How does a CEO’s early-life poverty trauma exposure affect a firm’s involvement in poverty alleviation and the prioritization between generic and strategic involvement? We find that CEOs with such exposure are more likely to engage in both types of poverty alleviation initiatives. We further examine the asymmetry effect and find that these CEOs will prioritize strategic over generic involvement in poverty alleviation. We also conduct a post hoc analysis to test the mediating effect of emphasis on resource efficiency on the relationship between CEOs’ early-life exposure to poverty trauma and the relative emphasis on strategic over generic involvement in poverty alleviation. Using a sample of Chinese publicly listed firms from 2016 to 2021, we find strong support for our predictions. Our study contributes to the literature on CEOs’ early-life experiences and corporate poverty alleviation engagement.

We theorize on how and when CEO humility positively shapes stakeholders’ evaluations of a firm. We posit that CEO humility has a positive effect on organizational virtuousness and, hence, on firm reputation in the eyes of the government in China when the firm is intensively connected to government intermediaries. Data for this study were collected from a large-scale on-site survey and archives of 195 firms in 32 Chinese industrial towns. Our 1,099 respondents included 975 top managers and 124 local government officers. Empirical analysis results support our theory. We also complemented our quantitative findings with qualitative evidence. We offer a new perspective for understanding humble CEOs’ influence and condition in shaping their firms’ reputational judgments.

Evaluators, tasked with making funding decisions under conditions of incomplete information and uncertainty, are particularly susceptible to the influence of temporality and gender expectations. Drawing on the literature on signaling theory and gender expectations, this research examines the importance of past temporal focus in determining innovation funding decisions. Our empirical evidence suggests that innovation projects that focus on past events are more likely to receive favorable evaluations as past temporal focus signals better learning capacity among innovators. Moreover, we build on the signal credibility and visibility literature to support the notion that female-dominated presenting teams that emphasize past actions receive higher evaluations because the learning capacity signal is deemed more credible for women and female evaluators are more reactive to past-related signals, leading to higher evaluations for innovations with a past-focused narrative. Our study contributes to the literature on temporal focus and signal effectiveness and provides implications for mitigating the gender gap in accessing funding through temporal rhetoric.

This policy brief analyzes the effects of reclassifying large swaths of the federal civilian workforce currently appointed to the competitive service into Schedule F (Policy/Career Schedule) appointments. We review the policy when it was first introduced in 2020 and reinstated with amendments in 2025. In doing so, we draw from decades of extant literature within the organizational sciences to analyze the validity of one of its main assertions, that is, moving federal workers toward at-will employment is beneficial. Our analysis shows that, as it currently stands, the proposed reclassification into Schedule F would generate widespread, chronic job insecurity and fail to improve federal workers’ performance or accountability, in addition to other physical and psychological adverse consequences. It would also result in significant, negative outcomes for federal agencies in terms of their reduced ability to attract and retain competent civil servants, lower economic efficiency, and ultimately negatively impact the customers of federal agencies by increasing costs for lower quality governmental services.

As part of a larger campaign to end diversity, equity, and inclusion, President Donald Trump’s recent Executive Order 14173 eliminated EO 11246 “Equal Employment Opportunity.” In this brief, we provided background on the often-misunderstood EO 11246 and discuss the potential implications of its reversal considering previous state legislation banning affirmative action and the current political context.

Meritocracy is a central ideal in American workforce management, yet systemic biases and structural barriers often undermine its implementation. Executive orders (EO) 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, and 14281, Restoring Equality of Opportunity and Meritocracy, aim to reinforce meritocratic principles by eliminating diversity, equity, and inclusion (DEI) initiatives and disparate impact protections. However, these orders operate under the flawed assumption that a meritocracy will naturally emerge without intervention, disregarding evidence that superfluous factors outside merit impact organizational decisions. This policy brief argues that evidence-based DEI practices and disparate impact protections are not antithetical to meritocracy but are, in fact, necessary for its achievement. We discuss the implications of these EOs, focusing on how they may harm employee and organizational functioning and undermine the very principles they seek to uphold. Finally, we propose actions I-O psychologists can take, including issuing unified definitions of key terms, setting standards of practice for improving merit-based decision making, publicizing the broad utility of DEI initiatives and disparate impact protections, and advancing related research. These recommendations offer a path to uphold fairness and excellence in workforce management.

