Research

Working paper

Political Attitudes and Equity Market Reactions to Vaccine Mandate Bans, with Mike Cooper, Tim Liu, and Yihui Pan

Selected Presentations: Chinese University of Hong Kong, Hongkong University, Hong Kong University of Science and Technology, Northeastern University, University of New South Wales, University of Sydney, University of Technology Sydney, MFA 2024 (scheduled), FMA 2023, Wasatch Finance Conference 2023

Abstract: In 2021, many firms began considering and implementing vaccine mandates as a means to return workers to in-person work. In response, twelve states enacted laws banning employer COVID-19 vaccine mandates. We study equity market reactions to these bans and find a 0.64% increase in abnormal returns to affected firms around law passage, compared to unaffected firms. The positive market reaction concentrates on firms with a Republican workforce, especially if they face tight local labor markets or have Democratic leadership, while firms with a Democratic workforce experience mildly negative market reactions. Establishments impacted by vaccine mandate bans experience greater employment growth after the passage of the bans compared to unaffected establishments within the same firm, an effect similarly concentrated in firms with a Republican workforce. Overall, our findings highlight the importance of workers’ non-monetary preferences on labor-related outcomes and suggest that regulations aligned with workers’ preferences may ameliorate labor adjustment costs to the benefit of firm value.

Carbon Emissions Under Political Uncertainty (Job Market Paper) (draft available upon request)

How Does the Stock Market Value Workplace Gender Equality? Evidence from #MeToo Laws, with Yawen Jiao (draft available upon request)

Selected Presentations: Chinese University of Hong Kong, Shenzhen, Kobe University, and University of Utah 

Abstract: The #MeToo movement has brought to light the issue of workplace harassment and misconduct, leading to the reform of workplace anti-harassment laws in many U.S. states. We document a strong and positive equity market reaction to the passage of #MeToo bills that reverse within 90 days. Firms with higher sexual harassment rates, employing more women, having more female directors, or are located in more Democratic-leaning areas experience less positive market reactions. Operating performance and employee productivity declined after the passage of the law. Firms also hire fewer young women and more young men. Our findings suggest that investors misestimate the costs imposed on firms by gender equality legislation and its impact on firms’ operations.

Stock Splits are Not Dead: Implications of Reappearing Stock Splits , with Peter Chung and Liu Yun (draft available upon request)

Presented at: University of Utah 

Abstract: We document that stock splits have not disappeared but are recently reappearing. This paper posits that firms in recent years, in particular, have been splitting their stocks to attract attention from investors and customers. We show that stock liquidity significantly goes up while the firm’s sales grow significantly after the stock split. Interestingly, smaller and less institutionally-owned firms benefit more from the positive liquidity effect and sales growth effect while large and more institutionally-owned firms attract more retail investors’ trading. Such heterogeneous effects of stock splits are more pronounced for more recent samples. Finally, the abnormal stock return around the announcement and during the quarters after the split are significantly positive, but more positive for smaller and less institutionally-owned firms.

Work in Progress

Does Innovation Affect Stock Migration (with Mike Cooper, Pengfei Sui, and Wenhao Yang)

The Real Effects of Anti-ESG Laws (with Mike Cooper, Jixing Li, and Bharat Parajuli)

Financial Advisor and Initial Public Offerings (with Peter Chung and Shana Hong)