The diffusion and use of new ideas is critical for producing innovations and realizing their potential. We explore how characteristics of innovators and potential adopters affect the adoption of important, new scientific ideas in networks. Using rich data on biomedical researchers and their networks, natural language processing, and a novel two-way fixed effects strategy, we find that new ideas introduced by female scientists are underutilized for two reasons. First, female innovators are less connected than men. Second, at short network distances, researchers (especially men) adopt women’s ideas less. Similar gaps hold for underrepresented racial and ethnic minorities.

ABSTRACT We investigate how the mandatory adoption of International Financial Reporting Standards (IFRS) by publicly listed firms in the European Union affects peer private firms. We find that private firms’ capital investment decreases significantly after the IFRS mandate, relative to public firms. Private firms also display decreased investment when benchmarked against firms relatively insulated from the impact of the IFRS mandate, but the magnitude of the effect is smaller in this case. These results are consistent with the hypothesis that mandatory IFRS reporting (combined with other reforms), while increasing public firms’ financing and investment, crowds out funding for private firms. The effect is more pronounced for larger private firms and in industries where public peers have greater external financing needs. Our evidence suggests that financial reporting regulations cause shifts in resource allocation in an economy.