The following post comes to us from Nina Baranchuk
and Robert Kieschnick
, both of the Finance and Managerial Economics Area at the University of Texas at Dallas, and Rabih Moussawi of the Wharton School at the University of Pennsylvania.
How do shareholders motivate managers to pursue innovations that result in patents when substantial potential costs exist to managers who do so? This question has taken on special importance as promoting these kinds of innovations has become a critical element of not only the competition between companies, but also the competition between nations. In our paper, Motivating Innovation in Newly Public Firms, forthcoming in the Journal of Financial Economics, we address this question by providing empirical tests of predictions arising from recent theoretical studies of this issue.
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» The Harvard Law School Forum on Corporate Governance and Financial Regulation
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R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,