1360 Steinberg Hall - Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104
Stella’s primary interest broadly relates to disclosure and her research seeks to understand the incentives that shape managerial and corporate disclosure policies and decisions, and how this information is acquired, processed, and ultimately used by various stakeholders. Much of her research features state-of-the-art machine learning tools and her work uses current settings to investigate fundamental questions that relate to how corporate disclosures matter in today’s consumer- and technology-oriented economy.
Stella’s recent working papers pursue several specific themes, including identifying alternative forms of disclosure, and understanding how legal protections and contracting considerations influence disclosures surrounding innovation and intellectual property.
Stella received a dual B.A. degree in Economics and Computer Science from Swarthmore College. Prior to joining the PhD program in accounting at Wharton, she was a research analyst at the Samuel Zell Robert Lurie Real Estate Center at Wharton for two years.
In her leisure time, Stella enjoys watching and playing tennis.
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.
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.
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.
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.
Strategic Cost Analysis is the process of analyzing and managing costs in orderto 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.