Simi Kedia and Thomas Philippon: The Economics of Fraudulent Accounting: “We argue that earnings management and fraudulent accounting… …have important economic consequences. In a model where the costs of earnings management are endogenous, we show that in equilibrium, low productivity firms hire and invest too much in order to pool with high productivity firms. This … Continue reading Lunchtime Must-Read: Simi Kedia and Thomas Philippon: The Economics of Fraudulent Accounting