This paper examines how the relationship between firm value and patent-based indicators of inventive activity has changed over time. We use data from more than 33,000 mergers and acquisitions deals between 1985 and 2007, and distinguish between American (USPTO) and European (EPO) patents. Our results indicate that over time EPO patents have become the dominant indicator of innovative activity, ...

W a number of studies have considered the implications of employee mobility, comparatively little research has considered institutional factors governing the ability of employees to move from one firm to another. This paper explores a legal constraint on mobility—employee non-compete agreements—by exploiting Michigan’s apparently inadvertent 1985 reversal of its non-compete enforcement policy a...

We discuss and empirically examine a firm-level equivalent of the ancient problem of “tying the King’s hands,” namely how to maximize managerial intervention for “good cause,” while avoiding intervention for “bad cause.” Managers may opportunistically intervene when such intervention produces private benefits. Overall firm performance is harmed as a result, because opportunistic managerial inte...

The design of incentive compatible executive-compensation policies is a crucial element for firms that seek a competitive advantage in an effort to maximize owner wealth. In this paper, we examine the relationship between executive compensation and measures of firm performance that capture the economic profit earned by the firm, namely, EVA and MVA. We test the hypothesis that after controlling...

OBJECTIVE To examine whether the nationwide smoking ban, imposed in 2007, had an impact on the profitability of Belgian restaurants. DATA AND METHODS Objective financial reporting data on 1613 restaurants were analysed with return on assets as the outcome measure. The data were collected from the Belfirst database and cover the period 2004-2009. To assess the impact of the smoking ban, a diff...

Outlier identification often implies inspecting each z-transformed variable and adding a Mahalanobis D2. Multiple outliers may mask each other by increasing variance estimates. Caroni & Prescott (1992) proposed a multivariate extension of Rosner’s (1983) technique to circumvent masking, taking sample size into account to keep the false alarm risk below, say, α = .05. Simulations studies here co...

We study the results of a massive nationwide correspondence experiment sending more than 83,000 fictitious applications with randomized characteristics to geographically dispersed jobs posted by 108 largest U.S. employers. Distinctively Black names reduce probability employer contact 2.1 percentage points relative distinctively white names. The magnitude this racial gap in rates differs substan...