Research

WORKING PAPERS 

1. Polls, Politics and SBA Disaster Loans, joint with J. Jay Choi, Kose John, and S. Abraham (Avri) Ravid (R&R at Journal of Corporate Finance)

2. Mass Shootings Exposure and Angel Investments with Mathias Awani

3. Mass Shootings and Housing Demand: Evidence from Belief Updating, joint with  Kose John

4. Cultural Hypocrisy and Enforcement Severity: Evidence from Corporate Misconduct Fines, joint with  Kose John 

5.  Financial Flexibility in the Gig Economy: The Impact of Ridesharing on Mortgage Loan Terms, solo-authored 

6.  Sexual Harassment Severity and Board Gender Diversity: Evidence from Federal District Courts,  joint with Stefano Bonini and Kose John

7. Labor representation, management, leverage, and employee outcomes, joint with Kose John and S. Abraham (Avri) Ravid

8. The effect of the repeal of the SALT deduction on the sale price of properties, solo authored

PUBLICATIONS

1. Retail motor gasoline prices and the interest rate on mortgage loans, European Financial Management, 2024, solo-authored (Impact Factor: 3.1) -> Podcast

• What is the causal relationship between the retail price of motor gasoline and the interest rate on mortgage loans?

• How do government policies designed to promote alternative fuels affect this relationship?

• What are the moderating effects of different transportation modes on the relationship between gasoline prices and mortgage interest rates?

Abstract: A significant negative relationship exists between the price of retail motor gasoline and the interest rate on mortgage loans. Prospective homeowners avoid purchasing a mortgage-financed home in areas where gasoline prices are rising to avoid endangering their future mortgage payments due to the greater cost of motor fuel consumption. The passage of government regulations and incentives aimed at increasing either the demand for or supply of alternative fuels, lowering the cost for gasoline customers to switch to alternative fuels, lessens the negative impact of gasoline prices on the cost of mortgage credit. Public transit mitigates the negative gasoline price impact. 

2. Firm Leverage and Employee Pay: The Moderating Role of CEO Leadership Style, 2024, joint with J. Jay Choi and Kose John, International Review of Financial Analysis, (Impact Factor: 9.8) -> Podcast

• How do different CEO leadership styles impact the relationship between firm leverage and average employee pay?

• What are the key arguments for and against the ‘debt disciplinary’ and ‘employment security’ hypotheses regarding leverage and employee pay?

• How do firm-specific and country-specific factors, beyond CEO leadership styles, influence the relationship between leverage and employee pay?

Abstract: We investigate how a CEO's leadership style moderates the relationship between leverage and average employee pay. We first show that the relationship between leverage and average employee pay is negative, consistent with the leverage disciplinary hypothesis. Next, we examine how CEO leadership style moderates this negative effect. We find that CEOs with more charisma reduce the disciplinary effect of leverage. The humane CEOs of companies with more debt sharpen the disciplinary effect by paying their employees less for increased risk of job loss that comes with high leverage. An important policy implication is that CEO leadership style can influence the outcome of labor management negotiations regarding employee pay.

3. COVID-19 mortality risk premium and the interest rate on mortgage loans. International Review of Financial Analysis, 2024, solo-authored (Impact Factor: 9.8) -> Podcast

• How did the COVID-19 pandemic impact mortgage interest rates in the US?

• What mechanisms explain the relationship between COVID-19 fatality rates and mortgage interest rates?

• Did public health policies influence the COVID-19 mortality risk premium on mortgage loans?

Abstract: I investigate the impact of COVID-19 on the housing market, with a focus on mortgage interest rates. Rising COVID-19 fatalities result in higher mortgage interest rates. I use the Gaussian Copula approach to establish causality between COVID-19 fatalities and mortgage interest rates. Finally, I present a thorough examination of the mechanisms by which COVID-19 fatalities influence mortgage interest rates. The health concern channel is the most important. Banks raise the interest rate because they are concerned about the borrower's health or potential death. Lower interest rates for borrowers who alleviated this type of worry from banks by purchasing mortgage insurance. 

4. Natural Disasters, Public Attention and Changes in Capital Structure: International Evidence, Annals of Finance, 2024, solo-authored -> Podcast

   • What is the relationship between public attention to local natural disasters and the likelihood of affected firms using external financing? 

   • How does the type of online information source used by the public affect the relationship between public attention to a natural disaster and the likelihood of firms using external financing?

   • What is the impact of public attention on the relationship between natural disaster intensity and the likelihood of smaller firms using external financing?

Abstract: In this study, I examine whether public attention to a natural disaster affects the likelihood of firms using external financing (only debt, only equity, or a mix of debt and equity) following the disaster. The helpful (or harmful) view of public attention predicts that increasing public attention to the disaster can help companies to use (or hinder them from using) external financing following the disaster. For this investigation, I construct two indices: (1) an index of public attention to natural disasters and (2) an index of natural disaster intensity. Consistent with the prediction of the helpful view, the likelihood of using a combination of debt and equity financing in the aftermath of a severe disaster is higher when people pay more attention to it. By contrast, when people pay less attention to severe disasters, firms are more likely to use only debt or equity financing, which confirms the harmful view. I provide evidence that the moderating effect of public attention on the relationship between the likelihood of using external financing and natural disaster intensity varies across types of natural disasters and types of online information sources (websites, online news, images, and YouTube videos). Furthermore, smaller firms that often face difficulties obtaining external financing are more likely to benefit from increased public attention to disasters when they want to use only debt financing and less likely to benefit when using equity financing. Finally, I provide evidence that the substitution of internal funding sources for external sources in the aftermath of a disaster depends on the level of public attention to the disaster.

5. Health uninsurance premium and mortgage interest rates. International Review of Financial Analysis, 2023, solo-authored (Impact Factor: 9.8) -> Podcast 

•  How does the percentage of uninsured individuals in an area affect mortgage interest rates?

•  What factors besides health insurance status influence the interest rate charged on a mortgage?

• How does the Patient Protection and Affordable Care Act impact the relationship between health insurance status and mortgage interest rates?

Abstract: I show that lenders charge higher interest rates on mortgage-financed houses in areas with a higher rate of health uninsurance to protect themselves against a potential future bankruptcy of the borrower caused by health uninsurance. The health uninsurance premium is higher for applicants who are more likely to file for bankruptcy and for mortgage-financed houses in areas where there are greater benefits to obtaining insurance or where there is a higher percentage of uninsured people who cannot afford insurance. The premium is lower following the implementation of the requirement to have qualifying health insurance coverage under the Affordable Care Act.