In exchange economies where moral hazard affects the distribution of individual risks, we study the viability of linear nonexclusive contracts. It is shown that the linearity in prices and payoffs is compatible with the presence of moral hazard when coupled with a simple participation fee. More...

The authors study whether R&D-intensive firms are more resilient to trade shocks. They correct for the endogeneity of R&D using tax-induced changes to the cost of R&D. On average across US manufacturing firms, rising imports from China lead to slower sales growth and lower profitability. These...

The authors use large reductions of import tariffs to examine how incumbent firms modify investment when the threat of entry by foreign rivals intensifies. Incumbents reduce investment by 7.2% of capital in response to higher entry threat. This effect is robust, pervasive, and likely causal....

Political activism positively affects firm innovation. Firms that support more politicians, politicians on Congressional committees with jurisdictional authority over the firms’ industries and politicians who join those committees innovate more. The authors employ instrumental variables...

We examine how mark-to-market accounting affects investment decisions in an agency model with reputation concerns. Reporting the current market value of a firm's assets in the financial statements can serve as a disciplining device because the information contained in the market price provides a...

Consistent with salience theories of choice, we find that managers overreact to salient risks. We study how managers respond to the occurrence of a hurricane event when their firms are located in the neighborhood of the disaster area. We find that the sudden shock to the perceived liquidity risk...

We investigate the role of analyst following as a monitoring device reducing earnings management. We find strong evidence that analysts are more effective monitors in transparent environments than in opaque environments. In a sample of 51,401 observations for 10,866 non-financial firms in 26...

In this paper, the authors develop a three-dimensional conceptual framework for value generation in buyouts that categorizes and links the different levers of buyouts value generation. This framework provides the basis to take a look beyond individual value levers and shed light on the...

This paper focuses on the link between the three types of specificity and the complexity of outsourcing contracts because specificity is generally considered as the most important transaction cost attribute. It also integrates external uncertainty in the model. External uncertainty is a...

In an increasingly uncertain context, budgeting faces at least two categories of concerns : how should realistic objectives be set in a poorly predictable context? How should a fair year-end evaluation be performed when uncertainty has affected the results and their controllability? <p> Since...</p>