Short selling constraints predict negative stock returns at the monthly frequency, but is it a monthly phenomenon? We show that short selling constraints are persistent, lasting nine months on average, and therefore measured subsequent negative returns cannot be due primarily to an easing of...

We investigate how CEO's risk incentive (vega) affects firm innovation. To establish causality, we exploit compensation changes instigated by the FAS 123R accounting regulation in 2005 that mandated stock option expensing at fair values. Our identification tests indicate a positive and causal...