracy of the forecast. The positive effects of diversity on consensus forecast accuracy are more pronounced when firms have more opaque information environments, but also exhibit declining returns to scale. In additional analyses, we demonstrate that the relationship between cultural diversity and forecast accuracy is robust to controlling for other dimensions of diversity (i.e., gender and educational diversity). Further, using exogenous shocks to analyst coverage resulting from brokerage house mergers, we find that drops in analyst coverage that reduce cultural diversity have a more significant impact on forecast accuracy. Finally, cultural diversity is also associated with more interaction on conference calls (as evidenced by analysts raising more questions on conference calls), and lower forecast bias and reduced forecast dispersion.

Research paper thumbnail of How Does Going Public Affect Employee Behavior? Evidence from Brokerage IPOs

SSRN Electronic Journal, 2019

This study examines the effects of initial public offerings (IPOs) by brokerages (henceforth, bro... more This study examines the effects of initial public offerings (IPOs) by brokerages (henceforth, broker IPOs) on the objectivity of sell-side equity analysts employed by those brokers. Using a generalized difference-in-differences research design, we provide evidence that analysts produce more optimistically biased earnings forecasts relative to their peers following their employer’s IPO. We further find that the effect of broker IPOs on analysts’ forecast bias is more pronounced when analysts have greater economic incentives for optimistic bias. We also find that brokers hire more biased analysts following their IPOs. Our results are consistent with IPOs impacting individual non-executive employees by increasing the alignment of their incentives with those of the firm.

Research paper thumbnail of Audit personnel salaries and audit quality

Review of Accounting Studies, 2018

This study examines the relation between audit personnel salaries and office-level audit quality.... more This study examines the relation between audit personnel salaries and office-level audit quality. We measure audit personnel salaries at the associate, senior, and manager ranks for Big 4 audit offices from 2004 to 2013, using unique individual-auditor-level data obtained from the U.S. Department of Labor. We find that offices that pay lower salaries have a higher percentage of clients that experience restatements. In related analyses, we also find lower levels of audit quality when audit employees are paid less, relative to other lines of service in accounting firms. Finally, we document positive and significant associations between salary and fees, suggesting that audit offices pass some of the cost of higher labor onto their clients. Overall, our findings provide important initial evidence on the role of audit salary and its relation to audit quality and audit fees.

Research paper thumbnail of Corporate culture and analyst catering

Journal of Accounting and Economics, 2018

Abstract This study examines the relation between financial institutions’ corporate culture and t... more Abstract This study examines the relation between financial institutions’ corporate culture and the quality of analysts’ research services. Using data collected from the Financial Industry Regulatory Authority, I measure the weakness of financial institutions’ corporate culture based on violations observed in securities activities unrelated to equity research. I find evidence demonstrating an association between weak corporate culture and analysts’ providing research products catered to institutional clients at the expense of individual investors. Specifically, FINRA violations are associated with both (i) less accurate forecasts and less informative reports, and (ii) higher institutional commission revenues and more broker-hosted conferences for select institutional clients.

Research paper thumbnail of What Begets Loan Performance? The Human Factor in the Corporate Lending Market

SSRN Electronic Journal, 2016

We examine and quantify the economic importance of loan officers in the corporate lending process... more We examine and quantify the economic importance of loan officers in the corporate lending process. We construct a comprehensive database that allows us to track the lending terms and loan performance of corporate loans issued by over 7,000 loan officers employed by major U.S. corporate lending departments during the period spanning from 1994 to 2012. We find that loan officers have a substantial impact on both the contract terms (loan spreads, covenants, and maturity) and the performance of corporate loans. The results are robust to controlling for endogeneity concerns related to assortative matching in the labor market. Loan officers' influence on the lending process has not declined much over time, despite technological innovations designed to automate lending. Furthermore, these officers exhibit a greater impact on the lending process in larger, more complex organizations in which information asymmetries are more pronounced. Overall, our study sheds light on the inner workings of corporate banking departments and suggests that a significant portion of lending decisions are delegated to individual loan officers.

