Research

Work on Policing and Crime

The Effect of Police Response Time on Crime Detection (with Jordi Blanes i Vidal)

Review of Economic Studies, Volume 85, Issue 2, 1 April 2018, Pages 855–891.We study whether faster police response times help to combat crime by increasing the likelihood of an arrest. To identify causal effects, we exploit discontinuities in distance to the response station across locations next to each other, but on different sides of division boundaries. We find that faster response times lead to a large increase in the likelihood of detecting (i.e. 'clearing') crimes. The effects are stronger for higher priority calls. Part of the mechanism is the higher likelihood that a suspect will be named by a victim or witness when the police attend the scene more promptly.

Prices, Policing and Policy: The Dynamics of Crime Booms and Busts (with Steve Machin, Matteo Sandi and Rob Witt)

Journal of the European Economic Association: Forthcoming.In many historical episodes, the extent of criminal activity has displayed booms and busts. One very clear example is the case of metal crime, where in the face of big increases in value driven by world commodity prices, the incidence of metal thefts in the UK (and elsewhere) rose very sharply in the 2000s. Early in the current decade, they fell sharply again. This paper studies the roles of prices, policing and policy in explaining these crime dynamics. The empirical analysis shows sizeable and significant metal crime-price elasticities, in line with the idea that changing economic returns do shape crime. However, the rapid upward and downward trends are not only due to price changes. Their temporal evolution is also explained by changes in policing and policy. On the former, a difference-in-differences approach is used to document an important role of policing as a consequence of an anti-metal crime operation introduced in 2012. On the latter, the introduction of the Scrap Metal Dealers Act 2013 is exploited to study the impact of policy on the economic activity of scrap metal dealers in England and Wales. Results from our difference-in-differences specification suggest that the tougher regulatory system introduced by the policy hindered the economic activity of pre-existing dealers, reflecting the reduced market size for potential metal criminals to sell what they have stolen.

Face-to-Face Communication in Organisations (with Diego Battiston and Jordi Blanes i Vidal)

Review of Economic Studies - R&RCommunication is integral to organisations, and yet field evidence on the relation between communication and worker productivity remains scarce. We argue that a core role of communication is to transmit information that helps co-workers do their job better. We build a simple model in which the optimal amount of communication trades-off this benefit against the time cost incurred by the sender, and use it to derive a set of empirical predictions. We then exploit a natural experiment in an organisation where problems arrive and must be sequentially dealt with by two workers. For exogenous reasons, the first worker can sometimes communicate face-to-face with their colleague. Consistently with the predictions of our model we find that: (a) the second worker works faster (at the cost of the first worker having less time to deal with incoming problems) when face-to-face communication is possible, (b) this effect is stronger when the second worker is inherently slower, busier, and dealing with more urgent tasks, and (c) the effect is also stronger for teams that are more homogenous and located closer to each other. Our findings illustrate how workers in teams adjust the amount of mutual communication to its costs and benefits.

Jihadi Attacks, Media and Local Hate Crime (with Ria Ivandic and Steve Machin)

CEP Discussion Paper No. 1615; CEPR Discussion Paper No. DP13743; VoxEmpirical connections between local anti-Muslim hate crimes and international jihadi terror attacks are studied. Based upon rich administrative data from Greater Manchester Police, event studies of ten terror attacks reveal an immediate big spike up in Islamophobic hate crimes and incidents when an attack occurs. In subsequent days, hate crime is amplified by real-time media. It subsequently attenuates, but hate crime incidence cumulates to higher levels than prior to the series of attacks. The overall conclusion is that, even when they reside in places far away from where jihadi terror attacks take place, local Muslim populations face a media magnified likelihood of hate crime victimization following international terror attacks. This matters for community cohesion in places affected by discriminatory hate crime and, from both a policy and research perspective, means that the process of media magnification of hate crime needs to be better understood.

Gangs, Drugs, and Murders (with Steve Machin and Carmen Villa Llera)

In this short paper we focus on gaining insights into the current homicides wave in London. Our key findings are, first, the infection point for the increase in murders occurred in mid-2016, hence much later than generally discussed. Second, the MPS's own Public Attitudes Survey is a very good lead indicator for the spatial distribution of murders in London the following year. This is, when listening to the responses of young black people who consider knife crime a major issue in the area. Third, there appears to be a structural break in 2016 - hence around the time of the inflection point - when gang activity in a London ward explains murders more strongly than in previous years. Finally, gangs appear to operate in areas with higher unemployment and high population density. Furthermore, higher median house prices correlate positively with gang activity, possibly because of contested markets for drugs. All of our analyses are based on publicly available data.

Domestic Abuse: What Do We Know About It? (with Jordi Blanes i Vidal and Lukas Bolte)

In this policy paper we are trying to give an overview of patterns and determinants of Domestic Abuse, and influencing factors like weather, football, and a variety of other temporal and spatial dimensions. We find that temporally domestic abuse is higher from Friday to Sunday, and that certain events increase the number of domestic abuses such as New Year’s Eve or Football. The weather plays an important influencing factor, with high temperatures being related with higher quantities of domestic abuse cases, while rain decreases it. Football increases domestic abuse in total, but also for groups higher up the social strata. We also observe the effect of socio-economic factors such as income, race, religion and education and see how each one affects differently the domestic abuses.

