Faculty & Research

Joao Granja

Assistant Professor of Accounting

Phone :
1-773-834-3214
Address :
5807 South Woodlawn Avenue
Chicago, IL 60637

João Granja’s research interests include analyzing the relationship between disclosure and financial development with a focus on examining the way accounting information affects the stability and development of financial institutions. His papers have been accepted in the Journal of Accounting Research and in the Journal of Finance.

Granja earned an undergraduate degree in economics from the Universidade do Porto (Portugal). During his studies, he spent a semester abroad at Corvinus University in Budapest, Hungary. In 2008, he graduated with a MSc in economics from the Universidade Católica Portuguesa (Lisbon), and completed a PhD in accounting from the University of Chicago Booth School of Business in 2013. Prior to joining academia, he has consulted on several projects that involved the use of financial statements to evaluate the efficiency of regulated industries in Portugal.

Before joining Booth, Granja was an assistant professor at Massachusetts Institute of Technology, Sloan School of Business, where he taught Corporate Financial Accounting. Granja joined Booth in 2016 and he hopes that his students take away a solid understanding of the accounting principles that mediate the communication between firms and the users of financial reports.

Outside of academia, João enjoys to play hide-and-seek with his 1-year old son Pedro and to play soccer with friends.

 

2016 - 2017 Course Schedule

Number Name Quarter
30000 Financial Accounting 2017 (Winter)

REVISION: Competition and Voluntary Disclosure: Evidence from Deregulation in the Banking Industry
Date Posted: Nov  16, 2016
We use the relaxation of interstate branching restrictions under the Interstate Banking and Branching Efficiency Act (IBBEA) to examine how increases in competition affect incumbents' voluntary disclosure choices. States implemented the IBBEA over several years and to varying degrees, allowing us to identify the effect of increased competition on the voluntary disclosure decisions of both public and private banks. We find that increases in competition are associated with an increase in press releases. Overall, press releases become more negatively toned as entry barriers decrease, particularly in states that severely restricted entry prior to the IBBEA. However, disclosures become incrementally positively toned around stock issuances when entry barriers decrease. Thus, the increase in disclosure is consistent with heightened incentives to communicate positive information to investors and negative information to potential competitors.

REVISION: Disclosure Regulation in the Commercial Banking Industry: Lessons from the National Banking Era
Date Posted: Sep  30, 2016
I exploit variation in the adoption of disclosure and supervisory regulation across U.S. states to examine their impact on the development and stability of commercial banks. The empirical results suggest that the adoption of state-level requirements to report financial statements in local newspapers are associated with greater stability and development of commercial banks. I also examine which political constituencies influence the adoption of disclosure and supervisory regulation. I find that powerful landowners and small private banks are associated with late adoption of these regulations. These findings suggest that incumbent groups oppose disclosure rules because their passage threatens their private interests.

REVISION: Do Strict Regulators Increase the Transparency of the Banking System?
Date Posted: May  26, 2016
We investigate the role of regulatory incentives on the enforcement of financial reporting transparency in the U.S. banking industry. The previous literature suggests that banking regulators use discretion to facilitate regulatory forbearance. Yet, is not clear whether these actions result from lax oversight or whether they are necessary to prevent further financial instability. Using a novel measure of the quality of regulatory enforcement, we show that strict regulators are more likely to enforce income-reducing reporting choices by forcing banks to restate their overly aggressive call reports. Further, we find that the effect of regulatory strictness on accounting enforcement is strongest in periods leading up to economic downturns and for banks with riskier asset portfolios. Overall, the results from our analyses are consistent with the notion that regulatory incentives play an important role in enforcing financial reporting transparency, particularly in periods leading up to ...

REVISION: Selling Failed Banks
Date Posted: May  14, 2015
We show that the allocation of failed banks in the Great Recession was likely distorted because potential acquirers of these banks were poorly capitalized. We illustrate this phenomenon within a model of auctions with budget constraints. In our model poor capitalization of some potential acquirers drives a wedge between their willingness to pay and the ability to pay for a failed bank. Using our framework, we infer three characteristics that drive potential acquirers’ willingness to pay for a failed bank in the data: geographic proximity, bank specialization, and increased market concentration. Consistent with predictions of our model, we find that low capitalization of potential acquirers decreases their ability to acquire a failed bank. Finally, we show that the wedge between potential acquirers’ willingness and ability to pay distorts the allocation of failed banks. The costs of this misallocation are substantial, as measured by the additional resolution costs of the FDIC. These ...

New: The Relation between Bank Resolutions and Information Environment: Evidence from the Auctions for Failed Banks
Date Posted: Nov  27, 2013
This study examines the impact of disclosure requirements on the resolution costs of failed banks. Consistent with the hypothesis that disclosure requirements mitigate information asymmetries in the auctions for failed banks, I find that, when failed banks are subject to more comprehensive disclosure requirements, regulators incur lower costs of closing a bank and retain a lower portion of the failed bank's assets, while bidders that are geographically more distant are more likely to participate in the bidding for the failed bank. The paper provides new insights into the relation between disclosure and the reorganization of a banking system when the regulators' preferred plan of action is to promote the acquisition of undercapitalized banks by healthy ones. The results suggest that disclosure regulation policy influences the cost of resolution of a bank and, as a result, could be an important factor in the definition of the optimal resolution strategy during a banking crisis event.

REVISION: The Relation between Bank Resolutions and Information Environment: Evidence from the Auctions for Failed Banks
Date Posted: Oct  17, 2013
This study examines the impact of disclosure requirements on the resolution costs of failed banks. Consistent with the hypothesis that disclosure requirements mitigate information asymmetries in the auctions for failed banks, I find that when failed banks are subject to more comprehensive disclosure requirements, regulators incur lower costs of closing a bank and retain a lower portion of the failed bank’s assets, while bidders that are geographically more distant are more likely to participate in the bidding for the failed bank. The paper provides new insights on the relation between disclosure and the reorganization of a banking system when the regulators’ preferred plan of action is to promote the acquisition of undercapitalized banks by healthy ones. The results suggest that disclosure regulation policy influences the cost of resolution of a bank and, as a result, could be an important factor in the definition of the optimal resolution strategy during a banking crisis event.