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Summary: In this issue of Cancer Discovery, Thomas and colleagues leverage mass spectrometry metabolomics, stable isotope labeling, and functional studies to explore metabolic vulnerabilities in cancers harboring mutations in isocitrate dehydrogenase (IDH). The authors present compelling data to support the claim that dysregulated lipid synthesis underpins a synthetic lethal target in cancers with IDH1, but not IDH2, mutations. See related article by Thomas et al., p. 496 (9).

DMC identity and annotation for all clusters. This is part 3/3 (file split by columns due to upload limitations)

DMC identity and annotation for all clusters. This is part 1/3 (file split by columns due to upload limitations)

Extended methods, supplementary figures and supplementary tables.

DMC identity and annotation for IDH2, DNMT3A, and IDH1/DNMT3A cohorts.

The supplementary methods contain a more detailed description of the analytic and experimental approach beyond the scope of the main methods section. Supplementary Figure S1. Ability of specific genomic lesions to predict epigenetic clustering. Supplementary Figure S2. ERRBS coverage. Supplementary Figure S3. Differential methylation at promoters and active enhancers. Supplementary Figure S4. DMC distribution. Supplementary Figure S5. Transcription factor binding site analysis at differentially methylated active enhancers in IDH2, DNMT3A, and IDH1/DNMT3A AMLs.

DMC identity and annotation for all clusters. This is part 2/3 (file split by columns due to upload limitations)

Processed data for MRT199665 and DMSO treated OCI-AML2 cells by RNA sequencing

Supplementary Figure S2.

Supplementary Table S6.

Supplementary Legends.

Does a bank’s dependence on different external funding sources shape its voluntary disclosure of information? We evaluate whether economic shocks that increase the supply of bank deposits alter the cost–benefit calculations of bank managers concerning voluntary information disclosure. We measure information disclosure using 10-K filings, 8-K filings, and earnings guidance. As for the funding shock, we use unanticipated technological innovations that triggered shale development and booms in bank deposits. Further analyses suggest that greater exposure to shale development reduced information disclosure by relaxing the incentives for managers to disclose information to attract funds from external capital markets. This paper was accepted by Kay Giesecke, finance.

We assess the impact of geographic diversification on a bank’s costs of interest-bearing liabilities. We employ a new identification strategy and discover that geographic expansion across U.S. states lowered funding costs. Consistent with expansion facilitating risk diversification, we find that (1) funding costs fall more when banks expand into states whose economies are less correlated with the banks’ state and (2) geographic diversification reduces the costs of uninsured, but not insured, deposits. Consistent with expansion intensifying agency frictions, which puts upward pressures on funding costs, we discover that geographic diversification reduces the costs of interest-bearing liabilities more in better-monitored and better-run banks. This paper was accepted by Tomasz Piskorski, finance.

