Form 10-K offers a setting for studying how users process complex, multi-layered disclosures: managerial narratives in the main file alongside separate exhibits, such as contracts and certifications, that provide unfiltered detail. Drawing on rational inattention theory, we investigate how users allocate limited attention across these components. Users typically begin with the main file and selectively access exhibits when the main file appears shorter, less readable, or less confident, indicating higher perceived information loss. This pattern strengthens for exhibits that offer more detail on topics discussed in the main file and among institutional investors and time-constrained users. Exhibit access persists beyond the initial filing window and increases around subsequent firm events, especially when external monitoring strengthens and event-related information asymmetry grows. Collectively, our findings underscore the active, discerning nature of user attention in navigating multi-layered disclosures and reveal the often-overlooked informational value of exhibits in Form 10-K.

We investigate the impact of the fiduciary duty of loyalty on corporate culture. Leveraging the staggered state adoption of corporate opportunity waiver (COW) laws as an exogenous fiduciary loyalty decline, we find that COW laws deteriorate corporate culture. This effect operates through increased board overlapping and director busyness and is more pronounced in firms with legal-expert directors, weaker governance, and greater outside opportunities as well as in smaller or younger firms. The results are robust across alternative measures, time frames, legislative events, estimation strategies, etc. Overall, the fiduciary duty of loyalty plays a crucial role in enhancing corporate culture and firm performance.

This paper develops and tests an equilibrium model of active fund management with ESG considerations. Heterogeneous sustainability preferences lead fund managers to intensify information acquisition on assets across the ESG spectrum, broadening the scope of active management. This information channel enhances price informativeness, lowers discount rates, and increases portfolio deviation from benchmarks. The model predicts a negative and concave ESG-expected return relation, stronger for green assets and weaker for brown assets. Using data on U.S. mutual funds and stocks from 2007–2021, we find supporting evidence based on price informativeness and the implied cost of equity capital.

We examine the relation between mandatory environmental disclosure and corporate green innovation. Adopting a difference-in-differences research design, we find that the adoption of state-level greenhouse gas emissions disclosure mandates is associated with an increase in the quantity of patents related to climate change mitigation/adaptation technologies (i.e., “green innovations”). This increase is stronger among firms with more environmental investors, suggesting investor preferences influence this relation. We also document a positive association between these mandates and firms’ future environmental performance ratings, suggesting a positive externality. However, we find that these mandates are associated with a reduction in future financial performance for some firms, suggesting a potential negative effect on shareholder welfare. Collectively, our results provide new evidence on the real effects of mandatory environmental disclosure and the determinants of green innovation and contribute to the literature on the motivations for green innovation and the literature on corporate disclosure and investment decisions.

We construct a measure ( fLMA ) of the extent to which neighboring firms hire similar types of workers, based on the similarity between the labor profile of a firm and that of its locality. We show that a firm’s innovation is positively related to fLMA. The enhanced labor mobility induced by higher fLMA is an important channel for this positive relation. This relation is stronger when firms have increased outside job opportunities for employees, increased knowledge spillovers via coworkership, and more employee stock options. Innovation is higher when intellectual property ownership is with employers, not employees. This effect increases in fLMA.

We conduct two experiments to examine whether and how the framing (bonus vs. penalty) of a target‐based incentive contract affects knowledge sharing and knowledge seeking. In the first experiment, we predict and find that penalty‐framed contracts increase employees' stress due to the fear of potential loss, which in turn reduces their willingness to share knowledge. Additionally, consistent with loss aversion, employees under penalty‐framed contracts are more likely to seek knowledge than those under bonus‐framed contracts. The second experiment corroborates our theoretical arguments by demonstrating the crucial role of stress in reducing knowledge‐sharing behavior. The results show that, when stress is alleviated through an informal control mechanism, penalty‐framed contracts no longer reduce knowledge sharing. The implications of our findings for research and practice are discussed.

Despite the potential of algorithms to improve judgment quality, recent research suggests that individuals may be averse to algorithmic use. We experimentally examine whether and how managers’ use of an algorithm-advised performance rating is influenced by rating valence and the decision rights managers have to adjust the algorithm. We find that managers are less willing to use an algorithm to evaluate subordinate performance when it advises a low, rather than high, rating. We further show that when the algorithm-advised rating is low, allowing managers to adjust how the algorithm computes the rating, compared with adjusting the rating itself or not allowing any adjustment, increases algorithmic use. Further analyses show this effect to be consistent with managers’ increased understanding of an algorithm when involved in its computation. Our findings inform organizations’ implementation of performance evaluation algorithms by showing how rating valence and decision rights jointly influence managers’ use of the algorithms.