Research.

When home-country conditions deteriorate, who leaves, and where does their talent go? We develop a theoretical framework linking adverse conditions to migration, recruitment, and innovation. Linking USPTO records of granted patents and published applications, we follow 1.23 million inventors around 47 adverse country events since 1985. Shocks raise the annual probability of moving to the United States by 0.8 percentage points, about 70 percent of the baseline rate. The increase is similar for star and non-star inventors and larger after political and economic deterioration than security and conflict events. U.S. firms with prior business ties to affected countries hire more inventors from those origins, including stars, and subsequently produce more high-impact patents, with no significant increase in total patent counts. Recruited inventors participate directly in these inventions, while aggregate patenting declines in the origin countries. Chinese-origin departures also rise at firms with federal research ties following the DOJ’s China Initiative. These findings highlight the importance of policy predictability and political stability for retaining both star inventors and the broader inventive workforce.

This paper examines how high-frequency trading affects corporate investment and financing. We develop a model in which HFT can increase return and liquidity comovement even though its average-liquidity effect is ambiguous. When common-risk costs dominate liquidity benefits, HFT raises the cost of equity and leads equity-dependent firms to reduce issuance and investment. Using broker-level HFT identifiers, we exploit the 2012 ASX infrastructure upgrade as exchange-side variation in HFT presence, and we find that higher HFT activity leads to sizable declines in investment and equity issuance, concentrated among firms that rely more heavily on external equity financing. The staggered global rollout of exchange co-location services provides corroborating evidence. Overall, the findings show that financial market innovations can alter firms’ financing capacity and investment decisions, providing a channel through which financial market structure may influence aggregate economic growth.

Do stock price crashes discipline firms? Using isolated crash events and an inverse probability weighted difference-in-differences design, we document a decline in corporate violations following quasi-exogenous negative shocks to firms’ market valuations. The decline is more pronounced when institutional investors have a stronger and more sustained presence and when firms have greater managerial and organizational capacity. These patterns are consistent with a disciplining response in which external monitoring creates pressure for corrective action and internal capacity helps firms implement it. Our findings suggest a bright side of market losses: the response to a stock price crash can strengthen corporate discipline and improve subsequent corporate conduct.

Why do companies release visually enhanced annual reports that seem redundant with their 10-K filings? We develop a novel model and provide evidence, by employing multiple AI deep learning models for empirical analysis, that firms earn 3–5% abnormal returns after adding visuals to their annual reports, preceded by a surge in institutional investor attention. Firms using data-oriented graphics show no abnormal returns, whereas those with illustrative visuals highlighting innovation and technology exhibit stronger effects. Moreover, firms adopting R&D-focused visuals experience notable increases in patents granted and radical innovation, suggesting visuals mitigate investor inattention and convey nuanced fundamental information.

This study investigates the representation gap in directorship positions for individuals of Asian descent, quantifying a 6% lower likelihood of holding such roles compared to their equally qualified counterparts. Employing Donald Trump’s presidency as a shock that generates plausible exogenous variations in labor market barriers faced by Asian professionals and a matching approach, we show that our findings are robust to endogeneity concerns. In addition, we discover that this underrepresentation is lower for companies operating in more inclusive settings, such as those in the R&D intensive sectors and in ethnically diverse states. Additionally, pre-existing relationships and familiarity further narrow this disparity.