Knowledge that Transforms

Firms’ green technology investments are increasingly important for competitive positioning, yet their impact on long-run performance remains unclear. Using electricity capacity data for global utility firms, we construct a unique structural measure of technological greenness based on renewable versus fossil fuel physical infrastructure. We find that adopting sustainable technologies is followed by a long-run improvement in corporate fundamentals that is only partially reflected in stock prices, yielding superior returns over a multi-year horizon. These results partly reflect higher revenue growth in liberalized retail markets rather than investor sentiment, revealing a consumer-based mechanism that likely extends to competitive downstream sectors.

We survey 153 empirical studies of family firms and document 192 operational definitions representing 25 distinct definition types. These definitions can be decomposed into five recurring, codable dimensions: ownership, management, board representation, embeddedness, and succession. We relate these dimensions to economic mechanisms including agency conflicts, residual control rights, transaction costs, and dynastic control. Alternative definitions select systematically different populations and yield materially different estimates of firm performance and innovation. Definition choice is largely unrelated to the research question, except in succession studies. Ownership thresholds track private enforcement of self-dealing rules, but not statutory shareholder rights or rule of law. We conclude that the family firm is a family of related constructs rather than a single latent construct. Definitions should therefore match the family-firm construct implied by the research question, and results should be reported across alternative classification rules.

We find that the effect of political connections on tax planning depends on firms’ financial conditions. After increased political connections, financially unconstrained firms increase tax planning and spending on tax services, as documented in prior studies, whereas constrained firms decrease tax planning and spending on tax services. Moreover, decreases in tax planning are only present for constrained firms that obtain new bank loans and public debt and when the connected politicians serve on banking-related committees. Our results suggest that by facilitating access to external financing, political connections reduce financially constrained firms’ use of tax planning as an internal financing tool.