Spencer Barnes, Ph.D.
I am an Assistant Professor of Finance at The University of Texas at El Paso.
My research focuses on how different human phenomena impact prices in financial markets.
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Working Papers
"Racial discrimination in asset prices: Evidence from horse betting," with Luke C.D. Stein, revise and resubmit, Financial Review.
Abstract: In the presence of behavioral biases, prices can diverge from fundamentals, and the effects of racial/ethnic bias are evident in many financial and non-financial markets. We investigate the determinants and consequences of discrimination in parimutuel horse betting by assessing return differences across horses whose trainers have racially/ethnically distinctive surnames, which bettors may see as a proxy for quality (accurately or inaccurately) or a source of non-pecuniary returns (due to animus). Bets on horses with nonwhite-named trainers earn higher risk-adjusted returns, and these differences are especially pronounced among riskier bets, which receive lower average returns under the well-known "favorite-longshot" bias. Racial/ethnic return differences are stronger overall and especially among longshots for "win" than "place" and "show" bets, among horses with poor prior performance, in low-stakes races with "fast" conditions, and in the U.S. South. These results are consistent with the effects of discrimination being strongest among less-informed and less-sophisticated bettors.
"Filing while female: What EEOC filings tell us about workplace discrimination severity," with Shiu-Yik Au and Andréanne Tremblay-Simard.
Abstract: We develop a novel metric of workplace discrimination severity: the gender payout gap in the United States Equal Employment Opportunity Commission (EEOC) discrimination filings. On average, women receive payouts from discrimination litigation that are about 16% higher than payouts received by men even when controlling for geography, industry, employer, filer, and discrimination characteristics. Women’s cases remain open significantly longer than men’s with similar demographic, case and employer characteristics; we argue that this is due to women’s cases complexity and severity. In addition, we provide extensive statistics about workplace discrimination in U.S. organizations, underscoring the need to account for intersectionality and case complexity when measuring discrimination severity. We also show how our discrimination severity metric can be extended to a race-based or age-based payout gap. Lastly, we document that discrimination severity concentrates in firms with weaker corporate culture, firms with more male independent directors, firms with more men on the board’s subcommittees, less profitable firms and firms with higher financial distress.
"Labor market regulation and corporate cash holdings: Evidence from E-Verify," with Erik Devos and Sebastian Jimenez.
Abstract: We analyze the effect of labor market regulation on corporate cash holdings using the staggered adoption of state-level E-Verify mandates as a quasi-natural experiment. Employing a stacked difference-in-differences framework, we find that firms headquartered in states implementing E-Verify mandates experience a significant decline in cash holdings. The effect is strongest among firms that rely on low-skilled labor, exhibit lower productivity, and face higher financial risk. The evidence is consistent with heightened managerial risk perception following E-Verify mandates as managers deploy cash preemptively as a hedge against potential future labor market disruptions. Our study highlights a novel channel through which immigration enforcement alters corporate liquidity policy, and highlights when regulatory shocks reduce rather than increase precautionary cash holdings.
Publications
"Corporate share repurchases and the 2023 excise tax," with Don Autore, Nicholas Clarke, and Andrew Schrowang. Journal of Corporate Finance. Vol 95 (November 2025), 102881.
Abstract: The Inflation Reduction Act of 2022 imposes a one percent excise tax on US corporate share repurchases, effective January 1, 2023. The tax's implementation is associated with a significant decline in corporate repurchases that is not offset by a corresponding increase in dividends. Aggregate repurchases decline from about $1 trillion in 2022 to just over $800 billion in 2023, and the average firm reduces quarterly repurchases (as a fraction of market capitalization) by roughly 25%. The decline in repurchases by US firms far exceeds a contemporaneous decline in repurchases by Canadian firms, is large in a historical context, and is not driven by firm fundamentals. Tax-induced cuts to repurchases are associated with an increase in cash but no increase in investment, consistent with long-standing finance theory that investment decisions precede payout decisions.
"Under (financial) pressure," with Brandon Mendez and Ted Dischman, forthcoming, Financial Review. Media coverage: The Independent; Yahoo Sports; Marginal Revolution; Men's Fitness; BroBible; Heavy; Marca; Reddit; National Affairs; Faculti; UTEP; KTSM (El Paso NBC); KVIA (El Paso ABC); Scienmag; StudyFinds.
Abstract: We examine how financial pressure influences rule enforcement by leveraging a novel setting: NFL officiating. Unlike traditional regulatory environments, NFL officiating decisions are immediate, transparent, and publicly scrutinized, providing a unique empirical lens to test whether a worsening financial climate shapes enforcement behavior. Analyzing 13,136 defensive penalties from 2015 to 2023, we find that postseason officiating disproportionately favors the Mahomes-era Kansas City Chiefs, coinciding with the team’s emergence as a key driver of TV viewership\ratings and, thereby, revenue. Our study suggests that financial reliance on dominant entities can alter enforcement dynamics, a concern with implications far beyond sports governance.
