Publications

13. Financial Disclosure Transparency and Employee Wages, 2022, with John (Jianqiu) Bai and Sarah Shaikh, The Financial Review, forthcoming.

We find evidence consistent with the hypothesis that less transparent financial disclosures are an undesirable firm attribute that increases the amount of information and unemployment risk that employees bear, resulting in a compensating wage differential.

12. Geographic Peer Effects in Management Earnings Forecasts, 2022, with Dawn Matsumoto and Sarah Shaikh, Contemporary Accounting Research 39, 2023-2057.

We show that the likelihood that a firm voluntarily provides an earnings forecast is sensitive to the extent to which other firms in the same geographic area provide earnings forecasts. This peer effect arises in part due to firms trying to avoid negative capital market effects induced by local investors.

11. Blood in the Water: The Value of Antitakeover Provisions During Market Shocks, 2022, with Scott Guernsey and Simone M. Sepe, Journal of Financial Economics 143, 1070-1096.

We show that during negative market-wide shocks, antitakeover provisions preserve firm value by giving boards more bargaining power to fight shock-induced opportunistic bids.

Contains staggered board status for over 14,000 firms (over 120,000 firm-year observations) beginning in 1994.

Media Coverage

Blood in the Water: The Value of Antitakeover Provisions During Market Shocks, January 18, 2022, Harvard Law School Forum on Corporate Governance.

10. Management Practices and Mergers and Acquisitions, 2022, with John (Jianqiu) Bai and Wang Jin, Management Science 68, 2141-2165.

Using a novel dataset of establishment-level management practices from the U.S. Census Bureau, we show that the adoption of more specific, formal, frequent, or explicit (i.e., “structured”) management practices constitute an important source of value creation in mergers and acquisitions.

Media Coverage

- Research: How Management Practices Impact M&A Outcomes, November 2, 2021, Harvard Business Review.
- Managing to Perfection, 2019, Amy Carroll, Private Equity Findings 15, 16-23.
- How M&A Can Lead to Better Management, July 17, 2018, Columbia Law School Blue Sky Blog.

9. Economic Downturns and the Informativeness of Management Earnings Forecasts, 2021, with David Maslar and Sarah Shaikh, Journal of Accounting Research 59, 1481-1520.

Economic downturns are periods of heightened uncertainty that make it harder for market participants to assess a firm's prospects. We show that during downturns, investors and analysts recognize managers’ unique information advantage and perceive management earnings forecasts as more informative.

Replication Data and Code

Media Coverage

Economic Downturns and the Informativeness of Management Earnings Forecasts, October 15, 2021, Columbia Law School Blue Sky Blog.

8. Asset Redeployability and the Choice between Bank Debt and Public Debt, 2020, with Haosi Chen and David Maslar, Journal of Corporate Finance 64, 101678.

Firms with less redeployable assets, which are assets that have fewer alternative uses outside the firm, are more likely to borrow from banks than issue public debt. These findings are consistent with firms with less redeployable assets valuing the ability to renegotiate bank debt contracts instead of selling assets in the event of default.

7. Employment Protection, Investment, and Firm Growth, 2020, with John (Jianqiu) Bai and Douglas Fairhurst, Review of Financial Studies 33, 644-688.

Following the adoption of U.S. state-level labor protection laws that make it harder to fire workers, capital expenditures decrease, resulting in firms growing sales at a slower rate. These findings are consistent with greater employment protection discouraging investment by making projects more irreversible.

Data: Historical Headquarters

Contains hand-collected historical headquarters data going back to 1969 for the near universe of CRSP-Compustat firms (over 100,000 firm-year observations).

Media Coverage

- Research: How Employee Protections Affect Investment and Growth, September 16, 2019, Harvard Business Review.

6. Protection of Trade Secrets and Capital Structure Decisions, 2018, with Sandy Klasa, Hernán Ortiz-Molina, and Shweta Srinivasan, Journal of Financial Economics 128, 266-286.

Following the recognition of the Inevitable Disclosure Doctrine by U.S. state courts, which increase the protection of a firm’s trade secrets by reducing the mobility of its workers who know its secrets to rivals, firms increase leverage relative to unaffected rivals. These results suggest that firms strategically choose more conservative capital structures when they face greater competitive threats stemming from the potential loss of their trade secrets to rivals.

5. CEO Turnovers and Disruptions in Customer-Supplier Relationships, 2017, with Vincent Intintoli and Sarah Shaikh, Journal of Financial and Quantitative Analysis 56, 2565-2610.

We identify the replacement of a customer’s CEO as a disruptive event that results in suppliers losing substantial sales to the customer following the turnover, which significantly weakens their suppliers' financial performance.

4. Firing Costs and Capital Structure Decisions, 2016, Journal of Finance 71, 2239-2286.

Following the adoption of state-level labor protection laws that increase employee firing costs, firms reduce debt ratios, which is consistent with higher firing costs crowding out financial leverage via increasing financial distress costs.

3. Property Crime, Earnings Variability, and the Cost of Capital, 2016, with James Brushwood, Dan Dhaliwal, and Douglas Fairhurst, Journal of Corporate Finance 40, 142-173.

We show that firms located in states where property crime is more prevalent have more uncertain earnings and a higher cost of equity and debt capital, suggesting that a potentially large and overlooked cost of crime is higher financing costs.

2. Customer Concentration Risk and the Cost of Equity Capital, 2016, with Dan Dhaliwal, J. Scott Judd, and Sarah Shaikh, Journal of Accounting and Economics 61, 23-48.

We show that having a more concentrated base of corporate customers increases a supplier’s business risk, which results in a higher cost of equity and debt capital. In contrast, suppliers with a concentrated base of safer government customers have a lower cost of equity.

1. CEO Age and the Riskiness of Corporate Policies, 2014, Journal of Corporate Finance 25, 251-273.

CEO age can have a significant impact on risk-taking behavior and firm performance. Older CEOs tend to engage in less risk-taking behaviors related to investment and financial policies. A trading strategy that goes long in a portfolio of stocks consisting of firms managed by younger CEOs and short in a portfolio of stocks comprised of firms led by older CEOs generates positive risk-adjusted returns.

Best paper award in corporate finance, 2013 Midwest Finance Association Annual Meeting

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