| I examine the use of accounting information in external finance. In Chapter 1, I study the use of accounting disclosure in equity crowdfunding to understand how accounting and financial reporting facilitates start-up financing. I find no relation between historical accounting disclosure and start-up capital obtained from crowdfunding investors, on average. However, I find a positive relation between capital raised and the entrepreneur's long-term forecasts of expected future performance. In Chapter 2, I examine the use of financial covenants in private debt contracts when borrowers have incentives to increase the riskiness of the firm's investments. I find that debt contracts to borrowers with greater risk-taking incentives prior to contract inception are more likely to include a debt-to-earnings covenant. In Chapter 3, in co-authored work with Peter Demerjian and Jared Jennings, I examine whether the borrower's management earnings forecast accuracy is useful information in screening by providing an observable signal of the borrower's ability to anticipate future economic conditions. We find that borrowers with more accurate forecasts prior to contract inception receive a lower interest rate. |