Opinion Piece: The Anti-Money Laundering Process is Broken

Case Study: The Danske Bank Money Laundering Scandal: A Case Study

Work on Corporate Boards

Women on Boards in Finance and STEM Industries (with Renee Adams)

The American Economic Review 106 (5), 277-281 (P&P). Featured on the Harvard Law School Blog.We document that women are less represented on corporate boards in Finance and more traditional STEM industry sectors. Even after controlling for differences in firm and country characteristics, average diversity in these sectors is 24% lower than the mean. Our findings suggest that well-documented gender differences in STEM university enrolments and occupations have long-term consequences for female business leadership. The leadership gap in Finance and STEM may be difficult to eliminate using blanket boardroom diversity policies. Diversity policies are also likely to have a different impact on firms in these sectors than in non-STEM sectors.

Women in Finance (with Renee Adams)

Featured on the Oxford Business Law Blog Across countries, banks have less gender diverse boards than other firms. Bank board diversity is particularly low in countries with greater gender gaps in PISA math scores and lower average math scores. We find similar results using state-level NAEP math scores in the United States. The influence of math scores appears to transcend standard cultural explanations. Female directors are more likely to have an MBA in banks, especially in countries with greater gender gaps in math scores. Our evidence suggests that differences in educational outcomes for boys and girls may have long-lasting implications for their career development.

Barriers to Boardrooms (with Renee Adams)

Boardroom diversity policies link societal and corporate governance objectives. To understand whether they can meet both objectives, we argue one must understand why female directors are relatively underrepresented. We document that boardroom diversity is lower than most surveys suggest. We then show that across countries and US states there are more women in the director pool when more women work full time. However, working full-time may not be sufficient for women to make it to the top because of economic and cultural barriers. Our evidence suggests current boardroom diversity policies may be less effective when barriers to boardrooms are bigger.

The Inner Workings of the Board: Evidence from Emerging Markets (with Ralph De Haas and Daniel Ferreira)

Emerging Markets Review: forthcoming. Featured on the Oxford Business Law BlogWe survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors’ perceptions about the local legal environment. Further analysis indicates that directors who feel adequately empowered by local legislation are less likely to actively vote against board proposals. They also form boards that play a stronger role in the company’s strategic decision making. This suggests that a supportive legal environment allows directors to focus more on their advisory as opposed to their monitoring role.

Corporate Boards in Europe: Size, Independence and Gender Diversity (with Daniel Ferreira)

This book chapter provides a comprehensive description of the cross-section of board characteristics across Europe. We use data from more than 2,000 companies from 28 European countries in 2010 to relate the cross-sectional distribution of board characteristics to country, industry and firm characteristics. Our analysis focuses mainly on three board characteristics: board size, independence and gender diversity. We find that country characteristics explain a significant part of the variation in board independence and gender diversity, which suggests that country-level governance rules play an important role in the determination of these variables. In contrast, board size is mostly explained by firm and industry characteristics. Board size and board independence have decreased more in those firms that performed poorly in the recent financial crisis.

Work on Law and Finance

Measuring Management Insulation from Shareholder Pressure (with Daniel Ferreira, David Kershaw and Edmund Schuster)

Journal of Financial Intermediation - R&R We propose a management insulation measure based on charter, bylaw, and corporate law provisions that make it difficult for shareholders to oust a firm’s management. Unlike the existing alternatives, our measure considers the interactions between different provisions. We illustrate the usefulness of our measure with an application to the banking industry. We find that banks in which managers were more insulated from shareholders in 2003 were significantly less likely to be bailed out in 2008/09. These banks were also less likely to be targeted by activist shareholders, as proxied by 13D SEC filings. By contrast, popular alternative measures of insulation -- such as staggered boards and the Entrenchment Index - fail to predict both bailouts and shareholder activism.

Say on Pay: Do Shareholders Care? (with Carsten Gerner-Beuerle)

A video of us discussing the paper can be found here. Featured on the LSE Business Review Blog, and the Harvard Law School Blog.This paper examines the impact of enhanced executive remuneration disclosure rules and the introduction of dual voting rights under UK regulations of 2013 on the voting patterns of shareholders. Based on a hand-collected dataset of the pay information disclosed by FTSE 350 companies from 2013-2017, we establish that shareholders guide their vote by top line salary figures and the recommendations of proxy advisors. We do not find any evidence that they assess the structure of a company’s remuneration policy comprehensively or penalise badly structured policies with their binding policy vote. Our results challenge the merits of imposing additional reporting costs on firms and introducing complex say on pay regulations.

Work in Progress

  • Payday Lending and Crime (with Ulf Axelson and Daniel Paravisini)
  • Productivity in the Open Plan Workplace (with Diego Battiston, Jordi Blanes i Vidal and Kati Szemeredi)
  • Female Underrepresentation in STEM&F Firms (with Renee Adams)