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Does Earnings Quality Affect Information Asymmetry? Evidence from Trading Costs


  •  Accepted by Shivaram Rajgopal. We thank two anonymous reviewers, Linda Bamber, Christine Botosan, Ted Christensen, Asher Curtis, Jay Coughenour, Thomas Lys, Shamin Mashruwala, Rick Mendenhall, Per Olsson, Shiva Rajgopal, Eddie Riedl, Katherine Schipper, Greg Sommers, Rex Thompson, Ram Venkataraman, and participants at Duke University, Melbourne Business School, Michigan State University, Texas Christian University, the 2008 American Accounting Association annual meetings, the 2008 Mid-Atlantic Research Conference in Finance, and the 2008 Accounting Research Conference at the Indian School of Business for many helpful suggestions. We thank Frank Ecker for making the data on the accruals factor available on his website. Animesh Dwivedi, Machiko Hollifield, Teza Mukkavilli and Bao Nguyen have provided valuable research assistance.