U.S. banks have increasingly diversified into activities traditionally considered as non-core for the banking sector. This paper investigates whether diversification influences banks' investment (credit) policy and profitability. Diversified banks appear to benefit from “coinsurance,” supply...

Abstract U.S. firms have reduced their investment in scientific research ("R") compared to product development ("D"), raising questions about the returns to each type of investment, and about the reasons for this shift. We use Census data that disaggregates "R" from "D" to study how US firms...