Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)

Graduate Group


First Advisor

Luzi Hail

Second Advisor

Daniel Taylor


I examine how investors’ search for different types of information affects managers’ reporting decisions. I distinguish investors’ search for information about firm fundamentals (“fundamental search”) from their search for information about managers’ incentives (“incentive search”). Based on a parsimonious model of misreporting, I predict that fundamental search reduces the earnings response coefficient, which reduces a manager’s benefits from misreporting, resulting in less misreporting. In contrast, incentive search increases the earnings response coefficient, which increases the benefits from misreporting, resulting in more misreporting. I test these predictions using an empirical technique that classifies EDGAR downloads as fundamental search or incentive search. Consistent with my theoretical predictions, I find that both fundamental and incentive search are positively associated with measures of price efficiency, but that fundamental (incentive) search is negatively (positively) related to the earnings response coefficients and intentional restatements. I also confirm my findings in the XBRL adoption setting where the costs of fundamental search exogenously decreased, and show that the XBRL adoption increased investors’ search for fundamental information relative to incentive information, decreased the earnings response coefficient, and decreased misreporting. Collectively, the results show that investors’ information demand can shape managers’ reporting decisions, and that its effects can vary depending on the type of information investors search for.


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Accounting Commons