We present new evidence on the evolution of labor mobility in the United States over the past four decades. Building on the seminal methodology by Blanchard and Katz (1992), combined with multiple sources of regional population and migration data, we show that interstate mobility in response to relative labor demand conditions is not as high as previously established and has been weakening since the early 1990s. In addition, we find that mobility is countercyclical: net migration across regions responds more strongly to spatial disparities in recessions than in normal times. While the declining trend in mobility has been driven by weaker out-migration from states experiencing negative relative shocks, the mobility surge in recessions is mostly accounted for by temporarily stronger in-migration to better-performing states.

We study how trade liberalization affects financial and innovation decisions of large firms across major G7 countries. We document how firms increase their cash holdings when their country’s trading partners lower their import tariffs, while we find no effect of a decrease in the country’s own import tariffs. Specifically, we find that the increase in cash holdings occurs before tariff cuts by trading partners and is associated with higher R&D spending and patent filing after the cuts. Our results are consistent with the predictions of a model in which higher expected returns to innovation from enhanced export market access lead to higher cash buffers.

The Advisory Committee on the Auditing Profession (ACAP), formed by the U.S. Department of the Treasury, has recommended that all public companies be required to have shareholder ratification of auditor selection. Using data from 1,382 firms for the year ending December 31, 2006, we find that audit fees are higher in firms with shareholder voting on auditor ratification. We also find that firms that started having a shareholder vote pay higher fees than firms that stopped having a shareholder vote. In the second part of our study, we find that in firms with shareholder voting on auditor selection (1) subsequent restatements are less likely and (2) abnormal accruals are lower. Our findings are consistent with the experimental results in Mayhew and Pike (2004), and provide empirical grounding for the debate about mandating shareholder voting on auditor selection.