Research Papers

Here is a list of my papers with short thematic summaries.  New working papers are at the top, while published papers are organized by topic underneath.  A chronological listing of my papers can be found on my CV.
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​To download any paper, just click on the paper's title.

New Working Papers 

​The Politicization of Social Responsibility

(with Manish Jha and Meng Wang)
Working paper, November 2023.
State-level politics appear to impact institutional investors’ voting decisions. Support for SRI proposals is lower in the same state when it is led by Republicans instead of Democrats. 

​When do Judges Throw the Book at Companies?
The Influence of Partisanship in Corporate Prosecutions

(with Mahsa Kaviani and Hosein Maleki)
Working paper, August 2022. [Revise & Resubmit]
The political affiliations of federal judges matters for the penalties they impose in corporate prosecutions, particularly during periods of greater political polarization. 

Active Investors and Index Investing

(with Jiaen Li and Donald B. Keim) 
Working paper, coming soon!
Increased index ownership affects active investors’ trading behavior and the characteristics of the active investors that exit and enter the active management universe.

Bonds Lie in the Portfolio of the Beholder:
Do Bonds Affect Equity Monitoring?

(with Manish Jha) 
Working paper, November 2022.
Institutional investors' bond holdings are associated with how actively they vote and monitor their equity investments.

Corporate Governance

​Who's Paying Attention? Measuring Common Ownership and Its Impact on Managerial Incentives

(with Erik P. Gilje and Doron Levit)
​Journal of Financial Economics, 137(1), 2020, 152-178.
Accounting for investor attention is important for assessing common ownership's impact on managerial incentives. ​

Playing it Safe?
​Managerial Preferences, Risk, and Agency Conflicts 

(with David A. Matsa)
​Journal of Financial Economics, 122, 2016, 431-455.
[Lead article for its issue & Winner of the 2014 IRRC Award]
Weakened governance leads many managers to take value-destroying actions that reduce their firms’ risk, and these actions appear driven by both managerial risk aversion and career concerns. ​

​It's Not So Bad:
Director Bankruptcy Experience and Corporate Risk Taking

(with Radha Gopalan and Ankit Kalda)
Journal of Financial Economics, 142(1), 2021, 261-292.
Directors actively learn from past experiences, and the experiences, and resulting risk attitudes, of an individual director affect corporate policies at other companies they serve as directors.

Growing Out of Trouble:
​Corporate Responses to Liability Risk

(with David A. Matsa)
​Review of Financial Studies, 24(8), 2011, pp. 2781-2821.  [Winner of Best Paper in Corporate Finance, 2009 WFA Meetings]
Risk-based managerial agency conflicts also affect firms’ investment and financing choices following an unanticipated increase in left tail risk.​

​The Big Three and Board Gender Diversity:
The Effectiveness of Shareholder Voice

(with Vishal Gupta, David Matsa, Sandra Mortal, Lukai Yang)
Journal of Financial Economics, 149(2), 2023, 323-348.
[Semi-finalist in the Weinberg/IRRCI Research Paper Award, 2021]
BlackRock, State Street, and Vanguard's public influence campaigns were highly successful at getting companies to increase gender diversity on their boards.

Standing on the Shoulders of Giants:
​The Effect of Passive Investors on Activism 

(with Ian R. Appel & Donald B. Keim) 
Review of Financial Studies, 32(7), 2019, 2720-2774.
Passive investors also facilitate activism by other investors by lowering the costs of certain activist tactics and by increasing the activists' likelihood of success.

Passive Investors, Not Passive Owners 

(with Ian R. Appel & Donald B. Keim)
Journal of Financial Economics, 121(1), 2016, pp. 111-141. 
[Winner of the 2015 IRRC Award]
[2015 Marshall Blume Prize, Honorable Mention]
Using their significant voting power, passive institutional ownership improves firms’ governance structures and long-term performance.

