Job Market Paper


1. On the Shoulders of Giants: Financial Spillover in Innovation Network
    With Abhijit Tagade (LSE)

We study how innovation networks among firms cause interdependencies in their stock returns. Using patent grants and citation data from the United States Patent and Trademark Office, we find that patents generate positive abnormal returns not only for the innovating firm but also for firms that previously cited them in their own patents. The magnitude of this financial spillover is directly proportional to the quality of the granted patents and the intensity of a firm's reliance on its upstream firms in the innovation network. The spillover effect is diminished when firms compete in the product market, but it is larger when the firms are also interconnected within the supply chain. Additionally, we find that the financial spillovers of innovation are restricted to firms that are directly connected in the innovation network. We quantify the spillovers and find that innovations generate large positive financial externalities on other firms.

Working Papers


2. Do CEOs Manipulate News? Evidence from Fixed-term Employment Contracts
    With Navid Akbaripour (SSE)

We study the strategic behavior of chief executive officers (CEOs) in disclosing discretionary corporate news close to their contract renewal dates. Analyzing 3,992 fixed-term employment contracts of Standard & Poor's (S&P) 1500 firms covering the period from 2000 to 2009 and using contract lengths as an instrumental variable, we show that the number of discretionary news items increases by 4.8 in the quarter preceding the renewal date and by 2.1 in the two quarters following it. The sentiment of the news items increases by 0.28 in the quarter before the renewal date and decreases by 0.71 in the subsequent two quarters. Hence, there is evidence of strategic disclosure of good news before and clustering of bad news after the contract renewal dates. This behavior is notably stronger for CEOs with a history of poor performance and weaker among older CEOs and those who also hold the position of chairman.

3. Does Stock Expertise Improve Fund Performance?

I investigate the influence of mutual fund managers' learning and experience ontheir portfolio decisions and performance, with a particular focus on the potential of stock familiarity to generate higher alpha. By employing cumulative quarters held as a proxy for experience and accounting for potential confounding factors, My findings reveal that experienced managers consistently produce superior alpha when dealing with familiar stocks. To provide a comprehensive understanding, I introduce a theoretical model that offers a dynamic perspective on manager skill. This framework not only supports my empirical observations but also sheds light on the preference of mutual funds for concentrated portfolios over their well-diversified counterparts.