This study examines the effect of technology spillovers on firms׳ cash holdings. It finds that firms facing greater technology spillovers hold higher cash balances. This effect is more pronounced among financially constrained firms and for firms that are likely to benefit more from diffused technology, e.g., those that have newer patents, are more profitable, and face better growth opportunities. The spillover impact remains strong when product market competition and own-firm innovations are accounted for. Overall, our study identifies technology spillovers as an important factor in determining corporate cash policy.

We estimate the dynamics of recommendations by financial analysts, uncovering the determinants of inertia in their recommendations. We provide overwhelming evidence that analysts revise recommendations reluctantly, introducing frictions to avoid frequent revisions. More generally, we characterize the sources underlying the infrequent revisions that analysts make. Publicly available data matter far less for explaining recommendation dynamics than do the recommendation frictions and the long‐lived information that analysts acquire but the econometrician does not observe. Estimates suggest that analysts structure recommendations strategically to generate a profitable order flow from retail traders. We provide extensive evidence that our model describes how investors believe analysts make recommendations, and that investors value private information revealed by analysts' recommendations.

This study examines whether mutual fund managers generate alpha through thematic investment strategies that select stocks poised to benefit from specific themes. Using textual analysis of 10-K filings, we identify stocks’ thematic exposures and construct each fund’s thematic concentration index (TCI) from its holdings. High-TCI funds significantly outperform, with a top-minus-bottom decile spread of 4.26% in annualized four-factor alpha. Managers’ thematic expertise is related to their undergraduate field of study. Outperformance arises from superior stock selection rather than theme-related timing, with an informational advantage on firm earnings, particularly in stocks exposed to themes related to managers’ undergraduate training.

We find that mutual funds holding a larger concentration of high gross profitability stocks generate better future performance. The outperformance of these funds is not driven by a profitability-related risk premium and is not a byproduct of fund managers’ exploitation of other well-known investment strategies. We show that fund managers who trade on the gross profitability anomaly possess greater skill and create value by attracting future fund inflows and by growing fund assets under management. We contribute to both the mutual fund and market anomaly literatures by providing strong evidence that a sizable subset of mutual fund managers profit from an important market anomaly.

This paper presents evidence that labor-saving technologies positively impact a firm's financial leverage. The results are robust with two different measures of labor-saving innovations: automation and process innovations. The effects are more pronounced in firms facing greater labor input rigidity, such as firms with higher labor intensity, share of minimum wage workers, and union coverage. Our analysis suggests that labor-saving innovations reduce wage rigidity, allowing firms to increase financial leverage.

Rising intangible assets on corporate balance sheets around the world could limit borrowing capacity and consequently hinder growth if firms must preserve cash and forgo investment opportunities. We show that financial development lowers the sensitivity of cash holdings to tangible assets and promotes firm growth. We also find that sectors with a smaller proportion of tangible assets grow faster in countries with more developed financial markets. Our analysis reveals an important asset tangibility channel through which financial development facilitates firm growth.

We study the impact of an online market’s policy (environmental policy) offering entrepreneurs the option to disclose their environmental engagement on entrepreneurship outcomes, using Kickstarter as a laboratory. Following the policy’s implementation, 32.4% of entrepreneurs opted to disclose their environmental commitments. Using the passage of the environmental policy as an instrument, we show that environmental commitment improves funding outcomes, with the funding success rate increasing by 13.2% and the pledged funding ratio by 8.7%. Environmental commitment also attracts more environmentally conscious backers and brings in new backers, which likely contributes to these improved outcomes. However, environmental commitment does not have a material impact on the ultimate project success rate and significantly delays project delivery. Overall, the evidence suggests that Kickstarter’s nudge policy encourages entrepreneurs’ environmental engagement and helps them expand access to environmentally conscious backers by internalizing backers’ environmental preferences.

Human capital is a major impetus for technological innovation. We examine the relation between the technological dimension of product market competition and the disclosure of skill requirements in job postings. On the one hand, technological competition may raise the urgency of recruiting tech talent and make firms provide more specific skill requirements. On the other hand, technological competition can increase the proprietary costs of skill requirement disclosure. Using technological peer pressure as a measure of technological competition, we find that firms facing intense technological competition provide more specific skill requirements for tech positions, suggesting that the disclosure benefits outweigh the proprietary costs when firms face pressure to innovate. The effect of technological peer pressure is more pronounced among firms that make only incremental innovations and less pronounced among firms that rely on trade secrets or have greater industry peer presence in close geographical proximity. Our study documents a distinct relationship between technological competition and voluntary disclosure targeted to labor market participants.

This paper investigates the impact of a firm’s annual report readability and ambiguous tone on its borrowing costs. We find that firms with larger 10-K file sizes and a higher proportion of uncertain and weak modal words in 10-Ks have stricter loan contract terms and greater future stock price crash risk. Our results suggest that the readability and tone ambiguity of a firm’s financial disclosures are related to managerial information hoarding. Shareholders of firms with less readable and more ambiguous annual reports not only suffer from less transparent information disclosure but also bear the increased cost of external financing.