We examine the real effect of partial privatization on corporate innovation. To establish causality, we explore plausibly exogenous variation in the expectation of further partial privatization generated by China's split share structure reform, which mandatorily converts non-tradable shares into freely tradable shares and opens up the gate to the further privatization of state-owned enterprises. We find that partial privatization prospects have a positive effect on corporate innovation. A better alignment of the interests of government agents with those of private shareholders and improved stock price informativeness appear to be two plausible underlying mechanisms. Our paper sheds new light on the real effects of partial privatization.

We use a large pictorial sample of Chinese financial analysts to test the association between facial width‐to‐height ratio ( fWHR ) and performance in men. Financial analysts offer an ideal setting for our investigation because we can objectively track individual analysts’ behaviors and performance. We find that high‐ fWHR analysts are more likely to conduct corporate site visits and they exhibit better performance. The positive fWHR –performance association survives a battery of robustness checks and the association is more pronounced for analysts with lower status, for firms with higher uncertainty, and for analysts facing more intense competition. Our results suggest that the dominant trait predicted by fWHR is achievement drive.