Research

"An Explanation of Path Analysis and Recommendations for Best Practice" (with Clive Lennox). Contemporary Accounting Research, 2025.

PowerPoint Slides on Path Analysis.

Data for Slides (Fees1.csv).

Path analysis has become increasingly popular, but many studies do not show a deep understanding of how path analysis works or the assumptions on which it relies. In this paper, we explain that path analysis is statistically equivalent to either ordinary least squares (OLS) when the researcher assumes uncorrelated errors, or instrumental variable estimation (IV) when the researcher allows correlated errors and obtains identification using exclusion restrictions. We then identify two problems with the way path analysis is used. First, studies claim that they use path analysis to provide evidence on the causal process, but they assume away endogeneity by imposing the unrealistic assumption of uncorrelated errors. Second, many studies do not explicitly disclose their key assumptions, including the assumptions of uncorrelated errors or exclusion restrictions. This non-disclosure makes it difficult for a reader to determine whether endogeneity is assumed away or whether the study is attempting to address endogeneity. We conclude with detailed guidance for researchers who are considering whether to use path analysis in their research.

"Activist Investors and Late Filings: The Benefits of Disclosure Violations" (dissertation).

Investors who acquire 5% or more of a firm’s outstanding stock and intend to influence firm control must disclose their position on a Schedule 13D within 10 days of crossing the 5% ownership threshold. Despite this, there is limited SEC enforcement of filing deadlines and over 10% of 13Ds are filed late, representing about $32 billion in investment. I argue that investors file late when the expected benefits outweigh the potential costs. Specifically, I hypothesize that investors delay filing to reduce the price impact of accumulating larger ownership stakes. My evidence is consistent with this prediction, particularly in illiquid stocks where the price impact of share accumulation is likely to be larger. Additionally, I find that late 13D filings harm other market participants by hindering price discovery and increasing information asymmetry relative to timely filings. My findings raise concerns that the SEC’s recently shortened 13D filing window may not improve timeliness, as regulations without meaningful enforcement offer limited investor protection and invite selective noncompliance when the potential benefits of misconduct are high.

"Potential Activism & the Threat of Public Campaigns" (with Lorien Stice-Lawrence and Forester Wong).  Based on 1st-year summer paper.

Internet Appendix.

We explore an important but understudied governance mechanism: the threat of public campaigns. Unlike overt activism or the threat of exit, this strategy allows investors to influence firms without launching costly and confrontational public battles. We focus on investors holding large ownership stakes (blockholders), who have a disproportionate ability to influence firms, and introduce a new method to classify Potentially Activist Stakes based on blockholders’ history of activism. We validate that these stakes appear to carry the threat of public campaigns by showing that they are more likely to turn explicitly activist and involve more in-person interactions with management than non-activist stakes. Firms targeted by these investments exhibit intermediate outcomes in stock returns, executive turnover, and M&A activity that fall between those of non-activist and activist investments. However, these stakes are not simply “activism light.” Investors holding them are more likely to support management in proxy voting than those holding non-activist stakes, suggesting a cooperative approach that contrasts with the adversarial tactics of public activism.

 "Intangible Asset Specificity" (with Richard Sloan).

Kermani and Ma (2023) provide a database of asset-level liquidation recovery rates for non-financial industries. A notable feature of their data is the high average recovery rates for intangible assets, which are comparable to those of fixed assets. Using these rates, Kermani and Ma conclude that rising investment in intangibles has not significantly reduced implied firm-level liquidation values. We revisit their data and computations, showing that their high intangible recovery rates stem from including recoveries for off-balance-sheet assets in the recovery rate numerator (asset liquidation value), while excluding investments in off-balance-sheet assets from the recovery rate denominator (asset book value). After incorporating estimates of investments in off-balance-sheet intangibles in the denominator, we find that intangible recovery rates drop by an order of magnitude, and that rising investment in intangibles has reduced implied firm-level liquidation values. In contrast to Kermani and Ma, our results suggest that most intangible assets have extremely high specificity and that the increasing prevalence of intangibles has reduced firms’ liquidation values.