Email: andrew.schwartz@shu.edu

Address: 

400 South Orange Ave

South Orange, NJ 07079

Judicial Philosophy and Corporate Investment in the United States 

As the final arbiter of disputes, courts have the potential to significantly impact the fortunes of firms. Using the relationship between corporate investment and federal court composition, I find that firms have strong preferences for the composition of the judiciary along two dimensions. First, firms invest more in jurisdictions with more Republican-appointed judges. Second, firm invest less as judicial uncertainty increases (i.e. the ratio between Republican-appointed and Democratic-appointed judges approaches an even split). To address potential endogenity, I look at changes in corporate investment following the death of sitting federal appellate court judges. I find that corporations significantly reduce their investment when a Republican-appointed judge dies and is replaced by a Democratic-appointed judge. The reverse, however, does not predict a change investment.

Precautionary Student Borrowing: Hometown Unemployment and Student Loans (with Zachary Bleemer)

We present a novel partial explanation for the sixfold increase in student borrowing since 2002: precautionary borrowing. Using a stylized model, we show that annual federal loan limits can induce students whose families face unemployment risk to borrow more today. We then use a proprietary dataset of internal student  financial aid records from a large US public university to test our theory of precautionary borrowing. These records allow us to track students over time and control for student  fixed effects. We  find that a 1 standard deviation increase in local unemployment rates corresponds to a 6.3% increase in the amount borrowed. A back-of-the-envelope calculation suggests that precautionary borrowing explains 14% of all student borrowing since 2002.

Trickle-Down Overconfidence: The Impact of Customer Overconfidence on Supplier Firms  (with Aaron Nelson)

Prior research has shown that suppliers are riskier and increase relationship-specific investment when paired with an overconfident customer. In this paper, we provide evidence that increased investment is driven by suppliers rationally reacting to an expected increase in demand from overconfident customers rather than overconfidence spilling over. The effect of customer overconfidence on supplier relationship-specific investment is attenuated when the customer firm exhibits high levels of riskiness or when market risk aversion is high. Further, we find no evidence that the suppliers become overconfident themselves. Taken together, these results suggest that suppliers are aware of their customer's biases and the associated risks, but choose to invest in the relationship so long as the risk is acceptable.

Stocking Up on Gifts: The Influence of Gender on Stock Gifts and Wealth (with Jennifer Itzkowitz & Jesse Itzkowitz)

Using recent data from an American app-based consumer stock brokerage, we provide novel evidence about how to overcome gender differences in stock market participation. We show that fewer women than men are encouraged to participate in the stock market. However, following equal encouragement to enter the stock market, roughly the same proportion of men and women continue to participate. We use the stock gift cards, a quantifiable measure of behavior, as a proxy for encouragement to enter the stock market. We find that even among children too young to express an interest in finance, boys receive more stock gift cards than girls. The stock gift gender gap is larger in communities with greater gender inequity. The results are best explained by gender norms which create the perception that men are more interested in finance than women.  

CEO Hometown Political Influences and Corporate Investment

This paper explores how CEOs form attitudes regarding the political environment. Alignment between the political leanings of the CEO's birthplace and the current president predict higher investment-cash flow sensitivities. This increase is driven by CEOs raised during strong economic times and not by personal political beliefs. Consistent with existing models on attitudes and investment-cash flow sensitivities, the increase in investment-cash flow sensitivities implies CEOs develop positive beliefs on the political environment based on the political beliefs of their hometown.  These results show that CEOs' early experiences have a significant impact on belief formation with implications for firm behavior.

University of California, Berkeley

PhD in Finance (2018)

• Dissertation: Essays in Social Finance

• Dissertation Committee: Brett Green (Chair), Ulrike Malmendier, Christine Parlour, Philipp Strack

University of North Carolina at Chapel Hill

BSBA in Business Administration & Mathematical Decision Sciences (2011)

• Honors Thesis: Efficiency of the American Single Stock Futures Market: A Cost of Carry Analysis

• Thesis Advisor: Christopher Parsons