Elif Şişli Ciamarra 

PUBLICATIONS IN REFEREED JOURNALS

Diving into the Dark Pool: How Shadows Shape Compensation Packages for the Suits Upstairs

with Khaladdin Rzayev and Tanseli Savaser, Journal of Corporate Finance, Vol. 94, pp. 1-29, Sept. 2025.

Semifinalist, Best Paper in Corporate Finance, FMA 2024.

Does trading away from public exchanges affect the way top executives are paid? Yes, our study finds that companies with a higher proportion of shares traded in "dark" (i.e., off-exchange) venues tend to offer more stock-based compensation to their CEOs. This relationship is driven by enhanced price informativeness in lit (i.e., on-exchange/public) markets resulting from dark trading activities, making stock-based compensation a more attractive and effective tool for aligning executive incentives with shareholder returns. Consistent with this explanation, the impact is most pronounced in companies with opaque information environments and in firms whose compensation committees possess more financial expertise, hold more stock, and are less busy. We address endogeneity by using a treatment effects model and a differences-in-differences framework employing the SEC’s Tick Size Pilot Program as an exogenous shock to dark trading.

Breaking down the Silos between the Introductory Financial Accounting and Corporate Finance Courses

with John A. Schatzel and Alex Yen, Journal of Accounting and Finance, Vol. 23 Issue 1, pp. 147-167, 2023.

In this paper, we provide a broad overview of the topics that are taught in undergraduate financial accounting and corporate finance classes. Our main aim is to document the overlaps in these courses and identify the similarities and differences between how the topics are taught. We then identify specific ways that accounting and finance instructors can collaborate to stress complementary topics and thereby reinforce the connections between the two fields. We also recommend that further research be conducted to explore the feasibility of teaching the two courses concurrently in the same semester. Our paper will help instructors to reinforce the connections between the two fields in the classroom for more effective teaching and deeper learning. It also provides the first step towards building effective teaching materials for accounting and finance courses for successful integration.

Winner-Takes-All No More: Radical Transparency for Sustainable Specialty Coffee Value Chains

with Benjamin Marcus and Lee Phillip McGinnis, Journal of Agribusiness in Developing and Emerging Economies, Vol. 13 No. 3, pp. 490-503, May 2023 .

This paper seeks to understand the role of sensory quality scoring used at the competition auctions on pricing outcomes, and how the auction process could be improved to increase sustainability in the specialty coffee market. We build a conceptual model based on the extant literature and our analysis of data from 24 Best of Panama Auctions that took place between 2017 and 2021. We document a winner-takes-all outcome and significant price inversion in all auctions. We attribute these outcomes to the interactions of information-poor producers, information-rich intermediaries, and conspicuous consumers in competition auctions, where the product quality measurement is highly unreliable. Finally, we propose interventions to standardize the quality grading protocols and communicate them transparently to producers and consumers. The interventions we propose provide actionable guidelines to increase equity and sustainability for smallholder coffee producers.

CEO Incentives and Bank Risk over the Business Cycle

with Steven Ongena and Tanseli Savaser, Journal of Banking and Finance, Volume 138, May 2022 .

This paper shows that risk-taking incentives provided to bank executives are associated with higher bank riskiness during economic downturns. We attribute this result to the increase in moral hazard during downturns when the perceived probability of future bailouts and government guarantees rises. This result is particularly strong for larger banks, banks that maintain lower capital ratios or that are managed by powerful CEOs. Our findings highlight the importance of the interaction between managerial incentives and the macroeconomic environment. Boards and regulators should consider the countercyclical nature of the relationship between risk-taking incentives and bank riskiness when designing compensation packages. 

Differential Risk-Taking Implications of Performance Incentives from Stock and Stock Option Holdings

with Tanseli Savaser, Journal of Financial Research, Volume 42, Issue 3, pp. 609-636, 2019.

