William Mullins

Assistant Professor of Finance Rady School, UC San Diego

Email: wmullins at ucsd dot edu CV bio GoogleScholar

Working papers

Partisan Entrepreneurship

(with Joey Engelberg, Jorge Guzman, and Runjing Lu) SSRN link SocArXiv link pdf Presentations: NBER SI Entrepreneurship 2021
Best Paper Prize in Corporate Finance at the 2022 MFA Conference Best Paper Prize at the 2021 Colorado Finance Summit What it's about: we show that Republicans start more firms than Democrats, and that this difference is time-varying: Republicans increase their relative entrepreneurship during Re-publican administrations and decrease it during Democratic administrations (and vice versa).
Abstract: Republicans start more firms than Democrats. Using a sample of 27 million party-identified Americans between 1997 and 2017, we find that 8% of Republicans and 5% of Democrats become entrepreneurs. This partisan entrepreneurship gap is time-varying: Republicans increase their relative entrepreneurship during Republican administrations and decrease it during Democratic administrations, amounting to a partisan reallocation of 340,000 new firms over our 21 year sample. We find sharp changes in partisan entrepreneurship around the elections of President Obama and President Trump, and the strongest effects among the most politically active partisans: those that donate and vote.

The Social Signal

(with Tony Cookson, Runjing Lu and Marina Niessner) SSRN link pdf
What it's about: We examine social media attention and sentiment across the main investor social media platforms.
Abstract: We examine social media attention and sentiment from three major platforms: Twitter, StockTwits, and Seeking Alpha. We find that attention is highly correlated across platforms, but sentiment is not: its first principal component explains little more variation than purely idiosyncratic sentiment. We attribute differences across platforms to differences in users (e.g., professionals vs. novices) and differences in platform design (e.g., character limits in posts). We also find that sentiment and attention are both positively related to retail trading imbalance, but contain different return-relevant information. Sentiment-induced retail trading imbalance predicts positive next-day returns, in contrast to attention-induced retail trading imbalance, which predicts strongly negative next-day returns. These results highlight the importance of distinguishing between social media sentiment and attention, and suggest caution when studying the social signal through the lens of a single platform.

Political Sentiment and Innovation: Evidence from Patenters

(with Joey Engelberg, Runjing Lu, and Rick Townsend) SSRN link pdf What it's about: we show that inventor productivity is affected by the outcomes of US Presidential elections - this is true for (i) Republican/Democratic inventors and (ii) for immigrant inventors
Abstract: We document political sentiment effects on inventors in the US. Democrat patenters are more likely to patent (relative to Republicans) after the election of Barack Obama but less likely to patent following the election of Donald Trump. These effects are 2-3 times as strong among active partisans (those that vote and donate), are present even within firms over time, and are detectable up to six years post election. We also find a large drop in patenting by immigrant inventors (relative to non-immigrants) following the election of Trump. Finally, we show partisan concentration by technology class and firm. For example, Republicans outnumber Democrats 3-to-1 in weapons patenting, but are outnumbered by Democrats 5-to-1 at Google.

Unconventional Monetary Policy Transmission and Bank Lending Relationships

(with Anne Duquerroy and Christophe Cahn) SSRN link SocArXiv link pdf
Best Paper Prize at the Colorado Finance Summit
What it's about: we show differential transmission of unconventional monetary policy to single-bank firms (very numerous, smaller) relative to the multi-bank firms that are the focus of the banking literature.
Abstract: Firms with only one bank relationship make up the majority of firms in many economies. This paper explores whether single-bank firms receive differential transmission of policy-driven lending during crises, in comparison to multi-bank firms. Using unique variation in the ECB’s Very Long-Term Refinancing Operations (VLTROs), which affected lending to firms discontinuously across credit ratings, but within banks, we find differential and attenuated transmission of VLTRO liquidity to single-bank firms. Bank lending standards appear lower for multi-bank firms, and total policy-driven lending to multi-bank firms grew by 50% more than lending to single-bank firms.

Credit Guarantees and New Bank Relationships

(with Patricio Toro) pdf
What it's about: we show bank credit guarantee schemes (widely used worldwide) help firms scale up and develop new bank relationships, but policy design matters.
Abstract: Government credit guarantees for bank loans direct vast volumes of credit and are the main policy tool used to improve firms' access to credit. This paper examines Chile’s credit guarantee scheme, which is similar to that of many OECD countries. Using a regression discontinuity design around the eligibility cutoff we find that guarantees more than double firms' borrowing without detectable increases in default rates. We also show that banks use guarantees to build new borrower relationships, an important and poorly understood process. The scheme also has an amplification effect: firms increase borrowing from other banks following a guarantee. Finally, we show that firms use the credit increase to significantly scale up their sales and employment. The fact that guarantees are not a common pool resource in this policy design is critical to understanding these results.

