Motivating Innovation in Newly Public Firms

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-02-12

Summary:

Editor's Note: 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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Link:

http://blogs.law.harvard.edu/corpgov/2014/02/12/motivating-innovation-in-newly-public-firms/

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Tags:

academic research empirical research executive compensation entrenchment equity-based compensation incentives innovation ipos management nina baranchuk patents public firms rabih moussawi robert kieschnick stock options

Authors:

R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

02/12/2014, 13:50

Date published:

02/12/2014, 09:00