Research

Using detailed data on corporate ownership for private and public firms, we document the effects of group-affiliated IPOs on other (unlisted) firms in the group. We find evidence of significant and persistent increases in equity capital (+19%) and employment (+25%), with the latter effect being more pronounced for the more financially constrained, younger, and smaller firms within the group. By comparing the determinants and the ex-post effects of IPOs on affiliated and stand-alone issuers, we show that affiliated IPOs are less likely to be driven by the investment needs of the issuer. Altogether, this evidence is consistent with the hypothesis that relaxing financial constraints and expanding the workforce in group firms are intended objectives of affiliated IPOs rather than “side effects”.

"Mistake-based Discrimination in Early Stage Financing: Evidence from Security Choice" with L. Lindsey

Motivated by new stylized facts from Form D financings, we develop a simple framework in which security choice in early firm financing depends on the entrepreneurial talent contribution to firm value relative to capital, which investors may perceive with bias. Observed outcomes are not subject to such bias. Consistent with our model, female-led firms are more likely to use debt funding in early stages and exit at least as successfully as firms without a female founder, with a greater proportion of IPO exits. Female-led firms also have larger boards of directors at the initial stages, indicative of greater monitoring. The early differences in financing and monitoring subside in later rounds, suggesting that bias declines as information is produced. We argue that investors tend to under (over) estimate the human (physical) capital contribution to total firm value in female-led startups, offering new insight into the gender financing gap.

Work in Progress:

"Welcome on Board: The Spillover Effects of Mandatory Gender Quotas" with L.Guiso and F. Schivardi

Abstract The success of board quotas regulation in promoting gender balance hinges on whether its effect extends beyond the (few) firms and jobs directly targeted by law. So far, research has found no evidence of vertical spillovers, that is, indirect effects on workers within targeted firms. We study horizontal spillovers, i.e., the effects on boards of firms not directly targeted by the quotas. We examine the 2011 Italian law mandating gender quotas on boards of listed and state-controlled enterprises (target companies). We define “connected” firms as non-target firms that shared at least one board member with target companies prior to the reform. Employing a difference in differences design, we find that connected firms significantly increase the share of female board members post-reform compared to similar non-connected firms. Accounting for these horizontal spillovers, the effect of the reform on the number of female directors is at least twice as large as that computed for target firms alone. Our results suggest that the quotas law indirectly affected the supply of candidates for directorship positions available to connected firms, rather than increasing their demand for gender diversity on the board. This is due to both network persistence and information sharing between target and connected firms.