Knowledge that Transforms

We examine whether disproportionate insider control, or the divergence between insider voting and cash flow rights at dual-class firms, influences the extent to which stock price reflects information about future firm performance. We find that current returns incorporate less information about future earnings and cash flows as disproportionate insider control increases. However, monitoring by influential institutional investors, strong board oversight, and high-quality disclosure significantly attenuate this effect, such that disproportionate insider control does not result in less informative stock prices. Collectively, our findings reveal that, although the dual-class structure is associated with less informative stock prices, on average, monitoring and disclosure can alleviate investor concerns about disproportionate insider control while allowing firms to take advantage of the benefits of a dual-class ownership structure.

We study how patent thickets, which are clusters of interdependent patents that raise the cost of using or combining technologies, shape acquisition decisions. Firms are less likely to be acquired when their patents are embedded in external thickets, which exacerbate coordination and bargaining frictions. Conversely, firms are more likely to be acquired when their patents form internal thickets, which mitigate these costs by consolidating control over related technologies. When acquirers and targets share an external thicket, acquisition probability rises when acquirers depend on targets but falls when targets depend on acquirers, underscoring the asymmetric role of technological dependence in acquisitions.

Returns on conventional momentum portfolios exhibit time-varying skewness that deepens during momentum crashes. We exploit this feature and propose a crash indicator—based on the interaction between conditional volatility and skewness—that provides a measure of downside risk directly from the return distribution. This indicator significantly predicts left-tail realizations of momentum returns at daily frequency, capturing information about crash risk beyond volatility alone. Building on this predictability, a skewness-based dynamic allocation improves daily downside risk management and earns significant alphas over existing momentum-timing approaches. We also show that momentum skewness cannot be fully reconciled with asymmetric market exposure.

Academic freedom is often equated with protection from political and economic interference. Authoritative definitions are broader. They combine protection from external interference, peer-based evaluation, and institutional arrangements for scholarly self-governance. Drawing on Honneth’s (2014) theory of democratic institutions, this paper develops the second and third elements and integrates all three within a recognition-theoretical framework that reconceptualizes academic freedom as social freedom. Using accounting as a case, we reconstruct two transformations that shape the discipline today: the theory revolution of the 1960s, which consolidated peer-based epistemic recognition, and the journal ranking revolution of the 1990s, which reorganized recognition around performance metrics and publication hierarchies. We show that academic freedom can be hollowed out from within without being formally revoked and argue that a discipline weakened from within is less able to resist external threats. Defending academic freedom requires attention to architectures of recognition through which scholarly worth and truth are organized.

This paper provides evidence that the mean and dispersion of manufacturers’ inventory growth, as reflected in accounting disclosures, convey valuable information about subsequent changes in economic output growth. At the same time, I find that although government statistical agencies and professional forecasters incorporate mean inventory growth in their estimates or forecasts, they fail to account for its dispersion. I develop and calibrate a heterogeneous-firm model to show that the leading information embedded in macro-level inventory moments arises from firms’ asymmetric responses to news shocks at the micro level. The model also suggests that the failure to incorporate dispersion is likely due to the noise in the dispersion signal used by statistical agencies and forecasters. Data Availability: Data are available from the public sources cited in the text.