Measuring Knowledge Capital Risk (JMP):

This study proposes a novel measure of yearly firm-level R&D-related risks by performing Latent Dirichlet Allocation (LDA) analysis on textual risk factors disclosed in firms' 10-K filings. I find that higher levels of R&D risks are associated with increased volatility and kurtosis in stock returns. This finding aligns with previous research on the R&D anomaly, suggesting a heightened expectation of tail risk (i.e., rare, extreme events) in stock returns for firms engaged in R&D ventures.

Intangible Capital and Hiring Practices:

How do heterogeneity in firms’ intangible capital intensity affects labor demand? As firms evolve the composition of their capital stock, this transformation requires a corresponding shift in both the composition and skill set of their workforce. In this paper, we combine a proprietary dataset from Dice.com and Compustat to examine the dynamics of how vacancy postings are influenced by firms’ intangible capital. We find out that firms with a higher concentration of intangible assets are less inclined to disclose wage information in their job postings. This suggests an increased bargaining power for workers and a shift towards novel forms of risk sharing between firms and employees, such as equity-based compensation schemes. This study sheds light on the evolving relationship between firm capital structure and labor market dynamics.