The problem: flying blind -- Misconception 1: small companies are more innovative -- Misconception 2: uncontested markets are good for innovation -- Misconception 3: spending more on R&D increases innovation -- Misconception 4: companies need more radical innovation -- Misconception 5: open...

A fundamental question in corporate strategy is how headquarters in multibusiness firms can create value above and beyond the burden of its own overhead. The leading theories from Chandler and Williamson hold this is possible through resource allocation across businesses. Yet there are...

We introduce and test a firm-level innovation-efficiency measure new to the finance literature. The measure, RQ, defined as the firm-specific output elasticity of R&D, was first developed in the management literature. RQ has low correlation with existing innovation input, output and efficiency...

Innovation is the principle driver of firm and economic growth. Thus one disturbing trend that may explain stagnant growth is a 65% decline in firms' RQ. We propose that the rise of outside CEOs is partially responsible for the decline. While this proposition was motivated by interviews with...

There is a prevailing view in both the academic literature and the popular press that firms need to behave more entrepreneurially. This view is reinforced by a stylized fact in the innovation literature that R&D productivity decreases with size. A second stylized fact in the innovation...