Research paper thumbnail of Do Jobseekers Value Diversity Information? Evidence from a Field Experiment

SSRN Electronic Journal, 2022

Research paper thumbnail of Human Versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations

The Accounting Review, 2022

We provide the first comprehensive analysis of the properties of investment recommendations gener... more We provide the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analyst recommendations differ from those produced by traditional “human” research analysts across several important dimensions. First, Robo-Analysts produce a more balanced distribution of buy, hold, and sell recommendations than do human analysts and are less likely to recommend “glamour” stocks and firms with prospective investment banking business. Second, automation allows Robo-Analysts to revise their recommendations more frequently than human analysts and incorporate information from complex periodic filings. Third, while Robo-Analysts’ recommendations exhibit weak short-window return reactions, they have long-term investment value. Specifically, portfolios formed based on the buy recommendations of Robo-Analysts significantly outperfor...

Research paper thumbnail of Security Code Violations , Analysts ’ Forecast Quality , and Corporate Culture

Using a hand-collected sample of U.S. security code violations enforced by the Financial Industry... more Using a hand-collected sample of U.S. security code violations enforced by the Financial Industry Regulatory Authority, I show that violations occurring outside of financial institutions’ equity research divisions are positively associated with the forecast errors produced by analysts in financial institutions’ equity research divisions. Further, I find that security violations are also associated with more upwardly biased forecasts following recent equity underwritings, more downwardly biased forecasts for firms that narrowly “meet or beat” consensus forecast estimates, and less informative analyst reports. The association between security code violations and forecast errors appears to be less pronounced for forecasts produced by All-Star analysts, who have higher levels of reputational capital to preserve. Overall, these findings provide evidence consistent with a common profitoriented corporate culture influencing employee behavior across a multitude of business activities within...

Research paper thumbnail of Does FOIA Foil the SEC's Intent to Keep Investigations Confidential?

PSN: Public Administration (Institutions) (Topic), 2020

The Securities Exchange Commission (SEC) has a long-standing policy to keep formal investigations... more The Securities Exchange Commission (SEC) has a long-standing policy to keep formal investigations confidential. In this study, we examine the extent to which compliance with the Freedom of Information Act (FOIA) provides investors with information about on-going SEC investigations. We exploit a unique empirical setting whereby the SEC denies FOIA requests due to ongoing enforcement proceedings (hereafter, exemption denials). We find that exemption denials predict a substantial number of ongoing and future SEC investigations. Exemption denials are also associated with significant negative future abnormal returns, which is consistent with exemption denials providing a noisy public signal that allows certain sophisticated investors to earn future abnormal returns. Overall, our findings suggest that information transparency laws, such as FOIA, have the potential to limit the SEC’s ability to maintain effective and confidential investigations.

Research paper thumbnail of Countercyclical Prudential Buffers and Bank Risk-taking

Econometrics: Applied Econometric Modeling in Financial Economics eJournal, 2020

We investigate the effect of an exogenous change in loan loss provisioning rules on bank risk tak... more We investigate the effect of an exogenous change in loan loss provisioning rules on bank risk taking. To identify the effect we exploit that only banks with a high conditional accounting conservatism (CAC) in the pre-adoption period should respond to the change. We conduct a difference-in-differences analysis using a large sample of matched bank-firm data around the introduction of dynamic loan loss provisioning in Spain in 2000. The main result is that banks with a high CAC in the pre-adoption period significantly increased their risk taking in the post-adoption period. These banks lend significantly more to ex ante riskier borrowers, lend more to borrowers with lower accounting quality, and lend more to borrowers that exhibit higher loan growth. Our findings on bank risk taking are consistent with reduced screening and monitoring incentives and highlight unintended effects of the change in the loan loss provisioning rules.

Research paper thumbnail of Does the Freedom of Information Act Foil the Securities and Exchange Commission's Intent to Keep Investigations Confidential?

Manag. Sci., 2021

The Securities and Exchange Commission (SEC) has a long-standing policy to keep formal investigat... more The Securities and Exchange Commission (SEC) has a long-standing policy to keep formal investigations confidential. In this study, we examine the extent to which compliance with the Freedom of Info...

