with Ing-Haw Cheng and Felipe Severino
Review of Financial Studies, Forthcoming

with Shai Bernstein and Timothy McQuade
Journal of Finance, Forthcoming

with Michael Ewens
Journal of Financial Economics, 2020, 135(3): 653-677

with Kelly Shue
Journal of Finance, 2017, 76(6): 2551-2588

with Kelly Shue
(Lead Article) Journal of Financial Economics, 2017, 123(1): 1-21
JFE Jensen Prize for Best Papers in Corporate Finance and Organizations (2nd Prize) 

with Shai Bernstein and Xavier Giroud
Journal of Finance, 2016, 71(4): 1591-1622

Management Science, 2015, 61(11): 2782-2802

Working Papers

with Sabrina Howell, Josh Lerner, and Ramana Nanda

Abstract: Although late-stage venture capital (VC) activity did not change dramatically in the first two months after the COVID-19 pandemic reached the U.S., early-stage VC activity declined by 38%. The particular sensitivity of early-stage VC investment to market conditions--which we show to be common across recessions spanning four decades from 1976 to 2017--raises questions about the pro-cyclicality of VC and its implications for innovation, especially in light of the common narrative that VC is relatively insulated from public markets. We find that the implications for innovation are not benign: innovation conducted by VC-backed firms in recessions is less highly cited, less original, less general, and less closely related to fundamental science. These effects are more pronounced for startups financed by early-stage venture funds. Given the important role that VC plays in financing breakthrough innovations in the economy, our findings have implications for the broader discussion on the nature of innovation across business cycles.

with Kelly Shue
Revise and Resubmit, Journal of Finance
AQR Insight Award (1st Prize)

Abstract: We hypothesize that investors partially think about stock price changes in dollar rather than percentage units, leading to more extreme return responses to news for lower-priced stocks. Consistent with such non-proportional thinking, we find a doubling in price is associated with a 20-30% decline in volatility and beta (controlling for size and liquidity). To identify a causal effect of price, we show that volatility increases sharply following stock splits and drops following reverse splits. Lower-priced stocks also respond more strongly to firm-specific news of the same magnitude. Non-proportional thinking offers a unifying explanation for asset pricing patterns such as the size-volatility/beta relation, the leverage-effect puzzle, and return reversals.

with Joshua D. Gottlieb and Ting Xu
Revise and Resubmit, Review of Financial Studies

Abstract: Do potential entrepreneurs remain in wage employment because of concerns that they will face worse job opportunities should their entrepreneurial ventures fail? Using a Canadian reform that extended job-protected leave to one year for women giving birth after a cutoff date, we study whether the option to return to a previous job increases entrepreneurship. A regression discontinuity design reveals that longer job-protected leave increases entrepreneurship by 1.9 percentage points. These entrepreneurs start incorporated businesses that hire employees—in industries where experimentation before entry has low costs and high benefits. The effects are concentrated among those with more human and financial capital.