CEO Compensation and Corporate Risk-taking:
​Evidence from a Natural Experiment 

(with David A. Matsa and Todd Milbourn)
​Journal of Accounting and Economics, 56(2-3), 2013, pp. 79-101.
[2011 Marshall Blume Prize, Honorable Mention]
​When firms' risk environment changes, boards adjust the CEOs' exposure to stock price movements, and option-based pay encourages risk-taking by CEOs.

Identification

Common Errors: How to (and Not to) Control for Unobserved Heterogeneity

(with David A. Matsa)
​Review of Financial Studies, 27(2), 2014, pp. 617-61.  [2012 Marshall Blume Prize in Financial Research, Honorable Mention]
Discusses limitation of alternative estimators used to control for unobserved group-level heterogeneity, such as firms' industry or stocks' risk factors.
Programming advice [link]
​Presentation Slides [download]

Identification Using Russell 1000/2000 Index Assignments: A Discussion of Methodologies 

(with Ian R. Appel and Donald B. Keim)
​Critical Finance Review, Forthcoming, October 2020.
This paper discusses tradeoffs of various empirical methods used in recent papers that rely on Russell 1000/2000 index assignments for identification. 

Miscellaneous Topics

More Informative Disclosures, Less Informative Prices? Portfolio and Price Formation Around Quarter Ends 

(with Zachary Kaplan and Aadhaar Verma)
Journal of Financial Economics, 146(2), 2022, 665-688.
Fund trades vary systematically with the quarterly reporting cycle, and this change in trade dynamics is associated with greater return reversals and lower price efficiency at quarter ends.​

Limited Participation and Consumption-Saving Puzzles: A Simple Explanation and the Role of Insurance 

(with Hong Liu and Guofu Zhou)
Journal of Financial Economics, 96(2), 2010, 331-344.
Individuals’ desire to avoid downside risks can also explain their low stock market participation rates and high saving rates.

Too Big to Fail?
​Government Policy vs. Investor Perceptions 

(with Simon Johnson & Changyong Rhee)
​Review of Finance, 19, 2015, pp. 491-518.
The consolidation and globalization of financial institutions can facilitate “too big to fail” beliefs among investors.  We show that too big to fail beliefs among investors are not eliminated by government promises to not bail out systematically important firms.

Banking

Costly Information, Entry, and Credit Access

Journal of Economic Theory, 154, 2014, pp. 633-67.
Lender entry has the potential to create a segmented credit market where firms targeted by the new lenders benefit but all other firms are worse off.

The Impact of Foreign Bank Entry in Emerging Markets

Journal of Financial Intermediation, 19(1), 2010, pp. 26-51. 
​[Awarded most significant paper published in journal that year]
Consistent with the above theory, not all local firms benefit from foreign bank entry; many firms lose access to credit and suffer declines in subsequent performance. 

Quiet Life No More?
​Corporate Bankruptcy and Bank Competition

(with Nandini Gupta and Anand Jha)
Journal of Financial & Quantitative Analysis, 53(2), 2018, 581-611. 
Changes in banking-sector competition can also affect the incentives of creditors to pursue delinquent firms. Our findings suggest that less competitive banking sectors may contribute to the inefficiency of bankruptcy systems. 

Do Firms Adjust Their Timely Loss Recognition in Response to Changes in the Banking Industry? 

(with Bong Kim and Xiumin Martin)
​Journal of Accounting Research, 50(1), 2012, pp. 159-196.
The globalization of financial intermediation can also affect the incentives of local borrowers. We provide evidence that firms improve the quality of their financial statements following the entry of foreign lenders. 

Do Public Equity Markets Matter in Emerging Economies? Evidence from India

(with Radha Gopalan)
​Review of Finance, 27, 2013, pp. 1571-1615.
Researchers have long debated the relative importance of banks and capital markets for financial development and whether they are substitutes. We find that public equity markets are an important, not easily replaced source of financing.