On January 20, 2025, President Donald Trump issued a presidential memorandum that mandated all federal employees return to in-person work full time. Implementation guidance from the Office of Personnel Management (OPM) required rapid policy revisions. The order marks a sharp departure from prior federal telework policies, including longstanding efforts to expand flexible work as a tool for recruitment, retention, productivity, and inclusion. Contrary to claims that in-person work boosts efficiency, research shows remote work generally has no adverse impact on productivity and supports performance in both public and private sectors. The return-to-office mandate is likely to lead to turnover, particularly among highly skilled workers, creating risks of brain drain and diminished capacity to compete with the private sector for talent. It also threatens diversity, equity, and inclusion (DEI) efforts by disproportionately burdening women, caregivers, individuals with disabilities, workers of color, and LGBTQ+ employees. These changes, alongside parallel executive actions undermining DEI programs, reflect a broader return to traditional, centralized models of work built on outdated “ideal worker” norms. These changes have the potential to negatively reshape federal employment for years to come.

This article studies the importance of corporate boards through a learning model in which capital markets learn about incoming directors’ quality. The model’s predictions are tested across a large sample of director appointments. Estimates show that governance-related uncertainty accounts for about 10% of stock return volatility when a new director joins. The learning framework provides a theoretically grounded approach to identify when directors matter more to investors. The analysis shows that director importance varies with board composition and firm attributes: Investors perceive directors as more important on boards with greater generational diversity, in smaller firms, and firms with higher knowledge capital.

Using the near universe of online job postings from 2007 to 2021, we construct a firm-level metric of labor market power. We find that firms with higher labor market power tend to have higher financial leverage. Our findings are not driven by product market competition or correlated labor market characteristics. The evidence is less pronounced among firms hiring in occupations with high labor mobility and skill transferability. To establish causality, we exploit the establishment of Amazon HQ2 in Crystal City as a shock to the labor market power of local firms and show consistent findings with our baseline results.

Recent executive orders (EOs) issued by the federal government, including EO 14148, EO 14151, EO 14168, and EO 14173, have significantly altered policies related to diversity, equity, inclusion, and accessibility (DEIA) in research and graduate training within industrial-organizational (I-O) psychology. These orders reverse longstanding federal commitments to DEIA initiatives, modifying research funding criteria, restructuring legal protections, and eliminating diversity-driven hiring mandates. This policy shift introduces substantial challenges for I-O psychology, particularly in securing funding for DEIA-related research, maintaining inclusive graduate training programs, and fostering diverse representation in academia and the workforce. To assess the impact of these policies, I examine the historical context of DEIA policies before these executive actions, outline key modifications introduced by the new EOs, and assess their potential implications for research, graduate education, and workforce development in I-O psychology. These policy changes may constrain academic freedom, reduce opportunities for underrepresented scholars, and disrupt progress in workplace diversity research, ultimately reshaping the field’s capacity to contribute to evidence-based DEIA initiatives.

We argue that cross-ownership increases the amount of private information in stock prices, enhancing the ability of stock prices to provide feedback to managers. Consistent with this argument, we find greater cross-ownership heightens a firm’s investment-q sensitivity. This effect is stronger for firms with a lower propensity for voluntary disclosure and for firms whose managers hold less private information. Furthermore, we find that cross-ownership is negatively associated with the sensitivity of a firm’s investment to its peers’ stock prices. Additionally, cross-ownership has a stronger impact on the investment-q sensitivity when measured among investors who trade more actively in the firm’s shares. By using financial institution mergers as an identification strategy, we strengthen the causal inference. Overall, our results suggest that cross-ownership helps increase revelatory price efficiency (RPE), potentially leading to more efficient corporate decisions.

Employing a cross-country sample, we examine how a population’s underlying cultural values help explain gender compensation variation across corporate executives. The results show that the cultural differences, embedded in societies long before the board’s compensation decisions, have significant explanatory power for the observed gender gap in executive compensation. Using an Oaxaca–Blinder decomposition combined with variables previously shown to be fundamental determinants of executive compensation, we find that adding cultural measures increases the model’s explanatory power of the gender compensation gap from 44% to 95%. We use further identification strategies to support causal inference.

