Knowledge that Transforms

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.

This study analyzes the wide dispersion in bid-ask spreads across clients in over-the-counter (OTC) markets. Our data detailed data comprise a dealing bank's complete trading record in a major OTC contract and include client IDs, seven client types, and precise markups. Average spreads are lowest for hedge funds (<1 basis point, bp) and highest for individuals and for small and medium enterprises (>50 bps). Regression results suggest that the primary source of variation is clients’ execution efficiency, meaning their ability to minimize execution costs. Efficient trading, which can require investments in knowledge and technology, has three dimensions: reliance on low-cost platforms; familiarity with market technologies, conventions, and negotiating strategies; and breadth of dealing relationships. Relations between proxies for client execution efficiency and client incentives to invest, such as trade frequency, are consistent with rational inattention.

Digitalization is transforming the audit profession. Apprenticeship norms prescribe that knowledge flows down from supervisors to subordinates, but digitalization increasingly positions junior auditors as experts in emerging technology. Consequently, supervisors can learn from subordinates. This reversal challenges long-standing apprenticeship expectations, yet little is known about how it unfolds or the tensions it creates. Against this backdrop, we examine tensions that can arise when subordinate auditors share their knowledge with supervisors. Drawing on 51 semistructured interviews and guided by theory, we identify four recurring roadblocks to upward knowledge sharing: junior auditors' status motives, “same as last year” routines, status insecurity among immediate supervisors, and defensiveness when juniors cross perceived knowledge “lanes.” We also find a rare, countervailing pathway: the emergence of informal champions who legitimize junior auditors' contributions. Our study deepens understanding of how digitalization transforms team learning in audits and shows how historical structures and norms evolve under new conditions. Data Availability: Data were obtained from interviews.

We examine how corporate financial constraints shape firms’ employment responses to minimum wage policies. Exploiting the federal minimum wage increase during the financial crisis and variation in firms’ debt maturity structures at the crisis onset, we find that financially constrained firms significantly reduce employment. To assess external validity, we analyze staggered state-level minimum wage increases over time. Consistent with the crisis evidence, employment declines in establishments of constrained firms, whereas unconstrained firms expand in areas with a larger supply of minimum-wage workers and higher turnover. Our results highlight the central role of financial constraints in mediating labor policy effects.

We study how firms set wages for their employees when they can legally age-discriminate across workers. We exploit an age-specific minimum wage change in the UK, which raised the minimum applying to workers aged 25 and over, leaving unchanged the minima for younger workers. Using matched employer-employee data on a low-paying sector, we show large, positive wage spillovers on workers aged under 25, which arise within firms from company wage policy. Pay equity norms offer the most parsimonious explanation for the emergence of spillovers. The effects that we document also operate in other low-paying sectors of the UK labor market.