We study whether bank CEO optimism (optimistic bank) plays a role in technological progress. We find that optimistic banks lend more to smaller/riskier firms and charge higher loan spreads to compensate for the higher risk exposures. More interestingly, these optimistic banks prefer lending to...

We identify the endogenous social effects proposed by Manski (1993) in firm R&D spending. By using state-level Uniform Trade Secrets Act (UTSA) enactments as exogenous shocks, we find that focal firms respond positively to peers' R&D expenditure. The results suggest that managerial learning and...

We examine whether rival CEOs’ overconfidence influences a focal firm’s research and development (R&D) expenditure. We propose a stylized model based on an R&D competition game with CEOs having a keeping-up-with-the-Joneses preference. Our model predicts that the overconfidence level of...