Sky Blog
Economic downturns disrupt firms’ operations and strategic decisions and impair their financial health. During the recent pandemic, for example, many companies were forced to reduce expenses or lay off employees, driving the U.S. unemployment rate to 14.7 percent in 2020, …
In recent years, technological advances and structural shifts have catalyzed a surge in corporate investments in research and development (R&D), intellectual property, and other intangible assets. These developments reflect the growing importance of innovation-driven growth in the modern economy. In …
Studies have shown that the disclosure of information can affect a company’s technological innovation in different ways, depending on how complete or timely it is. The complete disclosure can promote innovation by making capital providers more receptive to providing financing, …
In the last half-century, technological progress has stagnated. The century from 1870 to 1970 brought electricity, running water, telephones, television, automobiles, and airplanes. Life expectancy at birth rose from 45 to 72. But since the early 1970s, progress has been …
Antitrust regulators around the world, including in the UK, have recently proposed changes to merger review policies and enforcement strategies that have implications for how acquisitions of start-ups are investigated and evaluated. These changes will likely lead to heightened scrutiny—and …
Both formal and informal institutions affect economic behavior in important ways, as economist Douglass C. North explained in his 1993 Nobel Prize lecture. Formal institutions include laws and regulations, and informal institutions include culture and norms. In a recent study, …
Firms’ increasing reliance on information technologies has reshaped the global economy and disrupted entire industries while also presenting new and rapidly evolving sources of risk. Recent successful cyberattacks have harmed consumers, shareholders, and market professionals, often resulting in the illegal …
If short-termism shackles innovation, how do we break the chains? Our evidence suggests that increasing capital gains taxes for investors on short-term share appreciation is one possible solution.
Research shows that myopic focus on short-term earnings hurts investments in research …
Innovation and its main output, technology, are changing the way we work, socialize, vote, and live. New technologies have improved our lives and made firms more productive, raising living standards across the world. Thanks to progress in information technology, the …
Given the need to strengthen protection for minority shareholders, Italy has moved towards a more efficient corporate governance system by introducing mandatory list voting for listed corporations. List voting in Italy requires the election of at least one director and …
Do U.S. companies focus too much on short-term profits at the expense of long-term investments, profits, and growth? There is considerable debate among academics, practitioners, and politicians about the relevance of short-termism, its possible sources, and potential mechanisms to mitigate …
Equity markets are an important source of capital financing for firms, particularly in the United States. These large, liquid markets channel capital from savers to firms and facilitate corporate investment by distributing risks among many smaller investors. There is concern, …
In addition to providing legal protection, patents serve a disclosure function aimed chiefly at inventors and technology customers. However, the effect of this disclosure on capital markets has been left largely unexamined in the literature, creating a gap in understanding …
Corporate short-termism has been much discussed over the past few decades, but has recently become a growing concern for the U.S. economy. Executives and politicians warn of increased market pressure on corporations to meet short-term performance metrics at the expense …
Corporate governance mechanisms that mitigate problems associated with the separation of ownership and control include board monitoring of managers, compensation incentives, a market for corporate control, and government regulation. Recently, shareholder activism has become an increasingly popular tool as well. …
The prescription drug industry has undergone a significant transformation in recent decades. The intensifying competition from generic drugs, the expanding power of entities that pay for drugs and negotiate drug prices, the increasing costs of drug development and gaining approval …