We study the capital market effects of information centralization by exploiting the staggered implementation of digital storage and access platforms for regulated financial information (Officially Appointed Mechanisms, or OAMs) in the European Union. We find that the implementation of OAMs results in significant improvements in capital market liquidity, consistent with the notion that OAMs lower investors’ processing costs. The findings are more pronounced when processing costs are high to begin with, that is, when firms (i) are small and receive low business press coverage and (ii) have high levels of retail ownership. We then identify a mechanism through which centralization facilitates capital market effects: information spillovers. First, we find that liquidity improvements are larger when OAMs have features that easily allow investors to search for peer firm information. Second, liquidity improvements are larger for firms with a high share of industry peers operating on the same OAM and for firms with a high share of small, low-coverage peers on that OAM. Third, around the annual report release dates of peer firms, focal-firm liquidity improves and focal-peer stock return synchronicity increases. Overall, our evidence suggests that, even in a modern information age, information centralization improves capital market liquidity and facilitates the acquisition and use of peer firm information.

We study whether banks are riskier if managers have less liability. We focus on New England between 1867 and 1880 and consider the introduction of marital property laws that limited liability for newly wedded bankers. We find that banks with managers who married after a law had higher leverage, delayed loss recognition, made more risky and fraudulent loans, and lost more capital and deposits in the Long Depression of 1873 to 1878. These effects were most pronounced for bankers with the largest reduction in liability. We find no evidence that limiting liability increased firm investment at the county level.

• Winner of Best Paper in Corporate Finance, Annual Financial Management Association Conference (2017) and Society of Financial Studies Cavalcades North America (2018)

• Featured in Vox CEPR Policy Portal, CATO Research Briefs, Stanford Business Insights

I study disclosure choices in job postings and the trade-off between two channels: detailed postings inform and attract optimal job applicants (i.e., a labor market channel) but could also inform competitors in labor and product markets (i.e., a proprietary costs channel). First, I provide evidence consistent with a proprietary costs channel: private firms and redacting firms are less specific in their postings, and postings are more often anonymous in industries with high levels of trade secrecy. Then, I exploit the introduction of federal trade secrecy protections (i.e., the Defend Trade Secrets Act, or DTSA) to assess the trade-off between the two channels. After the implementation of the DTSA, firms demand higher levels of skill in postings for innovative jobs, consistent with trade secrecy protections spurring innovative activities. However, job posting specificity decreases, in line with the proprietary costs channel, as trade secrecy protections are maximized when firms remain opaque regarding innovation. This decrease is attenuated for postings in tight labor markets, which is not only indicative of the importance of specificity in job postings, but also consistent with the proposed trade-off. 

• Recipient of the 2024 American Accounting Association Competitive Manuscript Award

We combine a large-scale field experiment with a customized survey to study whether and how consumers use firm disclosure. In a sample of more than 24,000 U.S. households, we first establish several stylized facts: (i) the average consumer has a moderate preference to purchase from ESG-responsible firms; (ii) consumers typically have no preference for more or less profitable firms; (iii) consumers rarely consult ESG reports and virtually never use financial reports to inform their purchase decisions. In our field experiment, we then inform households about real firm-disclosed profitability and ESG activities through seven randomized information treatments. Consumers increase their purchase intent when exogenously presented with firm-disclosed positive signals about environmental, social, and—to a lesser extent—governance activities. Full ESG reports only have an impact on consumers who choose to view them, whereas financial reports and earnings information do not have an effect. After the experiment, consumers increase their actual product purchases, but these effects are small, short-lived, and only materialize for viewed ESG reports and positive social signals. Through a follow-up survey, we provide explanations for why consumers (do not) change their shopping behavior after our information experiment.

• Featured in Harvard Law School Forum on Corporate Governance and University of Chicago Becker Friedman Institute Insights

Recently, multiple US localities have banned employer access to the pay history of job applicants, limiting the information available to employers. We study the effects of these pay history inquiry bans on employers’ hiring practices at various stages of the hiring process and provide three main findings. First, pay offers in job postings are lower after the implementation of pay history inquiry bans, consistent with employers facing greater information asymmetry, inferring adverse selection in the job applicant pool, and offering lower initial pay. Second, the number of job postings increases, consistent with higher search costs and more intensive searches as a result of the loss of information. Third, we highlight an important trade-off for realized labor market outcomes: while there is a modest closing in gender pay disparity for new hires, the number of new hires declines.

• Cited in Department of Labor "Equal Pay in the United States" Issue Brief