Research paper thumbnail of Do Loan Officers Impact Lending Decisions? Evidence from the Corporate Loan Market

We examine the role of loan officers in the private debt market. We construct a comprehensive dat... more We examine the role of loan officers in the private debt market. We construct a comprehensive database that allows us to track the employment history, performance and lending terms related to over 7,000 loan officers employed by major U.S. corporate lending departments from the period spanning 1994 to 2012. We find evidence consistent with loan officers having a substantial impact on ex-post loan performance, after controlling for observable lending terms, borrower, bank, and industry characteristics. Moreover, loan officers also appear to be more important than banks in explaining the variation of loan performance. We further show that loan officers exhibit heterogeneous loan origination styles as reflected in their lending terms and these styles appear to be associated with loan performance. Finally, we find that loan officers play an equally important role in both large banks and small banks and that their future lending performance is highly influenced by early employment choice...

Research paper thumbnail of Credit and Punishment : The Turnover-Performance Sensitivity of Wall Street Bankers

This study examines the relationship between negative credit events (i.e., defaults, bankruptcies... more This study examines the relationship between negative credit events (i.e., defaults, bankruptcies, and rating downgrades) and career turnover for Wall Street bankers underwriting syndicated loans. We construct a comprehensive dataset containing the identities and employment histories of nearly 1,500 loan officers employed by major corporate banking departments from the period spanning 1994 to 2014. First, following a negative credit shock in a loan officer’s portfolio, the officer is more likely to depart her bank, transition to a lower-ranked bank, and face a demotion in the future. The results continue to hold when we identify exogenous credit events due to collateral shocks to the borrower. In addition, we confirm that termination practices effectively incentivize loan officers to impose stricter lending terms on future loans (i.e., more covenants and greater covenant strictness). Overall, our findings confirm that Wall Street bankers are disciplined for large-scale credit losses.

Research paper thumbnail of Shocks to Lenders' Monitoring Incentives and Firms' Financial Reporting Choices

We examine the effect of shocks arising from unrelated loan defaults in a lender's portfolio ... more We examine the effect of shocks arising from unrelated loan defaults in a lender's portfolio (i.e., lender-side defaults) on borrowers' financial reporting decisions. Using a broad sample of syndicated loans, we find that lender-side defaults are associated with higher levels of timely loss recognition from non-defaulting borrowers, consistent with these defaults motivating lenders to re-evaluate their pre-existing monitoring standards and demand more information regarding downside risk from non-defaulting borrowers. Increases in timely loss recognition following lender-side defaults are associated with reductions in covenant slack, increases in covenant violations, and higher levels of future loans from the same lender, consistent with lenders and firms sharing the benefits associated with changes in disclosure. In additional analyses, we demonstrate that the effect of lender-side defaults on borrowers' timely loss recognition is more pronounced when renegotiation costs...

Research paper thumbnail of Integrity Culture and Analyst Forecast Quality

This study examines the relationship between financial institutions’ integrity culture and analys... more This study examines the relationship between financial institutions’ integrity culture and analysts’ forecast accuracy. Integrity culture represents the extent to which norms and values within a financial institution promote high ethical standards and honesty. Using data collected from the Financial Industry Regulatory Authority (FINRA), I measure the weakness of integrity culture in financial institutions based on security code violations arising in business areas unrelated to equity research. I find that FINRA violations are associated with lower quality forecasts, and that these results are robust to a host of alternative explanations, including poor internal controls, weak governance, and other cultural forces. Specifically, violations are associated with less accurate, more strategically biased and less informative earnings forecasts. This study sheds light on how cultural forces can influence the behavior of security analysts.

Research paper thumbnail of Dirty Money: How Banks Influence Financial Crime

SSRN Electronic Journal, 2020

In this paper we present an IoT based solution that can reduce the complexity of crowd estimation... more In this paper we present an IoT based solution that can reduce the complexity of crowd estimation. About the human crowd estimation many technique are in existence but now a day's more work are going on in the field of IoT, because this is era of IoT and most of the every organization is shifted towards IoT based system. So we are also proposed this system in this field and we are using the Respberry Pi-3 which are having quad core processor that can very useful and gives better result and gives accurate number even in the humans are very close to each others. This IoT based model can easily implements in the crowded areas and monitor the same in this area. The camera module in this model also helps to differentiate between human and other bodies. As this is a mobile model it can easily fix on the walls of street light and in the time of dark or in night the camera capture clear image for process in the presence of street light. So that this model gives better result almost 70% better result in compare to exiting approaches.

