We show that political contributions are associated with reduced civil and criminal sanctions for fraudulent executives. These managers benefit more from contributions if their firm also gained from the fraud, if they occupy top positions in firms with weak boards, or if they contribute to powerful politicians. Political contributions reduce budgetary resources for government enforcers and lengthen the Securities and Exchange Commission’s case time-to-resolution. They also facilitate penalty transfer from fraudulent managers to the firm, resulting in their entrenchment and long-term destruction of shareholder value. Our findings highlight an agency cost of political contributions and a mechanism undermining the disciplining effect of regulations.

Exploiting demand shocks from changes in federal government spending, we examine how the organizational structure of a firm affects its investment behavior. Government spending shocks affect the investment of government-dependent conglomerate segments less than matched stand-alone firms. Investment also increases in lower government-dependent segments when other segments within the same firm experience positive demand shocks, indicating cross-subsidization between segments. We further show that this cross-subsidization leads to worse operating performance and increases the diversification discount. Our findings are robust after addressing the endogeneity of government spending.

We investigate whether international operations enhance information links between firms and foreign investors. Exploiting novel subsidiary-level data and within-location variations, we show that, after expanding into another country, a firm attracts greater investment allocation from funds from that country than from other foreign funds. This increase is economically significant, equivalent to one-fifth of the average firm weight in a country-specific portfolio. The observed effect cannot be attributed to funds’ influence, persists even when funds are already familiar with the firm, and helps them generate superior risk-adjusted returns. Our results suggest that firms’ cross-border economic activities contribute to global financial interconnectedness.

We study how firms alter investment projects to mitigate exposure to political uncertainty. We examine deal-level merger data and find that, in addition to delaying and forgoing merger announcements, acquirers shift merger announcements earlier in time to avoid the period between announcement and effective dates overlapping an election, shift targets geographically away from election states, decrease the size of election-year deals, and shift from equity to cash financing for election-year deals. These results are stronger for acquirers with tighter financial constraints and deals more likely to be financed with equity and show financing matters to firms’ responses to election uncertainty.

This study highlights the positive impact of a stock market listing on workplace safety. We find that workplace injuries in publicly listed firms are lower than those in comparable private firms, and this effect relates to heightened monitoring by the media and regulators. The media pays more attention to public firms’ safety issues than to those of private firms, and the reduced media scrutiny due to local newspaper closures leads to greater increases in injuries in public firms. Regulators also monitor public firms more strictly, evidenced by a higher likelihood of nonroutine inspections and larger penalties for detected violations.

The value of statistical life (VSL) is arguably the most important number in benefit–cost analyses of environmental, health, and transportation policies. However, agencies have used a wide range of VSL values. One reason may be the embarrassment of riches when it comes to VSL studies. While meta-analysis is a standard way to synthesize information across studies, we now have multiple competing meta-analyses and reviews. Thus, to analysts, picking one such meta-analysis may feel as hard as picking a single “best study.” This article responds by taking the meta-analysis another step, estimating a meta-analysis (or mixture distribution) of seven meta-analyses. The baseline model yields a central VSL of $8.0 m, with a 90 % confidence interval of $2.4–$14.0 m. The provided code allows users to easily change subjective weights on the studies, add new studies, or change adjustments for income, inflation, and latency.

The relationship between costs and health benefits of branded pharmaceuticals remains controversial. This paper examines the incremental costs incurred for incremental health benefits gained from the largest available sample of cost-effectiveness studies of branded drugs in the USA, the 1994–2015 Tufts Registry of Cost-Effectiveness Analyses. Earlier studies used small, specialized samples of drugs. We use linear regression analysis to estimate the association in those studies between additional quality-adjusted life years (QALYs) and incremental pharmaceutical costs. The preferred sample uses 476 studies involving branded pharmaceuticals with both higher costs and increased effectiveness compared to the previous standard of care. Regressions of costs on QALYs imply that an additional QALY is associated, on average, with a $28,561 increase in cost (95 % CI, $18,853–$38,270). This regression explains 20 % of the variation in sample costs. In this analytical sample, a share of the variation in the cost of pharmaceuticals is, therefore, not random but rather associated with variation in QALYs; prices are to some extent “value-based.” Our results are robust to varying sample inclusion criteria and to the funding source. In subgroup analyses, the highest cost per QALY was $44,367 (95 % CI, $35,373–$53,361). Costs of pharmaceuticals in this data set are, on average, lower than common estimates of the monetary value of a QALY to American consumers. As in other studies, we find that sellers of patent-protected beneficial new technology appear to capture only a fraction of the benefits provided.

Follower role orientations affect how followers approach the leadership process; however, there has been little insight into how individuals use these role beliefs to influence leader outcomes, particularly through their psychological and social leader-follower relationships. This research examines how co-production, passive, and anti-authoritarian follower role orientations affect a follower's influence on their leader and leader effectiveness indirectly through psychological closeness and relationship quality. The results from two studies suggest co-production role orientation had positive effects on influence on the leader through psychological closeness and on perceived leader effectiveness through closeness and leader-member exchange. Passive role orientation was negatively related to followers' influence on the leader through reduced psychological closeness in study 1, while anti-authoritarian role beliefs were negatively related to closeness in study 2. These findings suggest that when followers believe co-production is critical to the leadership process, closeness with the leader, relationship quality, and perceived leader effectiveness improve.

Adam Smith writes favorably about innovation in Wealth of Nations while writing unfavorably about a figure associated with innovation: the projector. His criticism of projectors prompts many scholars to claim that Smith disapproves of entrepreneurship. But Smith criticizes the projector not because he acts as an entrepreneur but because he fails to meet Smith’s moral standards for entrepreneurship. In Theory of Moral Sentiments, Smith conceives of a framework for moral entrepreneurship based on prudence. The framework consists of two principles: first, approach everyday matters with the general “tenor of conduct” that governs your life and trade, and second, approach life-changing matters with prudence and justice. Recognizing that Smith is concerned with the total effect that an entrepreneurial venture has on society beyond its immediate profits opens the door to engage with contemporary research that studies the ethical and moral externalities of entrepreneurship.

The extensive narrative of growth and development of the information and communication technologies (ICTs) in China by Jiang and Murmann (2022) and the discussion of Chinese strengths and weaknesses portray the remarkable progress that China has made, especially in technology relative to advances in the basic sciences. In our response, we situate their contribution in the larger context of Chinese economic growth and the challenges it faces in transforming these accomplishments into an embedded national capability to become a leading innovation economy and thereby deliver prosperity to its enormous but aging population. The contexts for the successes and weaknesses in ICT that Jiang and Murmann (2022) describe so admirably are vital for a more comprehensive understanding of their place in the overall development of China.