The literature on recovery and creative destruction has analyzed the effects of large events like natural hazards or financial crises. However, large shocks induce significant general equilibrium effects that influence the recovery process of each individual firm. We complement the literature by studying how firms adjust to idiosyncratic shocks in an economy that is in equilibrium. We use a unique data set on the insurance purchases and insurance claims of 22,000 Swedish firms. Because insurance claims are unexpected and exogenous to productivity, we can identify the effect of shocks to physical assets. We find that firms who experience a loss of capital grow slower and this effect is particularly pronounced among firms with low credit scores. We conclude that firms do not fully insure and access to capital markets remains an important factor for risk management.

Seeding in tournaments is a process of creating a schedule based on performance in the recent past. It is used in many athletic disciplines to ensure that particularly attractive match ups do not occur until the later stages of the tournament. We exploit the discontinuous nature of the seeding system in the UEFA Champions League and the UEFA Europa League as a natural experiment to estimate the causal effect of being seeded. We find no evidence that seeding itself contributes positively to the team's success in the tournament. This finding is surprising given the substantial drop in average strength of the opponents for seeded teams and in striking opposition to the findings of previous studies.

In this article, we study the local political mobilization effects of political protests in the context of the Black Lives Matter movement. We analyze monthly voter registration data from 2136 US counties across 32 states in a two-way fixed-effects framework with a matched control group. Our main results show that counties that experienced a BLM protest did not see an increase in voter registrations. Furthermore, we find no evidence that the effect differs across voters that register as Democrats or Republicans, but we can rule out meaningful reductions in the voter registrations for both major parties. We hypothesise that the scope of the protest and the extensive news coverage have reduced the importance of experiencing a protest firsthand.

The partisan shift of the US South in the 1960s coincided with a spike in radio stations airing right-wing broadcasting, which promoted a strong anti-communist agenda and targeted a growing Southern middle-class. We test whether these programs worked as a catalyst to turn the US South from Democratic to Republican. Using archived radio station lists, we exploit the timing of introduction of conservative talk radio on local stations. We find a significant effect on the Republican vote share in congressional elections after the introduction. However, this effect is small and almost exclusively driven by an increased voter turnout. Our results are consistent with the theory that conservative talk radio increased the Republican voter base, rather than converting racially conservative Democratic voters.

While managing risks is central for all firms, it is of particular importance for smaller and medium size firms. Large firms are naturally diversified and they have access to financial markets, which allows them to smooth out shocks. Compared to large firms, the risk management strategies of small and medium-sized firms is mostly unknown, due to the lack of data. We use a unique data set on firms' insurance purchases, combined with administrative tax data to document risk management behavior in a large, representative panel of Swedish firms. We find that credit constrained firms purchase more insurance relative to assets in the cross-section and panel analysis, which is consistent with the empirical literature. However, this relationship breaks down if we use a clean regression-discontinuity design to isolate credit constraints from other confounding variables. We conjecture that this finding is due to the fact that our causal estimate comes from financially stable firms, that already have efficient risk management in place.

The idea that cash holdings allow firms to reduce transaction costs in the event of an unanticipated liquidity shortfall goes back to Keynes. However, transaction costs are difficult to measure and usually have to be substituted by crude proxies, such as firm size. As a consequence, transaction cost motives cannot be separated from other factors that vary with these proxies. I leverage a unique dataset on the credit ratings of Swedish SME to obtain a measure of credit constraints that is highly predictive of the amount of debt firms hold. Using a panel regression approach, as well as a regression discontinuity design, I test whether firms hold more cash when their access to credit is restricted. Counter-intuitively, I find no evidence that credit constraints causally affect cash holdings. Moreover, the variation in cash holdings explained by credit risk is unrelated to the variation explained by other proxy variables such as firm size or growth.