In this paper, we study the risk taking implications of managerial pay-for-performance incentives (delta). The extant empirical literature is built on the presumption that each unit of delta has an equal risk inducing effect regardless of its source. Instead, following the predictions of the principal-agent models of executive compensation, we differentiate between performance incentives from stock and option holdings. We show that while option delta is positively associated with firm riskiness, stock delta does not have a significant effect on risk taking. Consequently, the relationship between the total value of pay-for-performance incentives and firm risk strengthens as the relative contribution from option holdings increases. Our findings contribute to the debate on the executive pay reforms, stressing the need to consider the composition of stock-based pay when designing compensation packages to provide appropriate performance and risk incentives to the executives. [PAPER]

The A.G.E. Model:  Addressing Ageism at the Workplace through Corporate Social Responsibility

with Virginia Cortijo and Lee Phillip McGinnis, Journal of Labor and Society, Volume 22, Issue 1, pp. 197-213, March 2019.

Life expectancy around the globe has been steadily increasing and the challenges that stem from aging populations are too complex for the governments alone to shoulder. Companies can play a significant role in combating the economic and social costs of an aging society through their Corporate Social Responsibility (CSR) practices. In this paper, we propose the AGE framework (Acknowledge-Grow-Embrace) as a model that can be used by companies to take advantage of the diversity of thought, experiences, and skills of an age-diverse workforce, creating a sustainable and socially responsible workplace. In this model, Acknowledging that an organization may be practicing or allowing ageism activities and structures to persist in the firm is the first step that should be taken. Next, corporations should Grow their understanding of the different forms and levels of ageism present in their companies and begin to install systems that prevent age bias to finally Embrace employees of all ages and encourage them to share their knowledge and leverage their potential. [PAPER]

Donors and Founders on Charter School Boards: Financial and Academic Outcomes

with Charisse A. Gulosino, Education Finance and Policy, Volume 14, Number 3, Summer 2019.

Featured in "The Journalist's Resource"

This study provides the first systematic analysis of the composition of charter school governing boards. We assemble a dataset of charter school boards in Massachusetts between 2001 and 2013 and investigate the consequences of donor and founder representation on governing boards. We find that the presence of donors on the charter school boards is positively related to financial performance and attribute this result to the donors' strong monitoring incentives due to their financial stakes in the school. We also show that financial outcomes are not generated at the expense of academic outcomes, as the presence of donors on the boards is also associated with higher student achievement. Founder presence on charter school boards, on the other hand is associated with lower financial performance, but higher academic achievement. [PAPER]

Managerial Performance Incentives and Firm Risk During Macroeconomic Expansions and Recessions

with Tanseli Savaser, Review of Finance, 21 (2), 911-944, 2016.

Featured in - Harvard Law School Forum on Corporate Governance and Financial Regulation

Included in - Virtual Issue" Executive Compansation and Financial Literacy, Review of Finance

We argue that the relationship between managerial pay-for-performance incentives and risk taking is procyclical. We study the relationship between incentives provided by stock-based compensation and firm risk for U.S. non-financial corporations over the two business cycles between 1992 and 2009. We show that a given level of pay-for-performance incentives results in significantly lower firm risk when the economy is in a downturn. The documented procyclical relationship between incentives and risk taking is consistent with state-dependent risk aversion. Our findings contribute to the literature on the depressive effects of performance incentives on firm risk by documenting the importance of the interaction between performance incentives and risk aversion. [PAPER]

Executive Compensation, Risk Taking and the State of The Economy

with Alon Raviv,  Journal of Financial Stability, Volume 9, Issue 1, pp. 55-68, April 2013.

In this paper we present a model of executive compensation to analyze the link between incentive compensation and risk taking. Our model takes into account the loss in the value of an executive's expected wealth from employment if the firm becomes insolvent during a bad state of the economy. We illustrate that a given compensation package may lead to different levels of asset risk under different economic states. More specifically, we show that the positive relationship between equity-based compensation and risk taking may weaken and possibly disappear during systemic financial crises. An important policy implication from our analysis is that similar regulations may have different effects on risk taking depending on the state of the economy. [PAPER]

Conflicts of Interest on Corporate Boards: The Effect of Creditor-Directors on Acquisitions

with Jens Hilscher, Journal of Corporate Finance, 19, pp. 140-158, February 2013.