Introduction: Acute myeloid leukemia (AML) has a poor prognosis, despite aggressive therapies and a recent expansion in the array of treatments. Treatment is often determined by mutations, which risk-stratify a patient’s leukemia or can identify mutations that serve as therapeutic targets. Although common mutations in AML have been extensively studied, less research has formally characterized the order by which mutations tend to occur and how this order relates to properties of the disease. Methods: We leveraged published, single-cell DNA sequencing data from three institutions to model the clonal evolution of AML. Sequencing had been performed using targeted sequencing panels covering 19 to 37 genes, and driver mutations were identified using conservative filters. Mutation trees were created using Single Cell Inference of Tumor Evolution (SCITE). Clonal evolution patterns, including across clinical timepoints, were identified and compared to patient characteristics, disease phenotype, and outcomes. The BeatAML dataset was leveraged to explore associations between mutation order and gene expression. Results: Using 835 driver mutations from 276 samples and 209 patients, we identified 223 total unique mutation patterns. Branched evolution primarily involves FLT3 and RAS pathway mutations, whereas certain mutation pairs, such as NPM1 and FLT3, always occurred linearly in the same clone. Although some mutation pairs, such as those related to DNA methylation versus the RAS pathway, tended to occur in a specific order, several cases exhibited atypical orderings. Early signaling gene mutations were associated with younger patient age and increased signaling mutation homozygosity while NRAS-first cases were associated with increased monocyte counts. NRAS-first cases were also associated with distinct gene expression patterns in the BeatAML dataset. Paired diagnosis and relapse samples revealed novel associations between mutations gained at relapse and their clonal context, and these analyses supported a relative fitness advantage for signaling mutations in clones containing mutations in NPM1 or genes affecting DNA methylation. Conclusions: Clonal evolution in AML can be reconstructed at scale using single-cell DNA sequencing data, and different mutation acquisition patterns are associated with distinct leukemia and patient characteristics, despite cases having similar co-mutation patterns. Citation Format: Matthew Schwede, Katharina Jahn, Linde A Miles, Robert L Bowman, Jack Kuipers, Troy M Robinson, Asiri Ediriwickrema, Andrew J Gentles, Ross Levine, Niko Beerenwinkel, Koichi Takahashi, Ravindra Majeti. Characterizing the order of mutation acquisition in acute myeloid leukemia using large-scale single-cell sequencing [abstract]. In: Proceedings of the AACR Special Conference: Acute Myeloid Leukemia and Myelodysplastic Syndrome; 2023 Jan 23-25; Austin, TX. Philadelphia (PA): AACR; Blood Cancer Discov 2023;4(3_Suppl):Abstract nr A49.

OncoKB, Memorial Sloan Kettering Cancer Center’s (MSK) precision oncology knowledge base (www.oncokb.org), is an FDA-recognized* somatic variant database that contains information about the oncogenic effect and clinical implications of genomic alterations in cancer. Since its 2016 public release, OncoKB has grown to include annotation for >5,770 alterations in ~700 cancer-associated genes. OncoKB data is integrated into the cBioPortal for Cancer Genomics and used to annotate >12,000 MSK patient sequencing reports annually, encompassing both solid tumor and hematological malignancies. Users in academic, commercial and hospital settings outside MSK can programmatically access OncoKB data via its web API with an OncoKB license, which is free for academic research. To date, users from ~ 1400 institutions across >70 countries have licensed access to OncoKB annotations. The OncoKB Therapeutic (Tx) Levels of Evidence assign tumor-type specific clinical actionability to individual mutational events based on data supporting whether an alteration is predictive of response to matched targeted therapies. To date, OncoKB includes 44 Level 1 genes (included in the FDA drug label), 23 Level 2 genes (included in professional guidelines), 33 Level 3A genes (predictive of drug response in well-powered clinical studies), 27 Level 4 genes (predictive of drug response based on compelling biological evidence), and 11 R1/R2 resistance genes. In 2022, several major content additions were made to OncoKB based on key shifts in the precision oncology landscape. For example, OncoKB included 2 new tumor-agnostic FDA drug approvals, dabrafenib + trametinib and selpercatinib for BRAF V600E and RET fusion-positive solid tumors respectively (Level 1), capturing 5 tumor-agnostic FDA drug approvals to date. OncoKB promoted ERBB2 oncogenic mutations and FGFR1 fusions to Level 1 following their inclusion as patient eligibility criteria in FDA drug labels for trastuzumab deruxtecan (NSCLC) and pemigatinib (myeloid/lymphoid neoplasms) respectively. NCCN guidelines for uterine sarcoma and pancreatic cancer listed PARP-inhibition for BRCA-mutant disease, making them Level 2 in these indications. Lastly, previously considered undruggable targets, TP53 Y220C and KRAS G12D, were included in OncoKB based on compelling evidence demonstrating response to allele-targeting drugs, PC14586 and RMC-6263, respectively. In sum, 7 novel clinically actionable biomarkers (Levels 1-4) and 11 follow-on precision oncology therapies for existing leveled biomarkers were added to OncoKB in 2022. Current OncoKB efforts are focused on prioritized high-volume cancer gene curation for annotation of whole exome/genome data, annotation of germline alterations and development of a clinical trials matching system. *FDA recognition of OncoKB is partial and limited to the information clearly marked on www.oncokb.org. Citation Format: Sarah P. Suehnholz, Moriah Nissan, Hongxin Zhang, Ritika Kundra, Calvin Lu, Amanda Dhaneshwar, Nicole Fernandez, Stephanie Carrero, Maria E. Arcila, Marc Ladanyi, Michael F. Berger, Aijazuddin Syed, Rose Brannon, Ross Levine, Ahmet Dogan, Ezra Rosen, Alexander Drilon, David B. Solit, Nikolaus Schultz, Debyani Chakravarty. OncoKB, MSK’s precision oncology knowledge base. [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2023; Part 1 (Regular and Invited Abstracts); 2023 Apr 14-19; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2023;83(7_Suppl):Abstract nr 6585.

