We examine the role and economic consequences of emotions in influencing the judgment of corporate executives. Analyzing a large sample of U.S. public firms, we find that sunshine-induced good mood leads managers to make upwardly biased earnings forecasts. Importantly, our evidence implies that...

We propose that extra-organizational factors such as exposure to sunshine are an important driver of innovators' performance. Prior research highlights the critical role non-pecuniary factors play in influencing inventors' productivity, yet most of these studies focus on organizational and job...

In this paper, we examine how cultural norms along the dimensions of individualism-collectivism and uncertainty-avoidance affect corporate innovation. Using a comprehensive sample across 41 countries, we find that firms located in countries with higher levels of individualism generate more and...

This paper examines whether managerial ability facilitates corporate innovative success. First, we show that managerial ability is positively associated with innovative output. Second, we show that the positive association between managerial ability and innovative output is weaker for older CEOs...

This paper examines the role of local attitudes towards gambling on corporate innovative activity. Using a county's Catholics-to-Protestants ratio as a proxy for local gambling preferences, we find that firms located in gambling-prone areas tend to undertake riskier projects, spend more on...

This paper investigates how religion-induced attitudes toward change and diversity affect corporate acquisition decisions. By studying the variation in religious adherence across U.S. counties, we find that acquirer announcement returns and total synergy are larger in counties in which...

We examine the role that the emotional and mental states of innovative workers have on firm value through the innovation channel. Analyzing a large inventor-level dataset, we find that sunshine-induced mood is positively associated with the economic value that inventors generate for their firms...

We investigate the prevalence of informed options trading prior to takeover announcements, when the legal prohibition against insider trading is strictest. Although insider trading laws apply equally to the options and stock markets, the options market is considerably more transparent than the...

Using a large sample of 2,712 unique U.S. domestic takeovers over the period 1993 to 2014, we show a negative relation between the level of cash holdings and post-announcement corporate bond returns. Our findings support the agency cost of cash holdings view and show that bondholders and...

This paper investigates the effect that employee treatment schemes have on corporate innovation performance. We find that firms with better employee treatment schemes produce more and better patents through improving employee satisfaction and teamwork. Additional tests suggest that our main...