Research
Research
(with Pouyan Foroughi and Lilian Ng)
Forthcoming in the Journal of Business Ethics
Abstract: This study investigates how U.S. power sector firms respond to environmental violations identified by the EPA. Following a violation, affected plants adopt mitigation strategies such as reducing electricity generation, improving fuel quality, lowering coal use, installing scrubbers, upgrading pollution controls, and investing in energy-efficient generators. These actions are supported by economies of scale and public subsidies. At the firm level, violations are associated with increases in assets, capital expenditures, long-term debt, operating revenue, and electricity prices. However, operating and net income remain stable, suggesting that firms pass much of the compliance cost to consumers. While these responses contribute to environmental improvement, the accompanying rise in electricity prices raises concerns about social equity, particularly for households least able to absorb higher energy costs. Overall, the findings highlight a broader ethical and policy dilemma: efforts to enforce environmental accountability may disproportionately burden vulnerable populations.
(with Arshia Farzamfar, Pouyan Foroughi, and Lilian Ng)
Journal of Corporate Finance, Volume 87, Aug 2024
Abstract: Analyzing the complex financial landscape of multi-segment conglomerates requires a more nuanced approach than that required for single-segment firms. This paper reveals that conglomerates strategically enhance their transparency by voluntarily disclosing more information to compensate for their business complexity. This finding is particularly pronounced when there is an increased demand for information from stakeholders and analysts or when the executive pay-performance sensitivity is higher. By strategically embracing transparency, conglomerates transform the complexities inherent in their financial reporting into a catalyst for higher valuation and lower capital costs. Overall, our study demonstrates that multi-segment firms tactically deploy voluntary disclosure to navigate their intricate business environment effectively.
Presented at Northern Finance Association (NFA) PhD Poster Session, Sept. 2023, Financial Management Association (FMA) Doctoral Student Consortium, Oct. 2023, and York University.
Abstract: This paper investigates whether mutual funds exhibit a preference for portfolio companies with which they have shared lobbyists and assesses how this preference impacts their voting behavior. We uncover that institutional shareholders, when aligned with their portfolio companies through a shared lobbying firm, exhibit a higher propensity to vote in concurrence with company management—especially when such votes carry significant managerial value. Following these voting events, we observe negative abnormal returns and a more pronounced impact in firms with entrenched leadership. Overall, our findings indicate that management might strategically leverage shared lobbying relationships to influence shareholder voting patterns.