The purpose of this study is to identify key regulatory pathways that potentially drive abnormal gene expression program in relapsed Acute Myeloid Leukemia (AML) patients, by integrative computational analyses on multi-omics molecular profiles. Relapsed AML remains a clinical challenge. Epigenetic heterogeneity may contribute to transcriptional dysregulation and disease progression in AML. However, what specific transcriptional programs and potential regulatory mechanisms contribute to disease relapse are not yet well understood. To characterize the global transcriptional landscapes in relapsed AML, we integrated genomics data from two cohorts of matched diagnosis and relapse patient specimens. We identified 5,416 differentially expressed genes (DEGs) between diagnosis and relapse in Cohort I. Unsupervised clustering yielded three distinct DEG groups: group A, B and C genes that were predominantly (88%) down-regulated, divergently regulated, or predominantly (65%) up-regulated, respectively, upon relapse. The expression pattern of all DEGs separated the patients into two clusters, most robustly by Group B genes. Interestingly, the majority of DEGs did not associate with changes in gene promoter methylation. Similar patterns were observed in Cohort II. We used Binding Analysis for Regulation of Transcription (BART) to identify transcriptional regulators (TRs) that potentially regulated the DEGs not associated with DNA methylation changes, and assessed the differential expression of identified TRs during disease progression. PU.1 was identified as a potential TR for Group A genes and was down-regulated upon relapse. GATA1 and TAL1 were identified as regulating Group B genes and were up-regulated in patient cluster1 and down-regulated in cluster2, consistent with the expression pattern of Group B genes. RBBP5 was a top predicted TR for Group C genes and was up-regulated upon relapse. We next validated the potential functionality of those predicted factors. In NSG mice transplanted with a human AML specimen, TAL1 and GATA1 were downregulated in AML cells collected four weeks after chemotherapy treatment, and were inferred as TRs for the down-regulated genes, similar to the patient data. PU.1 was inferred as regulating the up-regulated genes. Furthermore, we found that the level of differential expression of TAL1, GATA1, and PU.1 in each patient specimen associated with the correlation of DEG profiles between the patient specimen and TR perturbation in human-derived hematopoietic cell lines. Our results support the possibility that in some AML patients, TRs with roles in hematopoiesis and leukemia might contribute to disease relapse. Further mechanistic studies deciphering the molecular and phenotypic events facilitated by these TRs will yield significant insight into disease biology and possible therapeutic targeting approaches in relapsed AML. Citation Format: Zhenjia Wang, Yaseswini Neelamraju, Cem Meydan, Nicholas Dunham, Jorge Gandara, Tak Lee, Subhash Prajapati, Franck Rapaport, Caroline Sheridan, Paul Zumbo, Michael Becker, Lars Bullinger, Martin Carroll, Richard D’Andrea, Richard Dillon, Ross Levine, Christopher E. Mason, Ari Melnick, Donna Neuberg, Stefan Bekiranov, Chongzhi Zang, Francine E. Garrett-Bakelman. Gene expression profiles reveal distinct regulatory activities of transcription factors GATA1 and TAL1 upon AML relapse [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2023; Part 1 (Regular and Invited Abstracts); 2023 Apr 14-19; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2023;83(7_Suppl):Abstract nr 3155.