Research paper thumbnail of Man Versus Machine: A Comparison of Robo-Analyst and Traditional Research Analyst Investment Recommendations

SSRN Electronic Journal, 2020

Advances in financial technology (FinTech) have revolutionized various product offerings in the f... more Advances in financial technology (FinTech) have revolutionized various product offerings in the financial services industry. One area of particular interest for this technology is the production of investment recommendations. Our study provides the first comprehensive analysis of the properties of investment recommendations generated by “Robo-Analysts,” which are human-analyst-assisted computer programs conducting automated research analysis. Our results indicate that Robo-Analyst recommendations differ from those produced by traditional “human” research analysts across several dimensions. First, Robo-Analysts collectively produce a more balanced distribution of buy, hold, and sell recommendations than do human analysts, consistent with them being less subject to behavioral biases and conflicts of interest. Second, consistent with automation facilitating a greater scale of research production, Robo-Analysts revise their recommendations more frequently than human analysts and also adopt different production processes. Their recommendation revisions rely less on earnings announcements, and more on the large volumes of data released in firms’ annual reports. Third, Robo-Analysts’ recommendation revisions exhibit weaker short-window return reactions, suggesting that investors do not trade on their signals. Importantly, portfolios formed based on the buy recommendations of Robo-Analysts appear to outperform those of human analysts, suggesting that their buy calls are more profitable. Overall, our results suggest that Robo-Analysts are a valuable, alternative information intermediary to traditional sell-side analysts for investment advice.

Research paper thumbnail of Out of Balance: Do Analysts Issue Sell Recommendations to Manage their Recommendation Distributions?

SSRN Electronic Journal, 2020

Using the passage of Global Settlement as an exogenous shock, we show that disclosure requirement... more Using the passage of Global Settlement as an exogenous shock, we show that disclosure requirements about analysts’ recommendation distributions incentivize analysts to manage their recommendation distributions to reduce concerns about perceived objectivity. Following the regulation, analysts frequently issue sell recommendations concurrently with buy recommendations, consistent with recommendation distribution management. Analysts’ propensity to provide concurrent sell recommendations increases as recommendation distributions deviate from historical benchmarks and when public scrutiny and visibility is high. Importantly, we find no evidence of such behavior prior to Global Settlement suggesting unintended consequences associated with the regulation. This behavior has important implications for investors: sell recommendations issued concurrently with buy recommendations provide a weaker investment signal, as they exhibit muted return reactions and are less likely to be supported by downward earnings forecast revisions. Overall, our results highlight the importance of analysts’ distributional incentives in influencing the quality of recommendations.

Research paper thumbnail of Internal Control Weaknesses and the Demand for Financial Skills: Evidence from U.S. Job Postings

SSRN Electronic Journal, 2020

Research paper thumbnail of The Influence of Loan Officers on Loan Contract Design and Performance

SSRN Electronic Journal, 2019

We investigate the extent to which loan officers generate independent, individual effects on the ... more We investigate the extent to which loan officers generate independent, individual effects on the design and performance of syndicated loans. We construct a large database containing the identities of loan officers involved in structuring syndicated loan deals, allowing us to systematically disentangle borrower, bank, and loan officer fixed effects. We find that loan officers have significant influence on interest spreads, loan covenant design, and loan performance. Inclusion of borrower fixed effects increases our power to rule out the alternative that loan officer fixed effects reflect the matching of officers to borrowers based on time-invariant borrower characteristics. We document heterogeneity in loan officers’ influence across loan contract terms, with loan officers exerting stronger influence over covenant package design than over interest spreads, but marginal influence on loan maturity. Lead officers have greater influence than participant officers over covenant package design and loan performance, but less robust differential influence on interest spreads.

