Assistant Professor of Finance
UCLA Anderson School of Management
william [dot] mann [at] anderson [dot] ucla [dot] edu

Google Scholar often links to outdated paper versions.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

I am an assistant professor of finance at the UCLA Anderson Graduate 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

accepted at the Journal of Financial Economics
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

Intangible assets, innovation, and entrepreneurial finance

upcoming presentations: University of Kentucky Finance Conference, Arison School of Business (IDC) Finance Conference. Recent presentations: Midwest Finance Association, U of Maryland junior finance conference

We show that the relationship between aggregate investment and Tobin’s q has become remarkably tight in recent years, contrasting with earlier eras. We attribute this change to the growing empirical dispersion in Tobin’s q, which we document in both in the cross-section and the time-series. To study the source of this dispersion, we augment a standard investment model with learning. Information acquisition endogenously amplifies 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 lower level of tangible capital. We confirm the model’s predictions in the data, and disentangle our mechanism from measurement error in q.

upcoming presentations:  London Business School Private Equity Symposium. Recent presentations: FMA Napa Conference.

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.”

Initial coin offerings and platform building (with Jiasun Li)
Recent presentations: ASU Sonoran Conference, Southern California Private Equity Conference, FSU Suntrust Conference, Eastern Finance Association.

In an initial coin offering (ICO), a company (or an open-source project) raises funds by pre-selling access to a later product or service. We present a model that rationalizes the use of ICOs for launching peer-to-peer platforms: by adding dynamics to a platform launch, ICOs can 1) solve a coordination failure inherent in many platforms with network effects; and 2) harness the “wisdom of the crowd” by aggregating dispersed information about platform quality. Through either mechanism, an ICO increases platform value, makes the launch of a valuable platform more likely, and thus increases social welfare. We use our model to provide guidance to regulators: We analyze under what circumstances ICOs should be banned or allowed, and discuss governance mechanisms that they should include.

Other topics in finance

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

revise and resubmit at Review of Financial Studies

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.

new draft coming soon with additional data and results

We provide causal evidence that discount rate changes by the Federal Reserve affected 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. The mechanism for the Fed’s effect on agriculture was a bank credit channel, operating independently of any deflationary effect on money supply. Our findings suggest that the Fed deliberately managed transitory shocks during 1920-1921, mitigating debt burdens with which farms would struggle in 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.