The Real Effect of Smoking Bans: Evidence from Corporate Innovation

Gao, Huasheng; Hsu, Po–Hsuan; Kai, Li; Zhang, Jin

doi:10.2139/ssrn.2820474

Cited by 9 publications

(7 citation statements)

References 73 publications

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“…We have argued that hedge fund activism can lead productive employees to leave preemptively, with the assumption that employee departure is more likely to be voluntary (instead of involuntary) for those productive and valuable labor forces. To test such an argument, we collect treatment firms' and control firms' inventor mobility data from the U.S. Patent and Trademark Office (USPTO) PatentsView database, which covers all patents awarded by the USPTO over 1976–2017 (Gao, Hsu, Li, & Zhang, 2020; Kogan, Papanikolaou, Seru, & Stoffman, 2017). We follow Marx, Strumsky, and Fleming (2009) in identifying mobile inventors as changing employers if they have ever filed two successive patent applications assigned to different entities.…”

Section: Resultsmentioning

confidence: 99%

Hedge fund investor activism and human capital loss

Chen

Meyer‐Doyle

Shi

2021

Strategic Management Journal

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Research summary: Prior research suggests that hedge fund activism can benefit targeted firms. We explore a potential negative side‐effect of hedge fund activism: the unwanted loss of human capital in targeted firms. We find that firms targeted by hedge fund activists experience a greater departure of valuable employees compared with a matched sample of non‐targeted firms. Further, the positive effect of hedge fund activism on firm performance is stronger when firms experience a lower departure of valuable employees. These results suggest that hedge fund activism can lead to the unwanted loss of human capital, which may reduce the otherwise positive performance effect on targeted firms. These findings contribute to research on investor activism and human capital. Managerial summary: Hedge fund activism has been shown to benefit shareholders of targeted firms. We investigate a potential negative side‐effect of hedge fund activism: the unwanted loss of human capital in targeted firms. We find that targeted firms experience a greater departure of valuable employees when attacked by hedge fund activists, and that the positive performance effect of hedge fund activism is greater if that departure is smaller. Our results, together with additional analyses, are consistent with our argument that valuable employees decide to leave firms targeted by hedge fund activists to reduce the potential uncertainty and adversity for their careers, and that this human capital loss can harm firm performance. Our study has important implications for firms facing the potential prospect of hedge fund activism.

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Section: Resultsmentioning

confidence: 99%

Hedge fund investor activism and human capital loss

Chen

Meyer‐Doyle

Shi

2021

Strategic Management Journal

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“…According to Laforet (2011) financial resources are fundamental factors for innovations in Small enterprises. The SMEs adaptation or availability of advanced technology is only possible when the enterprise has funds to maintain and sustain the innovative programming ( Gao et al, 2016 ). The availability of finances for sustainable green innovation in SMEs is vital ( Khurana et al, 2021 ).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

New Schemes for Investment in of Small and Medium-Sized Enterprises of China: Role of Access to Finance, Innovation, and Sustainability

Tang

2022

Front. Psychol.

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Firm innovation relies heavily on financing, which is why it is a hot topic in the fields of finance and innovation management. Organizations can make strategic investments in production factors to develop competitive advantages because they have access to financial resources. This study investigated how financial literacy, innovativeness, and environmental sustainability influence the sustainability of small and medium-sized enterprises (SMEs). This was set as the primary objective in order to better understand the nature of the impact of financial literacy and innovation on the sustainability of SME firms. To test the hypotheses, structural equation modeling (SEM) was applied using data collected from 300 small businesses firms in China. The results revealed that financial literacy and innovativeness significantly influence small firms’ sustainability. Additionally, social inclusion significantly affects small firms’ sustainability, and sequentially has a significant effect on their performance. Research findings suggested that small businesses incorporate sustainability models into their operations and enhance financial knowledge in order to maintain sustainability.

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“…To estimate firm productivity, following Gao et al. (2020), we estimate the log-linear Cobb–Douglas production function for firms using cross-sectional regressions for each industry-year (with at least 10 firms).…”

Section: Robustness Testsmentioning

confidence: 99%

Employee welfare and firm financial performance revisited

Liang

Nguyen

Tran

et al. 2022

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PurposeThis study aims to revisit the link between employee welfare and firm financial performance using a large sample. Besides, the study explores mechanisms behind the link and heterogeneous effects of employee welfare on firm performance across firms and industries with different characteristics. These findings help partly explain mixed results in previous works.Design/methodology/approachThis study utilized KLD database data from 2001 to 2015 to capture the firm-level employee welfare, then analyze the link between employee welfare and firm financial performance. The findings are further verified using clustered standard errors ordinary least squares (OLS) regression analysis along with robustness testing, which supports the validity of our conclusions.FindingsThe research result confirms a positive association between employee-friendly practices and firm performance indicated by Tobin's q. Regarding the mechanisms linking the two, the study shows that higher employee welfare is positively associated with firm productivity and innovation investment, while it is negatively related to the cost of finance. Further, consistent with agency and modern management theories, the effect of employee welfare on financial performance is more pronounced for human-intensive (i.e. R&D-based) firms and firms with better corporate governance.Originality/valueThis study contributes to the existing literature on the association between employee welfare and firm performance in several ways. First, using the index of employee welfare from KLD can alleviate inherent limitations in previous studies. Second, the authors provide and validate the possible mechanisms linking employee welfare and firm value. Third, the authors also extend the literature by providing new insights into the employee welfare–firm performance nexus through a contingency perspective.

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The Real Effect of Smoking Bans: Evidence from Corporate Innovation

Cited by 9 publications

References 73 publications

Hedge fund investor activism and human capital loss

Hedge fund investor activism and human capital loss

New Schemes for Investment in of Small and Medium-Sized Enterprises of China: Role of Access to Finance, Innovation, and Sustainability

Employee welfare and firm financial performance revisited

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