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We propose that innovative originality is a valuable organizational resource and that owing to limited investor attention and skepticism of complexity, greater innovative originality may be undervalued. We find that firms’innovative originality strongly predicts higher, more persistent, and less volatile profitability and higher abnormal stock returns, findings that are robust to extensive controls. The return predictive power of innovative originality is stronger for firms with higher valuation uncertainty, lower investor attention, and greater sensitivity of future profitability to innovative originality. This evidence suggests that innovative originality acts as a “competitive moat” and is undervalued by the market.

We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. Bank deregulation tightened the distribution of income by increasing the relative wage rates and working hours of unskilled workers.

This paper is the first to study vacancies, hires, and vacancy yields at the establishment level in the Job Openings and Labor Turnover Survey, a large sample of US employers. To interpret the data, we develop a simple model that identifies the flow of new vacancies and the job-filling rate for vacant positions. The fill rate moves counter to aggregate employment but rises steeply with employer growth rates in the cross section. It falls with employer size, rises with worker turnover rates, and varies by a factor of four across major industry groups. We also develop evidence that the employer-level hiring technology exhibits mild increasing returns in vacancies, and that employers rely heavily on other instruments, in addition to vacancies, as they vary hires. Building from our evidence and a generalized matching function, we construct a new index of recruiting intensity (per vacancy). Recruiting intensity partly explains the recent breakdown in the standard matching function, delivers a better-fitting empirical Beveridge curve, and accounts for a large share of fluctuations in aggregate hires. Our evidence and analysis provide useful inputs for assessing, developing, and calibrating theoretical models of search, matching, and hiring in the labor market.

In deciding how much information about their firms' customers to disclose, managers face a trade off between the benefits of reducing information asymmetry with capital market participants and the costs of aiding competitors by revealing proprietary information. This paper investigates the determinants of managers' choices to disclose information about their firms' customers using a comprehensive data set of customer-information disclosures over the period 1976-2006. We find robust evidence in support of the hypothesis that proprietary costs are an important factor in firms' disclosure choices regarding information about large customers.

We assess whether restrictions on insider trading accelerate or slow technological innovation. Using over 80,000 industry-country- year observations across 74 economies from 1976 to 2006, we find that enforcing insider-trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and originality. Furthermore, the evidence is consistent with the view that restricting insider trading accelerates innovation by improving the valuation of, and increasing the flow of equity financing to, innovative activities.

This article uses CPS gross flow data to analyze the business cycle dynamics of separation and job finding rates and quantify their contributions to overall unemployment variability. Cyclical changes in the separation rate are negatively correlated with changes in productivity and move contemporaneously with them, whereas the job finding rate is positively correlated with and tends to lag productivity. Contemporaneous fluctuations in the separation rate explain between 40 and 50% of fluctuations in unemployment, depending on how the data are detrended. This figure becomes larger when dynamic interactions between the separation and job finding rates are considered.

We explore how the availability of affordable live-in help provided by foreign domestic workers (FDWs) in Hong Kong affected native women’s labor supply and welfare. First, we exploit differences in the FDW program between Hong Kong and Taiwan. Second, we use cross-sectional variation in the cost of a FDW to estimate a model of labor force participation and FDW hire. FDWs increased the participation of mothers with a young child (relative to older children) by 10–14 percentage points and have generated a monthly consumer surplus of US$130–US$200. By reducing child care costs through immigration, this is a market-based alternative to child care subsidies.

The increase in childhood obesity has garnered the attention of many in policy making circles. Consequently, school nutrition programs such as the School Breakfast Program (SBP) have come under scrutiny. The identification of the causal effects of such programs, however, is difficult owing to non-random selection into the program and the lack of exclusion restrictions. Here, we propose two new estimators aimed at addressing this situation. We compare our new estimators to existing approaches using simulated data. We show that while correlations might suggest that SBP causes childhood obesity, SBP is likely to reduce childhood obesity once selection is addressed.

This study addresses whether firms' share prices correctly reflect two accounting measures: dirty surplus and really dirty surplus. Dirty surplus is readily observable from the financial statements, but really dirty surplus, which arises from recognizing equity transactions such as employee stock option exercises at other than fair market value, is not. Findings show that dirty surplus and really dirty surplus are irrelevant for forecasting abnormal comprehensive income. However, findings also indicate that investors appear to undervalue really dirty surplus. Hedge returns are insignificant when portfolios are formed based on dirty surplus, but are significantly positive based on really dirty surplus. Really dirty surplus positive hedge returns are robust to a variety of sensitivity tests. Taken together, the findings are consistent with either investors over-valuing firms that have large negative really dirty surplus or really dirty surplus being correlated with an unmodeled risk factor.