This article examines how the entry of commercial lenders (CLs) transforms microfinance markets, focusing on borrower outcomes and market-wide spillovers. Using detailed credit registry data, we show that increased competition improves loan terms for both graduating and staying borrowers, generating sustained benefits. Our setting also allows us to document what happens when entry fails and entrants retreat following a crisis. Despite increasing defaults, borrowers who graduate to banks experience long-term gains, particularly through lower borrowing costs. Our findings highlight the broader benefits and risks of fostering competition in microfinance, providing valuable insights for policymakers and financial inclusion initiatives.

In a setting with a tradable value-weighted market index, ambiguity-averse investors do not trade, and the index is not mean–variance efficient. But when a passive fund offers the risk-adjusted market portfolio (RAMP), whose weights depend on information precision as well as market values, investors share risk via index investing and effectively hold the same portfolios as in the economy without model uncertainty. This follows from a new Information Separation Theorem: equilibrium portfolios are the sum of RAMP, which is the optimal portfolio conditional on public information, and their optimal private-information-based portfolios. RAMP is in equilibrium mean–variance efficient.

Earlier research finds correlation between sentiment and future economic growth, but disagrees on the channel that explains this result. We shed new light on this issue by exploiting cross-sectional variation in country size and market efficiency. We find that sentiment shocks in the largest advanced economies increase economic activity, but only temporarily and without affecting productivity. Conversely, sentiment shocks in smaller or less advanced economies predict prolonged economic growth and a corresponding increase in productivity. The results support the view that sentiment can create economic booms, although only in economies where sentiment and fundamentals are harder to disentangle.

This paper explores the impact of return-to-office (RTO) mandates on workplace inequality, particularly within the context of recent shifts in federal policies. The rapid adoption of remote and hybrid work, accelerated by the COVID-19 pandemic, offered significant benefits in terms of flexibility and work-life balance. However, recent regulatory changes, including RTO mandates, threaten to reverse these gains, disproportionately affecting women, caregivers, employees with disabilities, and low-wage workers. This paper critically examines the equity implications of RTO mandates and offers recommendations for industrial-organizational psychologists, organizational leaders, and policymakers to develop equitable, evidence-based approaches to remote and hybrid work that promote employee well-being and organizational effectiveness.

Existing portfolio combination rules that optimize the out-of-sample performance under parameter uncertainty assume multivariate normally distributed returns. However, we show that this assumption is not innocuous because fat tails in returns lead to poorer out-of-sample performance of the sample mean–variance and sample global minimum-variance (GMV) portfolios relative to normality. Consequently, when returns are fat-tailed, portfolio combination rules should allocate less to the sample mean–variance and sample GMV portfolios, and more to the risk-free asset, than the normality assumption prescribes. Empirical evidence shows that accounting for fat tails in the construction of optimal portfolio combination rules significantly improves their out-of-sample performance.

Predictive regressions of market returns on option-implied moments measured before pre-scheduled FOMC meetings show that tail risks play an important role in understanding the market risk premium around FOMC announcement days. Skewness and kurtosis, which capture investors’ expectations of the tails of the return distribution, robustly predict post-FOMC returns both in-sample and out-of-sample. The predictability lasts up to 1 week and is stronger for expansionary monetary policy shocks. The signs of the corresponding risk premiums are consistent with economic intuition, illustrating the role of periods with high risk premiums to confirm theoretical predictions.

This article studies how ESG and conventional mutual funds trade stocks during the COVID-19 crash. Both fund types trade individual stocks similarly: Net purchases of ESG stocks are less sensitive than other stocks to fund flows pre-crash, but sensitivities increase for all stocks during the crash. In contrast, ESG funds’ aggregate net purchases are less sensitive than those of conventional funds during the crash. This difference is due to ESG funds’ portfolio tilt toward the less flow-sensitive ESG stocks. There is no evidence of an ESG clientele effect in trading decisions, as both fund types trade individual stocks similarly.