As firms have more assets in place, more of management's limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory...

We examine the impact of employment protection legislation (EPL) on individual firms' growth opportunities, as measured by Tobin's q. On the one hand, by increasing job security, EPL spurs innovation effort. Yet that boost only occurs in firms with little comparative advantage at original...

As firms have more assets in place, more of management's limited attention is focused on managing assets in place rather than developing new growth options. Consequently, as firms grow older, they have fewer growth options and a lower ability to generate new growth options. This simple theory...

Over time, firms increasingly focus on their core competences. This evolution impairs their ability to manage noncore assets, which they should therefore divest. We test this prediction and find consistent evidence. Moreover, mature firms divest more in response to exogenous technology shocks....

Failure to correct for pension risk leads to upward-biased discount rate estimates in firms with pension risk exposure. The result is a negative and economically significant relation between pension risk and corporate investment. The effect is confined to investment decisions that require...