Mehmet Ihsan Canayaz

Assistant Professor of Finance

Smeal College of Business, Pennsylvania State University

Mehmet Ihsan Canayaz

Assistant Professor of Finance

Smeal College of Business

Pennsylvania State University

Contact Information:

342 Business Building

University Park, PA 16802

Phone: +1-814-863-3714

E-mail: mcanayaz at psu dot edu

Please find my Curriculum Vitae here.

Working Papers:

[1] Choose Your Battles Wisely: The Consequences of Protesting Government Procurement Contracts (2021) with Jess Cornaggia and Kimberly Cornaggia

We examine the relation between a firm’s successful protest of a government agency’s conduct or terms of a procurement contract and the amount of business the firm conducts with the government going forward. We find firms receive fewer and less valuable government contracts, face more contract cancellations, and experience significant reductions in sales growth and employee growth. Despite widespread belief, successful bid protesters do not delay government procurement due to lengthy dispute resolutions. Overall, we provide the first analysis of corporate interactions with the United States government bid-protest system.


2020 American Finance Association Meetings (San Diego), MFA 2020 Annual Meeting in Chicago, 2020 American Law and Economics Association (ALEA) Annual Meeting in Chicago, Clemson University*, Emory University*, Pennsylvania State University (Smeal College of Business and Harrisburg), Emory University*, and Temple University (Fox School of Business)*.

* denotes presentation by co-author

[2] Judicial Ideology and Business Dynamics (2021) with Matthew T. Gustafson

Using staggered changes in ideology of U.S. circuit courts, we examine the effect of judicial ideology on business decisions. We find evidence that shifts towards more liberal courts, which are commonly viewed as less pro-business, lead to business turnover. Turnover begins with increased establishment entry and job creation in the first five years, with establishment exits and job destruction peaking five to ten years afterwards. Additional tests suggest that this turnover results in an economy with fewer firms in judicially-sensitive industries, measured as industries exposed to litigation, intellectual property, and labor risks. Overall, our evidence suggests that conservative courts, act as a barrier to entry for new businesses, but also benefit firms in judicially sensitive industries.


Iowa State University*, Third Annual Conference on Law and Macroeconomics, University of Miami*, MFA 2021 Annual Meeting, University of Bath*, Vrije Universiteit Amsterdam, 2021 American Law and Economics Association (ALEA) Annual Meeting in Chicago.

* denotes presentation by co-author

[3] Prime and Punishment: Can Enforcements Stop Illicit Sellers on E-Commerce Platforms? (2020)

This paper provides the first exploration of how illicit sellers operate on e-commerce platforms and how they respond to enforcements. I use a novel data set of 71 million illicit — i.e., fraudulent, counterfeit, or replica — items that were removed from online marketplaces. By using natural language processing and computer vision techniques on these products and by tracking business activities of the illicit sellers, I identify a large number of similar but previously unnoticed illicit products (UIPs) that are currently sold online. For each illicit product that was previously removed, I detect 16.91 UIPs. Of these, 84% remained on the market during the one-year period after the removal of the initial illicit product. Nonetheless, the total market value of these products decreased by up to 80% after enforcements. My findings suggest that enforcements against illicit products on e-commerce platforms encourage separating equilibria, in which illicit sellers have weaker incentives to pool with authentic producers than to be revealed as low-quality producers.

[4] Capitol punishment: Effects of congressional seniority ranks on corporate outcomes in the U.S. (2019)

I study the effects of congressional seniority ranks on corporate outcomes in the U.S. I show that firms located in districts of lower-ranked legislators exhibit weaker sales to government, corporate downsizing, and lower valuations. These firms are also more exposed to civil disorder, including attacks that specifically target government offices, infrastructure, and employees. Seniority lotteries in House committees suggest that the links between congressional seniority ranks and corporate outcomes are causal.


University of Amsterdam, Analysis Group, Cornerstone Research, Einaudi Institute, George Washington University, Said Business School at University of Oxford, Smeal College of Business at Pennsylvania State University, Simon Business School at University of Rochester, Sabanci University, Stanford University GSB.


Please send me an email.