"Within-firm job description wage gaps: The implications for financial performance," solo-authored, forthcoming, Australian Journal of Management.
Abstract: I study within-firm and job-type wage gaps arising from words in job descriptions using a natural language processing technique (word2vec) on proprietary U.S. job-level wage data from publicly traded companies spanning two decades. Analyzing nearly half a million job descriptions, I find that stereotypically feminine descriptions correspond to lower wages compared to masculine ones, as they require fewer years of experience and less education. At the firm level, wider job description wage gaps---where masculine descriptions earn more---are associated with higher firm value. A difference-in-differences design around Executive Order 13672 supports a plausibly causal interpretation, and the effect is strongest in politically sensitive firms. The wage premium for masculine descriptions is linked to a higher share of skilled jobs, greater productivity, and increased investment.
"Unintended consequences of discrimination litigation caps," solo-authored. Journal of Financial Research. Vol 48, No 3 (Fall 2025), pp. 1315-1349. Media coverage: CATO Institute.
Abstract: On July 14, 1992, the U.S. Equal Employment Opportunity Commission (EEOC) implemented a policy that caps punitive damage payouts from discrimination litigation at $50,000 for firms with 15-100 employees, $100,000 for 101-200 employees, $200,000 for 201-500 employees, and $300,000 for over 500 employees. This institutional change allows for a “difference-in-discontinuities” design by combining the before/after with the discontinuous policy variation. I find that these kink points incentivize firms to restrict their number of employees, which reduces their maximum discrimination litigation exposure to between 40% and 60% of their yearly median revenues. In turn, firm growth decreases for firms below these EEOC thresholds after the implementation of the policy. These firms reduce financing and are not motivated to decrease growth by relative changes in cash flows from discrimination risk exposure.
"Analysts' accuracy following an increase in uncertainty: Evidence from the art market," with Brandon Mendez and Andrew Schrowang. Journal of Economic Behavior and Organization. Vol 228 (December 2024), 106761.
Abstract: Financial economists have long been interested in asset price uncertainty. This study utilizes the art market as an exogenous setting to explore how an increase in price uncertainty (i.e., the death of an artist) impacts the accuracy and forecast error of analysts' estimates. We find that in the year following an artist's death, analysts' accuracy decreases by 14%, and their forecast error increases by 11%. Additional analysis indicates that the effect is due to both a decrease in the estimation range as well as an increase in the forecast bias of analysts. These findings suggest that analysts perform poorly following an increase in uncertainty which is pertinent for many real asset markets.
"Discrimination announcements, employee opinion, and capital structure: Evidence from the EEOC," solo-authored. Financial Review. Vol 59, No 3 (August 2024), pp. 745-777.
Abstract: This paper investigates the impact of discrimination publicity on employee opinion. Employees reduce their sentiments toward the firm and its leaders when discrimination becomes public via Equal Employment Opportunity Commission (EEOC) announcements. Following the stakeholder theory of capital structure, the effect clusters in firms with above-average leverage. Additionally, discrimination announcements increase accruals and the E index, reinforcing a culture of negative management at the firm. These results suggest that human capital risk plays a vital role in employee reactions to discrimination announcements and lend insight into management practices.
"Employee approval of CEOs and firm value: Evidence from employees’ choice awards," with Yingmei Cheng. Journal of Corporate Finance. Vol 78 (February 2023), 102341.
Abstract: Using Glassdoor's list of “Top CEOs by Employees' Choice,” we adopt a regression discontinuity (RD) specification to establish a causal link between the employee approval of CEOs and firm value. Having a CEO included in the top list results in an increase in firm performance in both stock returns and return on assets. Having a top CEO significantly increases a firm's employee efficiency, attraction to future employees, hiring of high-quality laborers such as inventors, and attraction to the customers. Our findings establish that the CEO-employee relationship is an important, though intangible, component of a corporation, and we emphasize the critical role of perceived corporate culture in the spirit of Guiso et al. (2015).
"Killing in the stock market: Evidence from organ donations," solo-authored. Journal of Behavioral and Experimental Finance. Vol 32 (December 2021), 100563.
Abstract: Daily individual patient records for every organ transplant capable hospital in the United States from 1987 to 2018 indicate a negative relationship between stock market returns and deaths. Stress related deaths, such as heart attacks and strokes, are the most pronounced around stock market movements. Market shifts also alter the availability of organ transplants creating life altering consequences for organ wait list patients. A geographic effect exists within states as well. An interrupted time series specification mitigates some endogeneity concerns. The findings imply that wealth shocks alter current utility even at the extremes emphasizing the spillover effects of finance.