Eastern Finance Association, Outstanding Paper in Corporate Finance.

This paper investigates the effects on acquisitions of creditor-director presence on corporate boards. Using a hand-collected dataset for boards of large U.S. corporations, we find that companies with creditor-directors are more likely to engage in acquisitions with attributes that are unfavorable to shareholders and favorable to creditors (more diversifying and fewer cash-financed acquisitions). Consistent with these patterns, acquisition announcements are associated with lower shareholder value, higher creditor value, and lower overall firm value when a creditor is present. These results support the hypothesis that conflicts of interest between shareholders and creditors can result in value-destroying acquisitions. In addition, commercial bankers with no lending relationship are not affected by conflicts of interest. Where appropriate, our estimation strategy takes into account that there may be self-selection of bankers onto corporate boards. [PAPER]

Monitoring by Affiliated Bankers on Corporate Boards:  Evidence from Corporate Financing Outcomes

Financial Management, Volume 41, Issue 3, pp. 665-702, Fall 2012.

Included in “Monitoring Management” A Special Virtual Issue from Financial Management.

Using a hand-collected data set on boards of directors of large US nonfinancial companies, this paper investigates the effects of the presence of a creditor on a company's board. The results suggest that the presence of a creditor: 1) increases the amount of debt in a company's capital structure via an increase in private debt, 2) decreases the sensitivity of debt financing to the amount of tangible assets that a company holds, 3) decreases the cost of borrowing, and 4) reduces the pledge of collateral and financial covenants in debt contracts.  [PAPER]

The Asset Management Industry in Asia: Dynamics of Growth, Structure and Performance

with Ingo Walter, Financial Markets, Institutions and Instruments, Vol. 16, Issue 1, 2007.

We examine the industrial organization and institutional development of the asset management industry in Asian developing economies—specifically in China, Indonesia, Korea, Malaysia, Singapore, Philippines, and Thailand. We focus on the size and growth of the buy-side of the respective financial markets, asset allocation, the regulatory environment, and the state of internationalization of the fund management industry in its key components—mutual funds, pension funds, and asset management for high net worth individuals. We link the evolution of professional asset management in these environments to the development of the respective capital markets and to the evolution of corporate governance. We find that the fund management industry occupies a very small niche in domestic financial systems that are dominated by banks. At the same time, we find that its growth has been very rapid in the early 2000s and we suggest that this is likely to persist as the demand for professional management of financial wealth in the region develops and as the pension fund sectors of the respective economies are liberalized to allow larger portions of assets to be invested in collective investment schemes. [PAPER]

OTHER PUBLICATIONS

Parent Involvement in Charter School Governance

with Charisse A. Gulosino, in B. Beabout (Ed.), Family and Community Engagement in Charter Schools. (xx-xx). Bristol, UK: Information Age Publishing. (2023)

Charter School Financial Management and Oversight

with Charisse A. Gulosino, in Marilyn Hirth, Christine Kiracofe and Tom Hutton (Eds.), Charter School Finance. Charlotte, North Carolina: Information Age Publishing (IAP) Series. (2022)

Cross-Sector Alliances in Charter Schools:  The Role of Board of Directors in For-profit and Nonprofit Sectors

with Charisse A. Gulosino, in C. Lubienski, & M. Yemini (Eds.),  New agency in education? Understanding external participation in public schooling through partnerships, collaborations, alliances and entrepreneurialism - nuanced multi-case geo spatial analysis  Bristol, UK: Policy Press. (2022)

Executive Compensation and Risk Taking: The Impact of Systemic Economic Crises

with Alon Raviv, in Amann, W., Azarmi T. and Mathias Moersch eds The Financial Crisis - Implications for Research and Teaching, Springer Verlag (2016).