Background Clonal Hematopoiesis (CH) is a well-established risk factor for adverse clinical outcomes including all-cause mortality, cardiovascular disease, and progression to hematologic malignancies. The presence of CH has been shown to adversely impact overall survival in non-hematologic cancers, however whether CH modulates response to specific therapies in breast cancer is not known. Here we investigate the impact of CH mutations on disease progression in patients with metastatic estrogen receptor (ER) positive breast cancer undergoing treatment with first line CDK4/6 inhibitors and endocrine therapy (CDK4/6i+ET). Methods We analyzed data from a well annotated cohort of patients with ER+ breast cancer who received endocrine therapy and CDK4/6 inhibitors. All patients underwent prospective tumor and matched WBC sequencing utilizing the MSK-IMPACT assay. CH variants were detected in blood samples utilizing the well-validated variant detection and filtration pipeline of MSK-IMPACT. CH mutations were defined as putative drivers (CH-PD) or non-putative drivers (CH) as previously described. To ensure the presence of CH at the time of therapy initiation, only patients who had CH sampling performed from 6 months before through 4 months after initiation of CDK4/6i+ET were included. We compared progression free survival (PFS) in patients with and without CH, as well as by CH-PD status and DNMT3A CH mutations. We investigated clinical covariates including type of endocrine therapy, receipt of prior neoadjuvant or adjuvant chemotherapy, and age at start of CDK4/6i+ET. Results The final cohort was comprised of 378 patients, of whom 135 (35.7%) had CH. The median time between sample collection and CDK4/6i+ET initiation was 0 (IQR -0.79 to 0.47 months). Patients with CH were older at time of therapy initiation (median 63.0 versus 54.7 years, p < 0.001). There were no significant differences between groups in terms of endocrine therapy (aromatase inhibitor or fulvestrant), prior chemotherapy, and time from CH sample collection to CDK4/6i+ET start. Univariate Cox-proportional hazard analysis did not reveal a difference between progression free survival and overall CH (HR 0.96, 95% CI 0.75 – 1.23, p = 0.76), CH-PD (HR 1.05, 0.77 – 1.43, p = 0.77), or DNMT3A mutations (HR 1.12, 0.80 – 1.60, p = 0.52) compared to patients without CH. Interestingly, age less than 60 years was found to be associated with PFS outcome (univariate HR 1.57, 1.22 – 2.01, p = 0.0004). Multivariate analysis adjusted for endocrine therapy partner and age at CDK4/6i+ET therapy did not reveal an association between outcome and overall CH (HR 1.07, 0.83 – 1.39, p = 0.59). In patients younger than age 60, presence of overall CH did not confer a significant PFS difference (HR 0.90, 0.63 – 1.29, p = 0.57). In the subset of patients older than 60 (n = 168) presence of CH conferred numerically, but not statistically, significant shorter PFS (HR 1.41 [0.96 – 2.09], p = 0.08). In this population, CH-PD conferred a shorter PFS (HR 1.75, 1.12 – 2.72, p = 0.02). Conclusion We found that CH, CH-PD and DNMT3A CH mutations did not affect PFS among metastatic ER+ breast cancer patients treated with first line CDK4/6 inhibitors. Younger age was associated with increased risk of progression, warranting further investigation. In the subset of patients with age older than 60, CH-PD conferred a shorter PFS. Further data, incorporating records of dose reductions, will be presented at the meeting. Citation Format: Jacqueline Tao, Pablo Sanchez Vela, Anton Safonov, Emanuela Ferraro, Sebastia Franch Exposito, Kamal Menghrajani, Ryan Ptashkin, Elizabeth Comen, Lior Z. Braunstein, Mark E. Robson, Sarat Chandarlapaty, Jorge Reis-Filho, Michael Berger, Ahmet Zehir, Larry Norton, Ross Levine, Pedram Razavi. Impact of clonal hematopoiesis on disease progression following CDK4/6 inhibitor therapy [abstract]. In: Proceedings of the 2022 San Antonio Breast Cancer Symposium; 2022 Dec 6-10; San Antonio, TX. Philadelphia (PA): AACR; Cancer Res 2023;83(5 Suppl):Abstract nr P4-02-18.

