Sustainability or Greenwashing: Evidence from the Asset Market for Industrial Pollution, Journal of Finance, 2025
(with Ran Duchin, Janet Gao)
Media: The Fin Reg Blog (Duke University School of Law), Promarket (University of Chicago Stilger Center), Cato Institute, Gies College of Business News
Dimensional Fund Advisors Prizes for 2025, Distinguished Paper
Best Conference Paper Award, Arizona State University Sonoran Winter Finance Conference, 02/ 2023
Best Conference Paper Award, Drexel University-ECGI 16th Annual Corporate Governance Academic Conference, 04/2023
CEO Hometown Preference in Corporate Environmental Policies, Management Science, 2025
(with Wei Li, Qifei Zhu)
Tax Policy and Abnormal Investment Behavior, Review of Financial Studies, 2024
(with Eric Zwick)
Charles River Associates Award for Best Corporate Finance Paper, WFA, 6/2017
Best Conference Paper Award, Colorado Finance Summit, 1/2017
Personal Taxes and Labor Downskilling: Evidence from 27 Million Job Postings, Management Science, 2023
(with Murillo Campello, Janet Gao)
Financial Costs of Judicial Inexperience, JFQA, 2022
(with Benjamin Iverson, Joshua Madsen, Wei Wang)
Media: Wall Street Journal, Oxford Business Law Blog Harvard Law School Bankruptcy Roundtable
Financial Constraints and Corporate Environmental Policies, Review of Financial Studies, 2021
(with Taehyun Kim)
Media: Principles for Responsible Investment (PRI)
Caught in the Cross-fire: How the Threat of Hedge Fund Activism Affects Creditors, Journal of Empirical Finance, 2021
(with Felix Feng, Heqing Zhu)
Media: Columbia Law School Blog
Kicking Maturity Down the Road: Early Refinancing and Maturity Management in the Corporate Bond Market, Review of Financial Studies, 2018
More Frequent than you think: Revisiting Capital Structure Adjustment, Accepted, Journal of Finance: Insights and Perspectives
(with Peter DeMarzo and Zhiguo He)
This paper revisits the empirical evidence on capital structure adjustment and the prevalence of financing "inaction.'' We show that the conclusion of infrequent leverage adjustment is sensitive to two methodological choices: high adjustment thresholds and reliance on net balance-sheet changes. Using lower thresholds and gross flows from cash-flow statements, we find that adjustment is substantially more frequent than previously documented, and that the pattern is dominated by sharp size heterogeneity. Smaller firms exhibit substantial inertia consistent with fixed costs; the largest firms (top 1% by assets) behave as if frictions are negligible. Frictionless-recapitalization models thus better describe large-firm leverage dynamics.
(with Zhiguo He, Jessica Li)
Firms often retire their bonds before maturity at market prices, even though the leverage ratchet effect implies that buybacks at fair prices cannot benefit shareholders. We show that in a liquidity-driven default setting, corporate cash holdings that carry a liquidity premium restore the gain of debt buyback, and buybacks occur especially when the firm faces some sudden termination risk. We solve in closed form a continuous-time model with cash and smoothly adjusted consol debt, which predicts that the firm issues debt when cash is scarce and buys it back when cash is abundant but not yet plentiful enough to pay out. In a verified sample of 4,347 corporate bond tender offers over 2000--2024, cash-rich firms tender more, and the TCJA repatriation shock leads moderately treated firms to retire more bonds while the most treated shift to equity payouts, as the model's payout boundary predicts.
(with Elisabeth Kempf, Margarita Tsoutsoura)
We study how leadership ideology shapes workforce composition in publicly listed U.S. firms. Using matched CEO–employee voter registration data, we show that CEO party switches are followed by a sizable increase in the share of workers politically aligned with the new CEO, with remarkably little heterogeneity across hierarchical levels. The effect is robust to analyses that exploit retirement-age departures as plausibly exogenous variation in the timing of leadership transitions. We further show that the workforce realignment operates through a geographic channel: following a CEO party switch, firms expand employment more in areas politically aligned with the new CEO. These findings highlight a ``top-down ideology'' effect through which corporate leadership shapes the geographic allocation of talent and contributes to partisan segregation across U.S. workplaces
(with Jacopo Ponticelli, Stefan Zeume)
We use plant-level data from the U.S. Census of Manufacturers to study the short- and long-run effects of temperature on manufacturing activity. We find that high-temperature shocks significantly increase energy costs and lower productivity for small plants, while large plants are mostly unaffected. Commuting zones with higher increases in average temperatures between the 1980s and the 2010s experience a decline in the number of small plants, reallocation of labor from small to large plants, and higher local labor market concentration. Differences in costs per unit of energy, managerial skills, and access to finance contribute to explaining our results.
Media: VOX, Kellogg Insight
(with Janet Gao, Wenting Ma)
How does access to financing influence racial pay inequality inside firms? We answer this question using the employer-employee matched data provided by the U.S. Census Bureau and exploiting the staggered passage of anti-recharacterization laws as a shock to firms’ debt capacity. We find that better access to debt financing significantly narrows the earnings gap between minority and white workers. Minority workers experience a persistent increase in earnings and also a rise in the pay rank relative to white workers in the same firm. This effect is not explained by intrinsic differences across workers, time-varying skill premium inside the firm, labor market competition, or dynamic worker-firm matching. The effect is more pronounced among mid- and high-skill workers, in areas where white workers are in shorter supply, and for firms with less diverse boards and greater pre-existing racial inequality. Our evidence is consistent with access to financing allowing firms to better utilize minority workers’ human capital.