Research

Working Papers

Deterrence and Displacement in Offshore Trade: Evidence from the Panama Papers Leak with Raymond J. Fisman, April M. Knill, and Sergey Mityakov

Abstract: We investigate the impact of the Panama Papers leak on transactions through Offshore Financial Centers (OFCs) using granular international trade data from Ukraine. Trade-based financial transactions through Panama decline by more than 15 percent, indicating substantial deterrence effects from exposure. However, transactions through other OFCs increase, particularly amongst OFCs that are not officially recognized by Ukrainian regulators. This increase does not fully offset the Panama-driven decline, implying an overall drop in the use of OFCs. This decline is driven by private firms’ trade, while offshoring at state-owned enterprises is unaffected, suggesting that concerns over enforcement action may drive our results.

Keywords: Offshore tax havens, tax evasion, Panama Papers, regulatory arbitrage

JEL Codes: G21, G38, H26

Presentations: 2024 West Virginia University, 2024 Eastern Finance Association, 2024 Southwest Finance Association, 2024 Academy of International Business, 2024 FEDSA (The PhD Project) Conference, 2023 Florida Finance Conference

Impact of Local Hostilities on Firm Behavior with Sergey Mityakov

Abstract: We investigate the impact of local level conflict events during the 2014 Russo-Ukrainian war on firm export decisions using Ukrainian international trade data. We find evidence firms significantly increased their export activities in weeks coinciding with nearby war incidents. This effect is most pronounced for firms located within a 25-kilometer radius of conflict zones and diminishes with increased distance from the front lines. Notably the effect seems to be driven by increased financial flows through tax havens and product flows to neighboring countries.

Keywords: War, International trade, Offshore tax havens

Presentations: 2025 PhD Project Baruch College Research Symposium

Research In Progress

Role of Litigation Finance Investment on Case Outcomes with April M. Knill

Abstract: This paper examines the economic implications of third-party litigation finance (TPLF) in the United States. Litigation finance—where an unrelated external party funds a plaintiff’s lawsuit in exchange for a share of the recovery—has increased sharply since 2000. Using multiple data sources, we identify 41 active funders engaged in American federal litigation, highlighting key players, funding structures, and investment sources. Relative to plaintiffs who do not utilize litigation funding, those that do are less likely to settle, more likely to win their cases, and more likely to be awarded larger monetary amounts.

Impact Sociopolitical Stances on Stock Performance with Glades Mckenzie

Abstract: In this paper we explore the impact of firm sociopolitical salience. We collect “woke alerts” from a service that sends emails and texts that “alert consumers about woke behavior” from companies they frequently interact with like Target, Microsoft, Delta, and Google. We find that these notifications alert consumers of ongoing firm behavior rather than new changes in behavior. Despite stale information, initial results suggest that ”woke alerts” precipitate significantly negative stock returns in the following week and significantly lower sales in the following quarter. These results are stronger during periods where the word ”woke” is searched more on Google, providing evidence that the politicization of ”woke” behavior, paired with increased salience of such behavior by individuals averse to these actions, can produce negative outcomes for firms. This study highlights the extreme political polarization of the past decade, connecting such polarization to important firm outcomes.

Stock Reactions to Federal Open Market Committee Appointments with Casey Dougal

Abstract: In this paper, we examine how the appointment of Federal Open Market Committee (FOMC) members with prior business experience affects stock prices. Our results show a positive overall market reaction to the appointment of members with such backgrounds. This effect is more pronounced for firms operating in the same industry as the newly appointed member’s previous employer. We also find a strong positive three-day cumulative abnormal return (CAR) for companies when one of their former employees is appointed to the FOMC.

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