It is widely accepted that managerial compensation packages contributed to the excessive risk-taking practices that led to the onset of the Great Recession (2007-2009).  We argue that the relationship between managerial compensation and risk-taking is procyclical.  A given level of performance incentives may result in significantly lower firm risk when economy is in a systemic crisis because managers face an increased employment risk during economic downturns.  Students of finance who will become policy makers or who will sit on compensation committees would benefit from realizing that in order to implement a given level of firm risk, managerial compensation packages may need to be adjusted according to the state of the economy. [WP Version]

Asia in Global Governance: A Case for Decentralized Institutions

with Masahiro Kawai and Peter A. Petri, in Masahiro Kawai, Jong Wha Lee and Peter Petri eds. Asian Regionalism and the World Economy:  Engine for Dynamism and Stability, London: Edgar Elgar. (2010)

The global economic crisis refocused attention on the governance of international economic institutions (IEIs). This study uses the analytical framework of club theory to highlight structural obstacles to reform in international macroeconomic management, development finance, trade, and financial stability. The authors argue that reforms currently being discussed—for example, in voting power in the International Monetary Fund and the World Bank—are important, but not sufficient to make IEIs adaptable to the demands of a rapidly changing world economy. The authors propose transforming IEIs by shifting more decisions from the global to sub-global level. Partially decentralized decision making already exists in some policy areas (for example in regional development banks) and could expand and improve the provision of international public goods. [Book] [WP version]

Can High Interest Rates Stop Regional Currency Falls?  The Asian Experience in 1997-99

with Kenichi Ohno and Kazuko Shirono, ADBI Working Paper, No. 6 (1999)

During the Asian crisis, some crisis-hit economies raised domestic interest rates persistently in an effort to appreciate their currencies. Although Asian currencies eventually stabilized, it is still debated whether high interest rates contributed to the restoration of stability. Correlation and causality analyses using daily data show that the relationship among interest rates, exchange rates and external financial variables changed significantly when the crisis started. During the height of the crisis, currencies in the region exhibited high synchronization and mutual causation, which had not been visible in the pre-crisis period. Japanese and U.S. financial variables also influenced the movements of the Thai baht and the Korean won. By contrast, domestic interest rates suddenly lost their impact on exchange rates as the crisis worsened. The Asian currency turmoil and subsequent return to stability was a regional phenomenon, in which interest rate policies of individual economies did not seem to have any significant impact on calming collective market psychology. [PAPER]

PERMANENT WORKING PAPERS

Board Overlaps in Mutual Fund Families

with Abigail Hornstein.

We examine a unique characteristic of mutual fund governance: a common set of directors serving simultaneously on the boards of multiple funds within a fund family. At first glance, this governance structure appears to benefi t investors because it is associated with higher fund returns and better fund manager quality. However, funds with higher degrees of board overlap also charge higher marketing and distribution fees, which have been criticized as being the least transparent cost component for mutual fund investors. Board overlaps are also associated with detrimental unobserved actions by fund managers: window dressing and strategic performance transfer between funds occur more often in mutual fund families with greater degrees of director overlap. We conclude that director oversight of multiple funds is a mixed blessing.

Relationship Lending with Institutional Investors

with Debarshi Nandy and Pei Shao.

We use the recent development in the syndicated loan market, which saw the arrival of institutional investors, including hedge funds and private equity funds as lenders, as an opportunity to study lending relationships. We first show that institutional loans have loan spreads that are 11 to 13 percent higher than bank loans, ceteris paribus. The higher riskiness of institutional loans however, does not fully explain this additional spread. This result is robust after controlling for potential selection and endogeneity bias. Following information based theories we argue that this higher spread on institutional loans primarily serve as compensation to institutional lenders for engaging in costly information production about borrowers, since such institutional investors are new entrants to the syndicated loan market and thus less informed relative to banks. We also show that the loan spread differential between institutional and bank loans diminishes gradually with repeated interactions, a phenomenon that is attributable to the decreasing costs of information production for borrowers that repeatedly borrow from this market and reduced informational disadvantage of institutional lenders as they build relationships with the borrowers in this market over time.