Jeroen K. G. Koenraadt

We describe the development of public company auditing in the U.S. in the early 20th century to gain perspective on current developments in environmental, social, and governance (ESG) assurance. Using a broad sample of historical annual reports spanning four decades, we document three facts: first, the spread of public company auditing occurred steadily over the span of several decades. Second, audit services were initially heterogeneous but became standardized through the audit profession's efforts and interactions with private and public actors. Third, the role of regulation in those early developments was seemingly limited to codifying existing practices, as the first federal audit regulation was introduced only late in the development of the profession and did not significantly impact capital markets. Our historical evidence helps us understand how we arrived at today's widely accepted and highly regulated financial audits. It uncovers parallels to and offers lessons for current developments in ESG assurance.

Despite calls for regulation in the crypto utility token market, it is unclear how crypto token investors value current regulatory proposals. We find that on average, investors react negatively to news that increases the likelihood of securities and transparency-related regulation. We also find that this negative reaction is attenuated for tokens rated higher on quality and transparency by intermediaries, those that have higher levels of disclosure, and listed on more liquid exchanges. The observed variation in token transparency and this muted reaction suggest investors perceive disclosure costs to be lower for tokens in more transparent environments, suggesting that transparency matters to investors.

We exploit cross-country variation in banks' confidential reporting requirements under COREP, the common European supervisory risk reporting framework, as an indicator for banking supervisors' preference for private information. Our results suggest that a stronger preference for confidential reporting is associated with significantly lower trading volume, return volatility, and absolute returns around banks' earnings announcements. These findings are independent of the level of countries' stock market development and supervisors' resources and legal power, and are consistent with the idea that investors perceive banks' public reporting to be less informative when supervisors have a strong private informational advantage. Our study adds to the literature on the influence of bank supervisors' institutional characteristics on market discipline, and highlights the role of private supervisory knowledge in shaping investors’ monitoring incentives.

We study the role of crowd-sourced investment research as a source of information for corporate strategic decisions, such as investments into innovation. Using a comprehensive sample of research reports published by individual contributors on Seeking Alpha and exogenous variation in shared coverage, we find that firms are more likely to invest into technologies similar to firms covered by the same contributor. We show that the effect is not due to contributors anticipating technological convergence, but instead is more pronounced for contributors providing more unique, specific, and technology-focused content. Our findings suggest that contributor-generated research on specialized online investment platforms not only provides incremental information for capital markets, but also enhances firms' information environment as an additional source of information that guides corporate strategic decisions.

We ask whether structured generative AI on social media can fill an intermediary role for retail investors. Using a within-day difference-in-differences design around the rollout of AI-generated earnings summaries on StockTwits, we compare user behavior before and after the summary becomes available following the earnings announcement. After AI summary publication, users spend less time browsing the firm's feed and engage less with peer-generated content, while subsequent messages become more aligned with the AI interpretation. Processing gains are greater for users interested in the information, users with more processing constraints, and firm news that better fits the summary's structure. At the platform level, user-generated content becomes more homogeneous but also more informative. Retail trading increases, and retail order flow better predicts future returns. Our results suggest platform-deployed AI can be a scalable information intermediary that affects how investors process corporate disclosures, produce opinions on social media, and incorporate information into trading decisions.

We examine whether improved access to firm disclosures weakens social media echo chambers, using the introduction of livestreamed earnings calls on StockTwits as a shock. We find that call streaming is associated with lower selective following, reduced exposure to confirmatory content, and belief revision over the following 30 days. Both call content and real-time chats contribute, with the strongest effects when calls surface disconfirming information and chats are active and diverse. The findings suggest that reducing frictions to accessing primary information and increasing exposure to diverse views can help mitigate the consequences of echo chambers in financial markets.

This paper examines why and when employee-generated disclosures about workplace experiences impact labor markets, using data on establishment-level Glassdoor ratings and outcomes within U.S. metropolitan areas. We develop evidence across three levels of analysis. At the aggregate level---where outcomes reflect joint decisions of workers and employers---broader employer coverage on Glassdoor is associated with improved matching. At the worker level, pairwise differences in ratings predict worker flows from lower- to higher-rated employers, consistent with a sorting mechanism. At the employer level, declines in ratings predict future establishment-level adjustments, including changes in workplace ratings and hiring-related communications, and reductions in violations, indicating active employer responses to employee-generated disclosures. Overall, we contribute evidence on how employee-generated disclosures relate to labor markets through worker and employer actions.

