Prior research has shown that trust has a positive effect on the economic welfare of nations. We investigate this result by analyzing the effect of endowed trust on agency problems within organizations. We find that firms located in U.S. counties where trust is more prevalent suffer less from...

We examine the impact of financial reporting on corporate innovation. We find that firms that exhibit more conservative financial reporting generate fewer patents. Their patents also result in fewer citations and lower economic benefits. These effects of conservative financial reporting on...

Prior research provides mixed results on the ability of American shareholder activists to improve managerial behavior. In Japan, the means of external control (e.g., takeover, litigation) are not as effective as they are in the U.S. Challenging management during annual meetings may be the only...

We examine the effects of keiretsu structure on capital market timing. Keiretsu groups offer a hybrid structure between fully integrated conglomerates and stand alone firms. We find that past market conditions affect the capital structure of keiretsu firms more than they affect the capital...

When setting budgets, managers may place constraints on how resources can be used in an effort to mitigate opportunistic behavior by subordinates. These restrictions can affect the ability of the subordinate to succeed in the budgeted task, but may also have an unintended spillover effect on the...