Assistant Professor of Finance
william [dot] mann [at] anderson [dot] ucla [dot] edu

Google Scholar often links to outdated paper versions. For the latest versions, please use the links below. 

I am an assistant professor of finance at the UCLA Anderson School of Management. My research is mostly empirical and focuses on issues in corporate finance and household finance, especially the value of intangible assets and the real effects of collateral constraints. I teach corporate finance in the MBA and FEMBA programs at UCLA, and I teach empirical corporate finance research and methods in the PhD program. I earned my PhD from the Wharton School in 2014.

Published or accepted papers

Journal of Financial Economics, 2018
Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, 2014
Olin Finance Ph.D. Dissertation Award in honor of Professor Stuart I. Greenbaum, 2013

I show that patents are pledged as collateral to raise significant debt financing, and that the pledgeability of patents contributes to the financing of innovation. In 2013, 38% of US patenting firms had pledged their patents as collateral at some point, and these firms performed 20% of R&D and patenting in Compustat. Employing court decisions as a source of exogenous variation in creditor rights, I show that patenting companies raised more debt, and spent more on R&D, when creditor rights to patents strengthened. Subsequently, these companies exhibited a gradual increase in patenting output and the use of patents as collateral.

Most research on firm financing studies debt versus equity issuance. We model an alternative source -- non-core asset sales -- and identify three new factors that contrast it with equity. First, unlike asset purchasers, equity investors own a claim to the firm's balance sheet (the "balance sheet effect"). This includes the new financing raised, mitigating information asymmetry. Contrary to the intuition of Myers and Majluf (1984), even if non-core assets exhibit less information asymmetry, the firm issues equity if the financing need is high. Second, firms can disguise the sale of low-quality assets -- but not equity -- as motivated by dissynergies (the "camouflage effect"). Third, selling equity implies a "lemons" discount for not only the equity issued but also the rest of the firm, since both are perfectly correlated (the "correlation effect"). A discount on assets need not reduce the stock price, since assets are not a carbon copy of the firm.

Working papers and papers under review

revise and resubmit at the Journal of Financial Economics

We show that the relationship between aggregate investment and Tobin’s q has become remarkably tight in recent years, contrasting with earlier times. We connect this change with the growing empirical dispersion in Tobin’s q, which we document both in the cross-section and the time-series. To study the source of this dispersion, we augment a standard investment model with two distinct mechanisms related to firms’ research activities: innovations and learning. Both innovation jumps in cash flows and the frequent updating of beliefs about future cash flows endogenously amplify volatility in the firm’s value function. Perhaps counterintuitively, the investment-q regression works better for research-intensive industries, a growing segment of the economy, despite their greater stock of intangible assets. We confirm the model’s predictions in the data, and we disentangle the results from measurement error in q.

We estimate small marginal costs and large markups at private colleges in the United States, and discuss implications for the design of financial aid. For identification, we exploit a tightening of credit standards in the PLUS loan program, which decreased enrollment, revenues, and expenditures at private colleges with low-income students. We estimate that markups represented more than half of charges for students disqualified by the change. Markups were higher at for-profit schools, and in states with fewer public schools and lower education spending. Our results complement prior evidence on the Bennett Hypothesis, and contrast prior estimates of small markups.

Collateral Constraints, Wealth Effects, and Volatility: Evidence from Real Estate Markets (with Barney Hartman-Glaser)
revise and resubmit at the Review of Finance

We find that housing return volatility is negatively correlated with income at the zip-code level. We rationalize this finding with a model featuring a collateral constraint that translates income volatility to housing return volatility. Collateral constraints are tighter for lower-income areas, causing higher housing return volatility. We validate this mechanism using variation in wealth induced by lagged housing returns, using cross-sectional data on the housing expenditure share, and using state-level non-recourse status to instrument for collateral constraints. Consistent with our model, housing return volatility is negatively correlated with lagged returns, positively correlated with expenditure share, and higher in non-recourse states.

under review
In a typical initial coin offering (ICO), an entrepreneur pre-sells digital tokens which will later serve as the medium of exchange on a peer-to-peer platform. We present a model rationalizing ICOs for launching such platforms: by transparently distributing tokens before the platform operation begins, an ICO overcomes later coordination failures between transaction counterparties induced by a cross-side network effect. In addition, we rationalize several empirical features of the ICO structure in the presence of a critical mass requirement imposed by a same-side network effect. Our model provides guidance for both regulators and practitioners to discern which ICOs are economically valuable.

New evidence on venture loans (with Juanita González-Uribe)

We show that venture debt, a growing segment of venture capital, confers flexibility in the timing of equity raising. In the Preqin database, we show that venture debt constitutes 15% of total venture capital since 2010, most of it coming between the Series A and D rounds. Using novel contract-level data on venture loans, we further show that debt is repaid quickly out of subsequent equity rounds; that default is rare, while prepayment risk is large; and that intellectual property collateral and warrant coverage are prevalent features. We present a model in which venture debt avoids dilution and “extends the runway.”

The Real Effects of Fed Intervention: Revisiting the 1920-1921 Depression (with Bruce Carlin)

To study how monetary policy affects the real economy, we re-evaluate the events surrounding the 1920-1921 U.S. depression. We provide causal evidence that discount rate changes by the Federal Reserve significantly affected lending and economic output in the 1920s. Our identification strategy exploits county-level variation in access to the Fed’s discount window, and we implement this strategy with hand-collected data on banking and agriculture in Illinois in the early 20th century. Intervention by the Fed during this time temporarily lowered agricultural output, but caused debt-to-output levels to be persistently lower, lasting into the years leading to the Great Depression.

Work in progress

Monitoring, intangibles, and growth (with Henry Friedman)
       We document that monitoring has a stronger association with value-added in industries with greater intensity of intangible assets.

UCLA teaching

Corporate Finance (MGMT 430) - MBA, FEMBA, and FEMBA flex programs - syllabus
Textbook: Corporate Finance (Prentice Hall) by Jonathan Berk and Peter DeMarzo, 4th edition.
This course covers the various methods by which corporations raise capital from investors, and how these decisions interact with the valuation and selection of investment opportunities. We develop valuation methods based on multiples, discounted cash flows, and real options. We also discuss facts and theory related to capital structure, mergers and acquisitions, and public offerings.

Empirical Corporate Finance (MGMTPHD 254) - PhD program, every other spring quarter - syllabus
This course familiarizes students with some of the major areas of ongoing research in empirical corporate finance, and with methodological issues in empirical research.