This article examines the case of U.S. corporate environmentalism as a dramatic instance of issue management over four decades. Drawing on administrative and trade publications, archival sources, and personal interviews, the article tracks the gradual adoption of issue management and strategic planning techniques by the environmental public relations industry, demonstrating the increasingly powerful role of PR in influencing environmental policy making in the United States. By tracing its origins in the realm of environmental issues, the article argues that issue management became, over a forty-year period, a key strategy to define, limit, and control the concept of the environment in American society. The issue management tactics deployed by public relations actors to counter environmental activism and regulation offer a paradigmatic example from which to derive critical insights about the twin evolution of American social movements and the public relations industry.

We document a strong decline in corporate-diversification activity since the late 1970s, and we develop a dynamic model that explains this pattern, both qualitatively and quantitatively. The key feature of the model is that synergies endogenously decline with technological specialization, leading to fewer diversified firms in equilibrium. The model further predicts that segments inside a conglomerate should become more related over time, which is consistent with the data. Finally, the calibrated model also matches other empirical magnitudes well: output growth rate, market-to-book ratios, diversification discount, frequency and returns of diversifying mergers, and frequency of refocusing activity.

We use a proprietary data set to test the implications of several asymmetric information models on how short-lived private information affects trading strategies and liquidity provision. Our identification rests on information acquisition before analyst recommendations are publicly announced. We provide the first empirical evidence supporting theoretical predictions that early-informed traders “sell the news” after “buying the rumor.” Further, we find distinct profit-taking patterns across different classes of institutions. Uninformed institutions, but not individuals, emerge as de facto liquidity providers to better-informed institutions. Placebo tests confirm that these trading patterns are unique to situations in which some investors have a short-lived informational advantage.

This article documents the emergence, evolution, and acceptance of mortgage-backed securities (MBS) by bond investors in the United States between 1968 and 1987. Drawing on an analysis of trade publications, securities prospectuses, and business press, I argue that MBS issuers’ eventual success at convincing bond investors to accept their products is especially remarkable given that bond investors had rejected most types of MBS issued between 1970 and 1983. My analysis suggests that the acceptance of MBS as bonds was an outcome of two approaches employed by the MBS issuers: (1) changing the attributes of their products to make them more bond-like, and (2) changing the meaning of the bond category by opening its boundaries to products that incorporated mortgage features. These two approaches to changing investors’ beliefs to promote innovation acceptance may undergird the diffusion processes for other financial innovations. Understanding the process of innovation acceptance may be especially important because market participants have short memories. Forgetting the assumptions made during innovation–acceptance processes can bring unanticipated consequences of innovation adoption, such as financial crises.

We provide an entropy approach for measuring the asymmetric comovement between the return on a single asset and the market return. This approach yields a model-free test for stock return asymmetry, generalizing the correlation-based test proposed by Hong, Tu, and Zhou (2007). Based on this test, we find that asymmetry is much more pervasive than previously thought. Moreover, our approach also provides an entropy-based measure of downside asymmetric comovement. In the cross section of stock returns, we find an asymmetry premium: Higher downside asymmetric comovement with the market indicates higher expected returns.

Surprisingly few papers have attempted to develop a direct empirical test for overbidding in merger and acquisition contests. We develop such a test grounded on a necessary condition for profit-maximizing bidding behavior. The test is not subject to endogeneity concerns. Our results strongly support the existence of overbidding. We provide evidence that overbidding is related to conflicts of interest, but also some indirect evidence that it arises from failing to fully account for the winner’s curse.

Using a unique sample of newly privatized firms from 59 countries, this article provides new evidence about the agency costs of state ownership and new insight into the corporate governance role of country-level institutions. Consistent with agency theory, we find strong and robust evidence that state ownership is positively related to corporate cash holdings. Moreover, we find that the strength of country-level institutions affects the relation between state ownership and the value of cash holdings. In particular, as state ownership increases, markets discount the value of cash holdings more in countries with weaker institutions.

The law and practice concerning the responsibilities of businesses and the obligations of their home states in relation to private dealings in occupied territory are under-developed. The establishment of a database by the United Nations (UN) Office of the High Commissioner for Human Rights to monitor the activities of corporate actors in the Occupied Palestinian Territory (OPT) is an opportunity to provide much-needed guidance on the scope of application of existing international law in this paradigmatic case of a high-risk business environment. This article engages with the contribution of this initiative to the regulation of transnational corporate dealings through two normative issues: the structural characteristics and effects of the violations taking place in certain business environments maintained in the OPT on the responsibilities of business and home states; and the various modes through which businesses become directly linked with and contribute to the illicit property rights regime underpinning the existence of settlements and the serious human rights abuses perpetuated by their maintenance.

By the mid-twentieth century in the United Kingdom, musical instrument manufacturing had become an increasingly mechanized activity. Craft skills had been displaced in many areas, yet remained a vital source of competitive advantage in local and international markets and were particularly valued by professional musicians. This article examines the contrasting experiences of two British musical instrument manufacturers, tracing the unfolding relationship between their pursuit of entrepreneurial opportunities and capability development. Boosey & Hawkes, a large, well-established manufacturing and publishing company, was an early pioneer, while Paxman Bros., a small musical retailer, transformed itself into one of the world’s most respected specialist manufacturers. The narrative probes the factors that shaped decision making in these companies as they developed a series of design innovations for one of the more complex brass instruments: the French horn. It draws on relevant theoretical insights to examine how a dynamic interaction between opportunity and capability, coupled with unanticipated contingencies, contributed to divergent outcomes for each company.

The 1930s transformed American capitalism. This article interrogates the political economy of two business magazines created at the start of the Great Depression. I argue that Business Week’s and Fortune’s signature approaches to reporting articulated an ideal conception of the manager. The early century conception saw the manager as engineer of operational efficiency. The new ideal viewed the manager as a political economist coordinating firms with their external environment, notably an interventionist and scrutinizing state, volatile markets, and a critical public opinion.