Does the predeal geographic overlap of the branches of two banks affect the probability that they merge, postannouncement stock returns, and postmerger performance? We compile information on U.S. bank acquisitions from 1984 through 2016, construct several measures of network overlap, and design and implement a new identification strategy. We find that greater predeal network overlap (1) increases the likelihood that two banks merge; (2) boosts the cumulative abnormal returns of the acquirer, target, and combined banks; and (3) reduces employment, boosts revenues, reduces the number of branches, improves loan quality, and expedites executive turnover. This paper was accepted by Tomasz Piskorski, finance.

We investigate how communication within banks affects small business lending. Using travel times between a bank’s headquarters and its branches to proxy for the costs of communicating soft information, we exploit shocks to these travel times—the introduction of new airline routes—to evaluate the impact of within-bank communication costs on small business loans. We find that reducing headquarters-branch travel time boosts small business lending in the branch’s county. Several extensions suggest that new airline routes facilitate in-person communications that boost small-firm lending.

We evaluate the impact of the African slave trade between 1400 and 1900 on modern household finance. Exploiting cross-country and cross-ethnic group differences in the intensity with which people were enslaved and exported from Africa, we find that slave exports during the 1400–1900 period are negatively associated with current measures of household (a) access to financial services, (b) access to credit, (c) use of mobile finance and (d) trust in financial institutions, suggesting that the slave trade has had an enduring, deleterious effect on household finance.

Somatic mutations in cancer genes have been ubiquitously detected in clonal expansions across healthy human tissue, including in clonal hematopoiesis. However, mutated and wildtype cells are morphologically and phenotypically similar, limiting the ability to link genotypes with cellular phenotypes. To overcome this limitation, we leveraged multi-modality single-cell sequencing, capturing the mutation with transcriptomes and methylomes in stem and progenitors from individuals with DNMT3A R882 mutated clonal hematopoiesis. DNMT3A mutations resulted in myeloid over lymphoid bias, and in expansion of immature myeloid progenitors primed toward megakaryocytic-erythroid fate. We observed dysregulated expression of lineage and leukemia stem cell markers. DNMT3A R882 led to preferential hypomethylation of polycomb repressive complex 2 targets and a specific sequence motif. Notably, the hypomethylation motif is enriched in binding motifs of key hematopoietic transcription factors, serving as a potential mechanistic link between DNMT3A R882 mutations and aberrant transcriptional phenotypes. Thus, single-cell multi-omics pave the road to defining the downstream consequences of mutations that drive human clonal mosaicism.

SCLC is a highly aggressive neuroendocrine tumor that is characterized by early acquired therapeutic resistance and modest benefit from immune checkpoint blockade (ICB). Repression of the major histocompatibility complex class I (MHC-I) represents a key mechanism driving resistance to T cell-based immunotherapies.We evaluated the role of the lysine-specific demethylase 1 (LSD1) as a determinant of MHC-I expression, functional antigen presentation, and immune activation in SCLC in vitro and in vivo through evaluation of both human SCLC cell lines and immunocompetent mouse models.We found that targeted inhibition of LSD1 in SCLC restores MHC-I cell surface expression and transcriptionally activates genes encoding the antigen presentation pathway. LSD1 inhibition further activates interferon signaling, induces tumor-intrinsic immunogenicity, and sensitizes SCLC cells to MHC-I-restricted T cell cytolysis. Combination of LSD1 inhibitor with ICB augments the antitumor immune response in refractory SCLC models. Together, these data define a role for LSD1 as a potent regulator of MHC-I antigen presentation and provide rationale for combinatory use of LSD1 inhibitors with ICB to improve therapeutic response in SCLC.Epigenetic silencing of MHC-I in SCLC contributes to its poor response to ICB. Our study identifies a previously uncharacterized role for LSD1 as a regulator of MHC-I antigen presentation in SCLC. LSD1 inhibition enables MHC-I-restricted T cell cytolysis, induces immune activation, and augments the antitumor immune response to ICB in SCLC.

