Projects

This paper examines the real effects of financial information dissemination on innovation. Broader dissemination of corporate disclosures can reduce the uncertainty associated with the expected value of R&D investments and increase clarity about the profitability of the underlying innovation to follow-on innovators. First, using the staggered adoption of the EDGAR system as a positive shock to information dissemination, I show that dissemination increases follow-on innovation. Next, I investigate the knowledge spillover effects from faster and easier access to technologically similar peers’ corporate disclosures. I find that firms leverage information from peers’ corporate disclosures to improve their own innovative efficiency. These positive externalities are also present at the aggregate industry level. Finally, dissemination causes firms to technologically differentiate their innovation portfolios from their peers’ portfolios, reducing investments in duplicative research. Overall, I document that broader dissemination of corporate disclosures has positive externalities on a firm’s follow-on innovation and aggregate innovative efficiency.

This paper examines to what extent information opacity exacerbates climate risks in supply chains. Understanding the information frictions in supply chain settings is important because disruptions originating from an opaque supplier can impose greater risk to the supply chain as a whole than those originating from a non-opaque supplier. Using proxies for the firm’s public information environments, we empirically examine the differential effects of information frictions during supply chain disruptions. Using natural disasters as firm-specific idiosyncratic climate shocks on suppliers, we find that customer firms suffer more when disrupted suppliers have opaque information environments. Moreover, these effects spill over further to other supply chain participants that are not directly linked to disrupted suppliers. These results are consistent with the disrupted firm’s information opacity exposing its trade partners to greater climate risks, resulting in greater economic losses. Additionally, we find that firms increasingly search their suppliers’ SEC filings when their suppliers are hit by climate-related shocks, suggesting trade partners find information in SEC filings useful despite extensive private information sharing. Overall, our paper speaks to the growing concerns over misinformation having a real impact during supply chain disruptions and highlights the role of public information environments in the context of supply chain climate risks.

We examine the relation between organization capital (OC) and information asymmetry manifested in insider trading profits. Risky payoffs from OC investments can create private information, but OC is also associated with management practices that lower agency problems. Empirically, we find that OC is positively associated with information asymmetry. Splitting the OC measure into advertising- and non-advertising-related components, we find that our results are mainly driven by non-advertising-related OC. Supporting construct validity, we map our input-based measures into output-based measures of intangible assets related to brands and human capital, captured in M&A transactions and ESG scores. Lastly, we find that OC, especially non-advertising-related OC, is associated with a lower likelihood of management forecasts and lower readability of financial statements. Overall, we highlight OC as source of private information and contribute to the measurement of intangible assets by decomposing OC into brand and human capital related components.