Knowledge that Transforms

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.

Performance chasing is pervasive in active mutual funds, index mutual funds, and ETFs, with positive flow-performance sensitivity evident in both broad-based and niche funds and for the skill and nonskill components of returns. The sensitivity of ETFs is greatest, with insignificant differences between active and index mutual funds. The heightened sensitivity of ETFs is not explained by benchmark design or exchange trading, and is amplified by institutional ownership. Institutional trading of ETFs follows a momentum strategy, rather than flow management or benchmarking. Institutional herding and the outsourcing of investment management to model portfolios heightens the performance sensitivity of ETF flows.

This paper proposes a new channel through which long-term interest rates transmit to credit spreads. When life insurers carry negative duration gaps, higher rates reduce their liabilities more than assets. Rate increases therefore boost equity and risk-bearing capacity, lowering equilibrium credit spreads. Empirically, I test this channel with bond-level yields and a maturity-based discontinuity in bond ownership. Insurers’ trades confirm the mechanism: after rates rise, insurers shift portfolios towards riskier, high-yield bonds. As rates increase, bonds more heavily held by life insurers experience greater spread reductions. The results show that institutional duration mismatch shapes credit spreads and corporate financing conditions.