Do antitrust laws influence corporate valuations? We evaluate the relationship between firm value and laws limiting firms from engaging in anticompetitive agreements, abusing dominant positions, and conducting M&As that restrict competition. Using firm-level data from 99 countries over the 1990-2010 period, we discover that valuations rise after countries strengthen competition laws. The effects are larger among firms with more severe pre-existing agency problems: firms in countries with weaker investor protection laws, with weaker firm-specific governance provisions, and with greater opacity. The results suggest that antitrust laws that intensify competition exert a positive influence on valuations by reducing agency problems. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Do cross-country differences in labor regulations shape (1) acquiring firms’ announcement returns and post-acquisition profits, costs, and revenues from cross-border deals, (2) the selection of cross-border targets, or (3) the success rates of cross-border offers? We discover that acquiring firms enjoy smaller abnormal returns and post-deal performance gains with targets in stronger labor protection countries; acquirers are more likely to purchase labor-dependent targets in weak labor regulation countries and more likely to use cross-border acquisitions to enter new markets when targets are in stronger labor regulation countries; and offer success rates fall when targets are in stronger labor regulation countries.

We assemble new data on the British and French concessions in Shanghai between 1845 and 1936 to assess the legal origins view of financial development. During this period, two regime changes altered the degree to which the British common and French civil law traditions held jurisdiction over the respective concessions: the 1869 formation of the Mixed Courts strengthened Western legal jurisdiction, while the 1926 rendition agreement returned those courts to Chinese control. By examining the changing application of different legal traditions to adjacent neighborhoods within the same city, we address identification challenges associated with cross-country studies. Consistent with the legal origins view, the financial development advantage in the British concession widened after the formation of the Courts and shrank after their rendition.

Why did banks experience massive deposit inflows during the pandemic? We discover that deposit interest rates at bank branches in counties with higher COVID-19 infection rates fell by more than rates at branches—even branches of the same bank—in counties with lower infection rates. Credit drawdowns, national policies, such as the Payment Protection Program, and a flight-to-safety do not account for these cross-branch changes in deposit rates. Evidence suggests that higher local COVID-19 infection rates are associated with households’ greater anxiety about future job and income losses, anxiety that induces households to reduce spending and increase deposits.

What is the impact of credit conditions on family interactions and children’s human capital development? We discover that regulatory reforms that ease credit conditions are associated with (1) increases in labor demand and the employment of mothers from low-income families, (2) decreases in parent-child discussions about school, reductions in parental supervision, and increases in children’s TV watching and video game playing among low-income families, and (3) declines in the time that children spend on homework and children’s academic performance among those same families. Effective substitutes for parent-child interactions, such as grandparents living in the household, mitigate these effects.

Why did banks experience massive deposit inflows during the first months of the pandemic? Using weekly branch-level data on interest rates and county-level data on COVID-19 cases, we discover that interest rates at bank branches in counties with higher COVID-19 infection rates fell by more than rates at other branches—even branches of the same bank in different counties. When differentiating weeks by the degree of stock market distress and counties by the likely impact of COVID-19 cases on economic anxiety, the evidence suggests that the deposit inflows were triggered by a surge in the supply of precautionary savings.

This paper studies whether there is a connection between finance and growth at the firm level. It employs a new dataset of 150,165 equity and bond issuances around the world, matched with income and balance sheet data for 62,653 listed firms in 65 countries over 1990–2016. Three main patterns emerge from the analyses. First, firms that choose to issue in capital markets use the funds raised to grow by enhancing their productive capabilities, increasing their tangible and intangible capital and the number of employees. Growth accelerates as firms raise funds. Second, the faster growth is more pronounced among firms that are more likely to face tighter financing constraints, namely, small, young, and high-R&D firms. Third, capital market issuances are associated with faster growth among firms located in countries with more developed capital markets relative to banks. Capital markets are also comparatively effective at allowing financially constrained firms to raise capital.