Many regulators rely on employee whistleblowers to detect misconduct. However, another outlet for employees to express concerns has gained prominence: anonymous Internet reviews. Using the setting of the Occupational Safety and Health Administration (OSHA), we show that OSHA conducts fewer (formal) whistleblower-driven inspections after employees' use of Glassdoor reviews to (informally) express safety-related concerns about their employers. This result is consistent with employees using Glassdoor as an alternative to whistleblowing. We conduct a battery of tests, including analyses of other forms of OSHA inspections, FOIA-obtained whistleblower complaints, and safety hiring, to rule out the possibility that our results reflect improvements in safety practices after Glassdoor reviews. Instead, our results suggest OSHA may miss valuable signals for enforcement. Our results are stronger when the costs of whistleblowing are higher. Our work contributes to our understanding of the interactions between formal and informal channels for employees to raise concerns about their employers.

We investigate the economic consequences of mandating salary range disclosures in job postings in Colorado, Washington, and California. We find a sizable increase in salary range disclosure, although 25 percent of job postings appear to omit pay information post-mandate. However, this non-disclosure does not appear to be strategically motivated, nor does the width of disclosed salary ranges vary with firms' incentives to provide uninformative ranges. In line with the informative nature of mandated pay disclosures, we find evidence of increased pay levels in general, and a reduction in gender pay gaps in particular, especially when pay transparency increases are more pronounced. Contrary to voiced concerns, we find no increase in biased pay perceptions. Finally, we document negative market reactions to the announcement of these mandates and an increase in firm-level expenses, suggesting that the mandates impose net costs onto regulated firms. Our findings offer nuanced insights into the multifaceted impacts of pay transparency laws, highlighting both their societal benefits and financial consequences for firms.

This paper provides evidence on mandatory sustainability reporting aimed at investors. We exploit the introduction of IFRS S1 and IFRS S2 in Türkiye. Türkiye incorporated the standards into domestic law without material modification and mandated their application for public issuers beginning in 2024. We document three findings. First, about 95% of the mandatory adopters filed a report in the first year. Second, we document a very high degree of formal compliance with the new standards with firms addressing most of the items covered in the standards. Third, our data also reveals substantial heterogeneity in key reporting choices, including materiality approaches, climate scenario, emissions measurement boundaries, and base year and target year in carbon emission reduction plans. These differences arise due to the flexibility offered by the standards. Our findings raise questions about the extent to which flexibility in the standards may at least initially limit cross-firm comparability.

This paper examines how targeted monetary incentives implemented by Seeking Alpha in January 2018 influence the information provision of social media contributors in capital markets. Unlike prior non-targeted systems, these incentives specifically address coverage gaps through minimum pageview guarantees for undercovered firms and reward article quality through algorithmic scoring. Following implementation, the platform experienced a shift toward fewer but higher-quality contributors who redistributed coverage to previously neglected firms. These undercovered firms saw substantially higher coverage likelihood and more articles when covered, alongside improved article quality. These improvements translated to meaningful reductions in capital market information asymmetry, without harming other firms' market quality, suggesting targeted incentives efficiently redistributed coverage between firms. Platform web traffic increased despite lower content volume, indicating users value quality and breadth over quantity, per se. Comparisons with three prior non-targeted incentive systems reveal that targeting was crucial for achieving these results. The findings shed light on how online platforms---intended or unintended---shape capital market information flows through platform design features.

We study how algorithmic content curation on financial social media shapes investor behavior and market outcomes. Using granular, user-level data on realized exposure to algorithmically curated content on StockTwits, we find that recommendation systems increase investor engagement and trading while crowding out attention to non-curated alternatives. Algorithmic curation appears to harm investor welfare, as it is associated with less informed retail trades and return reversals. These effects concentrate among users most susceptible to attention-driven trading and firms where this trading is most likely to move prices away from fundamental values. Findings are robust to alternative identification strategies, and extend to periods of major firm-specific news arrival. Our evidence demonstrates that algorithmically curated content appears to amplify uninformed, attention-driven trading in ways that erode the informativeness of retail order flow and impair market quality.

We examine how competition for attention among contributors on crowd-sourced investment platform Seeking Alpha affects the quality of earnings news coverage and the consequences for capital markets. We find that contributors facing higher competition for attention are less likely to provide coverage. Their remaining coverage is less informative. Readers engage less with the remaining coverage. Instead of writing more attention-grabbing content, contributors seem to lower their effort uniformly across their coverage portfolios, consistent with broad disengagement. At the aggregate level, competition for attention mutes market responses to earnings news, and reduces the benefits of coverage for stock liquidity and slows price discovery. Our results highlight that competition can erode rather than enhance information quality when rewards to information intermediaries are tied to attention rather than accuracy.