[5] Is the revolving door of Washington a back door to government contracts and excess stock market returns? (2018) with Jose Vicente Martinez and Han Özsöylev

The movement of individuals between government positions and private sector employment influences federal government contracting decisions and stock market returns. Firms that will soon hire government officials receive valuable government contracts, beat consensus earnings forecasts, and outperform in the stock market. Managers of these firms can successfully forecast future firm earnings that come as a surprise to equity analysts. These findings support a quid pro quo hypothesis, in that firms hire government officials in exchange for valuable government contracts. We run a battery of robustness checks to mitigate endogeneity concerns and address other possible explanations.


2014 SBS Doctoral Conference (1st Place), 2015 Hakan Orbay Research Award (2nd Place)


2016 American Finance Association Meetings (San Francisco), Said Business School at University of Oxford, Hanken School of Economics (HCCG), Koc University*, Aix-Marseille School of Economics*.

* denotes presentation by co-author

Media mention:

Invited summary article in Columbia Law School's Blue Sky Blog.

* denotes presentation by co-author

Work in Progress:

Macroeconomic sentiment and hedge fund returns with Mustafa Caglayan

How Do AI Technologies Affect Asset Prices? with Roxana Mihet

Revise/Reject & Resubmits:

[1] Country Reputation and Corporate Activity (2021) with Alper Darendeli

We study the link between a previously neglected form of intangible asset—country reputation—and corporate sales. By exploiting variation in nationalities of foreign victims in local terror attacks, we detect unanticipated distortions in reputations of local countries in foreign countries and we pin down reductions in sales of local country firms in foreign markets. The reductions in sales are economically and statistically significant, persistent, and more pronounced after attacks with high levels of foreign media coverage. Local country firms, whose names resemble names from their countries of origin, experience greater deteriorations in their sales. The distortions in country reputations are associated with depreciations in overall firm value, asset growth, and profitability.

Research grant:

Tier-1 Academic Research Fund of S$58,471.45 from the Singapore Ministry of Education.

Media mention:

Reputation Magazine


2018 Finance Day at Koc University, The Thirteenth Conference on Asia-Pacific Financial Markets (CAFM)*, Fourth Annual Volatility Institute at NYU Shanghai (VINS) Conference-“The Financial Implications of Geopolitical Risks”*, MFA 2019 Annual Meeting in Chicago, Finance Down Under 2019*, Eastern Finance Association 2019 Annual Meeting, 2019 INSEAD Marketing Strategy Meets Wall Street Conference, 5th CEIBS Finance and Accounting Symposium*, Oxford Reputation Symposium 2019, SMU/NUS/NTU Accounting Research Conference*, 2019 CMU-PITT-PSU Finance Conference, 2019 China International Conference in Finance (CICF)*, University of Goettingen, 2019 American Accounting Association (AAA) Annual Meeting.

* denotes presentation by co-author


Please see the Appendix.

[2] Knocking Off Firm Value (2020) with Umit Gurun

A central question in intellectual property (IP) literature is whether government intervention helps IP owners enjoy benefits of their trademarked brands, patented inventions or copyrighted works. We contribute to this debate by examining how the U.S. government’s anti-counterfeiting enforcement on foreign countries affects U.S. firms. We present evidence that firms significantly reduce capital and R&D investments when their products are protected from counterfeiting activities. Anti-counterfeiting enforcements are also associated with increases in profit margins and valuations. Using a unique dataset on brand perceptions, we present evidence that anti-counterfeiting enforcements significantly boost brand perceptions of U.S. firms overseas. Out-of-sample tests on non-U.S. brands confirm the benefits of the U.S. government’s anti-counterfeiting enforcements on brand perceptions.

Media mention:

World Trademark Review


The Thirteenth Conference on Asia-Pacific Financial Markets (CAFM), Baylor University*, 2019 American Law and Economics Association (ALEA) Annual Meeting at NYU School of Law, Twelfth Annual Conference on Innovation Economics at Northwestern Pritzker School of Law*.

* denotes presentation by co-author

Paper Discussions:

2019 Eastern Finance Association Meetings: Market Risk Disclosures and Stock Price Crash Risk: Evidence from Textual Analysis (by Shingo Goto, Xin Luo, Zhao Wang)

2019 UTD Finance Conference: Spillover Effects of the Opioid Epidemic on Consumer Finance (by Mark Jansen) Data on border NRC

Research Grants & Awards:

Tier-1 Academic Research Fund of S$58,471.45 from the Singapore Ministry of Education for 2019-2021. (Collaboration with Alper Darendeli)

Active Referee or Reviewer for:

National Science Foundation.

Management Science.

Review of Financial Studies.