Theory offers differing perspectives and predictions about the impact of product market competition on corporate social responsibility (CSR). Using firm-level data on CSR from 2002 through 2015 and panel data on competition laws in 48 countries, we discover that intensifying competition induces firms to increase CSR activities. Analyses indicate that (a) intensifying competition spurs firms to invest more in CSR as a strategy for strengthening relationships with workers, suppliers, and customers and (b) the competition-CSR effect is stronger in economies where social norms prioritize CSR-type activities, e.g., treating others fairly, satisfying implicit agreements, protecting the environment, etc.

Since social distancing is the primary strategy for slowing the spread of many diseases, understanding why U.S. counties respond differently to COVID-19 is critical for designing effective public policies. Using daily data from about 45 million mobile phones to measure social distancing we examine how counties responded to both local COVID-19 cases and statewide shelter-in-place orders. We find that social distancing increases more in response to cases and official orders in counties where individuals historically (1) engaged less in community activities and (2) demonstrated greater willingness to incur individual costs to contribute to social objectives. Our work highlights the importance of these two features of social capital—community engagement and individual commitment to societal institutions—in formulating public health policies.

We evaluate the role of insider ownership in shaping banks’ equity issuances in response to the global financial crisis. We construct a unique dataset on the ownership structure of U.S. banks and their equity issuances and discover that greater insider ownership leads to less equity issuances. Several tests are consistent with the view that bank insiders are reluctant to reduce their private benefits of control by diluting their ownership through equity issuances. Given the connection between bank equity and lending, the results stress that ownership structure can shape the resilience of banks—and hence the entire economy—to aggregate shocks. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

A central debate in economics concerns the relationship between competition and innovation, with some stressing that competition discourages innovation by reducing post-innovation rents and others emphasizing that more contestable markets spur currently dominant and other firms to invest more in innovation. We examine the impact of competition laws on innovation. We create a unique firm-level dataset on patenting activities that includes over 1.4 million firm-year observations, across 68 countries, from 1991 through 2015. Using a new, comprehensive dataset on competition laws, we find that more stringent competition laws are associated with increases in firms’ number of self-generated patents and the citation-impact and explorative nature of those patents. We also conduct the first examination of the relationship between competition laws and firms’ acquisition of patents from other firms. We find that competition increases patent acquisitions but lowers the ratio of acquired to self-generated patents. The results hold when using country-industry data on 186 countries over the 1888-2015 period.

What is the impact of regulatory reforms that enhance credit market efficiency on children’s human capital? Using a parent-child panel dataset, we find that such reforms reduced children’s academic performance in low-income families. Consistent with the view that financial development entices low-income parents to substitute out of childrearing and into employment with adverse effects on children’s education, we find that among low-income families, regulatory reforms: increased mother’s employment hours, reduced parental supervision and parent-child discussions about school and college, and had bigger adverse effects when mothers were not already working full-time and grandparents were not living with the child. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Does the structure of the financial system influence the economy’s resilience to adverse shocks? Using high-frequency, U.S. county-level data on employment, small business revenue, and COVID-19 cases, we discover that employment, especially the employment of low-income workers, and the revenues of small firms fall by less in response to local COVID-19 cases in counties with a larger proportion of small banks. Furthermore, small banks increase lending to small businesses more than large banks in response to the pandemic. Evidence suggests that small banks provide countercyclical funding to small firms following an adverse shock, with positive repercussions on employment.

Theory offers differing perspectives and predictions about the impact of product market competition on corporate social responsibility (CSR). Using firm-level data on CSR from 2002 through 2015 and panel data on competition laws in 48 countries, we discover that intensifying competition induces firms to increase CSR activities as a strategy for strengthening relationships with workers, suppliers, and customers. The CSR-enhancing effects of competition depend on corporate ownership, with smaller effects among block-holders with shorter horizons (e.g., hedge funds) and among family-controlled firms. Furthermore, the competition-CSR effect is stronger (a) among less financially constrained firms that are better positioned to boost CSR activities and (b) in economies where social norms prioritize CSR activities, as this is where the relationship building effect of CSR are likely to be the greatest.