We examine the effect of foreign institutional investors on firm innovation. Using firm-level data across 26 non-U.S. economies between 2000 and 2010, we show that foreign institutional ownership has a positive, causal effect on firm innovation. We further explore three possible underlying mechanisms through which foreign institutions affect firm innovation: Foreign institutions act as active monitors, provide insurance for firm managers against innovation failures, and promote knowledge spillovers from high-innovation economies. Our article sheds new light on the real effects of foreign institutions on firm innovation.

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This study examines whether individualistic national culture is associated with stock price crash risk ('crash risk') for a sample of firms from 36 countries over the period of 1990-2015. We find robust evidence that firms in more individualistic cultural settings exhibit higher future crash risk. Digging deeper, we find that earnings management, excessive managerial risk-taking, and investors' difference of opinion and overconfidence are all possible explanations for the positive effect of individualism on crash risk.Overall, our findings suggest that individualism, as a key cultural dimension, has an important impact on investor welfare, manifested through crash risk. K E Y W O R D S earnings management, excessive managerial risk-taking, individualism, national culture, stock price crash risk J E L C L A S S I F I C A T I O N G12, G15

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