Innovation is a contract intensive economic activity in a world of incomplete contracts. We show that trust mitigates incomplete contracting and enhances innovation by acting as an informal contracting mechanism. Trust plays an especially important role when formal laws and regulations are...

We examine the impact of financial reporting on corporate innovation. We find that firms that exhibit more conservative financial reporting generate fewer patents. Their patents also result in fewer citations and lower economic benefits. These effects of conservative financial reporting on...

This study investigates the effect of corporate hedging on stock price crash risk. We test two competing hypotheses. Under the transparency hypothesis, hedging reduces a firm's information asymmetry and lowers crash risk. Under the opacity hypothesis, hedging decreases financial reporting...

Technology spillovers have previously been shown to positively affect a firm's market value and innovation activities. We build on this literature by showing that value-relevant information from technology spillovers significantly reduces the likelihood of the focal firm experiencing a stock...