Research paper thumbnail of Cultural Diversity on Wall Street: Evidence from Sell-Side Analystss Forecasts

SSRN Electronic Journal, 2017

This study examines the relationship between cultural diversity in the financial services industr... more This study examines the relationship between cultural diversity in the financial services industry and the quality of analysts' consensus forecasts, a key factor in setting market earnings expectations. We construct measures of cultural diversity by tracing back analysts' cultural origins based on their surname. We find evidence consistent with higher levels of cultural diversity improving the accuracy of analysts' consensus forecasts. We document positive and significant associations between the number of unique cultures contributing to the consensus analyst forecast and the overall accuracy of the forecast. The positive effects of diversity on consensus forecast accuracy are more pronounced when firms have more opaque information environments, but also exhibit declining returns to scale. In additional analyses, we demonstrate that the relationship between cultural diversity and forecast accuracy is robust to controlling for other dimensions of diversity (i.e., gender and educational diversity). Further, using exogenous shocks to analyst coverage resulting from brokerage house mergers, we find that drops in analyst coverage that reduce cultural diversity have a more significant impact on forecast accuracy. Finally, cultural diversity is also associated with more interaction on conference calls (as evidenced by analysts raising more questions on conference calls), and lower forecast bias and reduced forecast dispersion.

Research paper thumbnail of How Does Going Public Affect Employee Behavior? Evidence from Brokerage IPOs

SSRN Electronic Journal, 2019

This study examines the effects of initial public offerings (IPOs) by brokerages (henceforth, bro... more This study examines the effects of initial public offerings (IPOs) by brokerages (henceforth, broker IPOs) on the objectivity of sell-side equity analysts employed by those brokers. Using a generalized difference-in-differences research design, we provide evidence that analysts produce more optimistically biased earnings forecasts relative to their peers following their employer’s IPO. We further find that the effect of broker IPOs on analysts’ forecast bias is more pronounced when analysts have greater economic incentives for optimistic bias. We also find that brokers hire more biased analysts following their IPOs. Our results are consistent with IPOs impacting individual non-executive employees by increasing the alignment of their incentives with those of the firm.

Research paper thumbnail of Audit personnel salaries and audit quality

Review of Accounting Studies, 2018

This study examines the relation between audit personnel salaries and office-level audit quality.... more This study examines the relation between audit personnel salaries and office-level audit quality. We measure audit personnel salaries at the associate, senior, and manager ranks for Big 4 audit offices from 2004 to 2013, using unique individual-auditor-level data obtained from the U.S. Department of Labor. We find that offices that pay lower salaries have a higher percentage of clients that experience restatements. In related analyses, we also find lower levels of audit quality when audit employees are paid less, relative to other lines of service in accounting firms. Finally, we document positive and significant associations between salary and fees, suggesting that audit offices pass some of the cost of higher labor onto their clients. Overall, our findings provide important initial evidence on the role of audit salary and its relation to audit quality and audit fees.

Research paper thumbnail of Corporate culture and analyst catering

Journal of Accounting and Economics, 2018

Abstract This study examines the relation between financial institutions’ corporate culture and t... more Abstract This study examines the relation between financial institutions’ corporate culture and the quality of analysts’ research services. Using data collected from the Financial Industry Regulatory Authority, I measure the weakness of financial institutions’ corporate culture based on violations observed in securities activities unrelated to equity research. I find evidence demonstrating an association between weak corporate culture and analysts’ providing research products catered to institutional clients at the expense of individual investors. Specifically, FINRA violations are associated with both (i) less accurate forecasts and less informative reports, and (ii) higher institutional commission revenues and more broker-hosted conferences for select institutional clients.

Research paper thumbnail of What Begets Loan Performance? The Human Factor in the Corporate Lending Market

SSRN Electronic Journal, 2016

We examine and quantify the economic importance of loan officers in the corporate lending process... more We examine and quantify the economic importance of loan officers in the corporate lending process. We construct a comprehensive database that allows us to track the lending terms and loan performance of corporate loans issued by over 7,000 loan officers employed by major U.S. corporate lending departments during the period spanning from 1994 to 2012. We find that loan officers have a substantial impact on both the contract terms (loan spreads, covenants, and maturity) and the performance of corporate loans. The results are robust to controlling for endogeneity concerns related to assortative matching in the labor market. Loan officers' influence on the lending process has not declined much over time, despite technological innovations designed to automate lending. Furthermore, these officers exhibit a greater impact on the lending process in larger, more complex organizations in which information asymmetries are more pronounced. Overall, our study sheds light on the inner workings of corporate banking departments and suggests that a significant portion of lending decisions are delegated to individual loan officers.