We model financial innovations such as Exchange-Traded Funds, smart beta products, and many index-based vehicles as composite securities (CSs) that facilitate trading the common factors in assets' liquidation values. Through accessing a larger basket of assets in endogenously chosen proportions,...

With the Paris Agreement of 2016, 189 nations signed a legally binding document to keep global warming below 2 C, and to pursue efforts to limit the temperature increase to 1.5 C. It was recognized that this would reduce climate change impacts substantially. All signatories submitted "Intended...

Firms can change their outstanding shares to manage their stock price levels. Those with lower stock prices tend to attract more speculative trading, which causes higher price volatility and may force their managers to excessively focus on short-term earnings at the expense of R&D and other...

The tightening of climate policies may cause technologies based on fossil fuels to lose value compared to "green" technologies. For firms with significant fossil-based knowledge, this implies that their firm (market) value is at risk. This technological risk is also relevant for financial market...

The digital world is increasing humanity’s ability to acquire, produce, distribute, and consume information at unprecedented levels, raising questions about the origin, reliability, and use. This introduction is related to the special issue on Technological Innovations to Ensure Confidence in...

We examine activist short sellers’ real impacts on their target firms using a novel dataset of new product introductions (NPIs). We document that target firms experience declines in NPIs relative to their matched control firms after being targeted. Target firms also experience reductions in...

This paper challenges the stereotypical view that transient institutional investors, characterized by short-term horizons, exacerbate managerial myopia and harm corporate innovation. Our evidence implies that the results of previous studies may have been biased due to endogeneity issues. To...

We propose a dynamic asset-market equilibrium model in which (1) an "innovative" asset with as-yet-unknown average payoff is traded, and (2) investors delegate investment to experts. Experts secretly renege on investors' orders and take on leveraged positions in the asset to manipulate...

This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in R&D expenditures, target firms increase innovation output, as measured by...

This paper analyzes whether institutional ownership affects the nature of corporate innovation. We consider the heterogeneity of firm innovation by differentiating upstream research from downstream development using novel indicators for scientific publications and patents. Our analysis shows...