It is often noted that accounting information, while faithfully estimating current profitability, fails to reflect forward-looking information about new ventures. Stock prices, however, reflect the prevailing sentiment about both current and future activities. As a result, though accounting is...

When a firm's input supplier can acquire private information to gain an edge in negotiations, we show that the firm can blunt the supplier's informational advantage by permitting cost inefficiencies in internal production. Specifically, we establish that a modest increase in the cost of the...

Recognizing the role and value of diverse stakeholders, firms pursing a "beyond profit" agenda are becoming increasingly common. This paper studies such hybrid entities - firms that value the profits they create as well as the surpluses generated for consumers - and details their implications...

Corporate insiders face substantial restrictions on stock sales, but many have viewed receiving tax deductions from charitable donations of stock holdings as an attractive alternative. In fact, empirical evidence consistently indicates that executives even make use of their private information...

Many of America’s top corporate donors share a common feature: the bulk of their giving is in the form of in-kind products, not cash. This phenomenon is not a coincidence but rather a result of the tax code creating such a preference due to an “enhanced” deduction for inventory donations....

A manager’s short-term focus (myopia) is typically viewed as detrimental to the firm’s interests. In contrast, studying a voluntary disclosure model wherein both capital market and product market strategic considerations are in play, this paper shows that the manager’s myopic behavior can...

common explanation for why firms incur sunk costs is that technology considerations make them inescapable. This paper shows that sometimes firms may prefer to make early (less informed) investment decisions even when technology allows such decisions to be delayed. Sunk costs commit and clarify a...

Job rotation refers to the practice of routinely transferring employees between jobs. The explanations provided for job rotation are as varied as its uses.Some posit that complementarities and learning across tasks allow increased productive efficiency, while others speculate that employees'...