The Governance Impact of Indexing: Evidence from Regression Discontinuity (pdf)

Publications

Partisan Fertility and Presidential Elections - forthcoming, AER: Insights, Dec 2022

(with Gordon Dahl and Runjing Lu) SSRN link pdf SocArXiv link NBER WP Co-author video Slides
What it's about: following Trump's 2016 election victory Republican-leaning counties experienced a sharp increase in fertility relative to Democratic counties, while Hispanic fertility fell relative to non-Hispanics.
Abstract:Changes in political leadership drive large changes in economic optimism. We exploit the surprise 2016 election of Trump to identify the effects of a shift in political power on one of the most consequential household decisions: whether to have a child. Republican-leaning counties experience a sharp and persistent increase in fertility relative to Democratic counties: a 0.7 to 1.4% increase in annual births, depending on the intensity of partisanship. Hispanics, a group targeted by Trump, see fertility fall relative to non-Hispanics, especially compared to rural or evangelical whites. Further, following Trump pre-election campaign visits, relative Hispanic fertility declines.

Echo Chambers - Accepted at Review of Financial Studies

(with Tony Cookson and Joey Engelberg) SSRN link SocArXiv link pdf Slides Data
Best Paper Prize in Asset Pricing at the 2021 WFA conferenceBest Paper Prize in Markets and Trading at the 2021 MFA ConferenceFirst Prize, 2021 CQA academic competition What it's about: stockmarket Bulls and Bears place themselves in "echo chambers," i.e. they selectively expose themselves to information which confirms their already-held beliefs.
Abstract: We find evidence of selective exposure to confirmatory information among 300,000 users on the investor social network StockTwits. Self-described bulls are 5 times more likely to follow a user with a bullish view of the same stock than self-described bears. This tendency is strong even among professional investors and is more pronounced on earnings announcement days. Placing oneself in an information “echo chamber” generates significant differences in the newsfeeds of bulls and bears: over a 50-day period, a bull will see 70 more bullish messages and 15 fewer bearish messages than a bear over the same period. Selective exposure creates “information silos” in which the diversity of received signals is high across users’ newsfeeds but is low within users’ newsfeeds. Finally, we show that this siloing of information is positively related to trading volume.

- Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic - Review of Asset Pricing Studies (2020)

(with Tony Cookson and Joey Engelberg) RAPS link (free) SSRN link SocArXiv link pdf on MarginalRevolution sentiment time series
What it's about: we show that Republican investors are differentially more optimistic about equities during the COVID-19 pandemic, suggesting investors are using mental models from politics in investing
Abstract: We use party-identifying language – like “Liberal Media” and “MAGA”– to identify Republican users on the investor social platform StockTwits. Using a difference-in-difference design, we find that the beliefs of partisan Republicans about equities remain relatively unfazed during the COVID-19 pandemic, while other users become considerably more pessimistic. In cross-sectional tests, we find Republicans become relatively more optimistic about stocks that suffered the most from COVID-19, but more pessimistic about Chinese stocks. Finally, stocks with the greatest partisan disagreement on StockTwits have significantly more trading in the broader market, explaining 28% of the increase in stock turnover during the pandemic.

- How do CEOs see their roles? Management Philosophies and Styles in Family and non-Family Firms - Journal of Financial Economics (2016)

(with Antoinette Schoar) SSRN link pdf Non-technical summary Appendix 1; Survey Appendix; Appendix 2
What it's about: we show that Family firms have different objective functions than non-Family firms
Abstract: Using a survey of 800 Chief Executive Officers (CEOs) in 22 emerging economies, we show that CEOs' management styles and philosophies vary with the ownership and governance structure of their firms. Founders and CEOs of firms with greater family involvement display a greater stakeholder focus and feel more accountable to employees and banks than to shareholders. They also have a more hierarchical management approach, and see their role as maintaining the status quo rather than bringing about change. In contrast, CEOs of non-family firms emphasize shareholder-value-maximization. Finally, firm-level variation in ownership is as important in explaining management philosophies as cross-country or industry-level differences.

Other publications

- Unrest in Chile - HBS Case Study (2020)


What it's about: we examine the causes of the unrest that paralyzed Chile in October 2019, and led to a referendum to re-write the constitution
Abstract: In 2020, Chileans would head to the ballot box to decide their country’s future. Many international observers credited Chile’s decades of neoliberal governance with turning the country into Latin America’s “Tiger,” a prosperous, diversified economy on its way to becoming the continent’s first developed country. But in October of 2019, a mass protest movement ground the country to a halt and shocked its political class, showing the world a different Chile—one defined by inequality, social distrust, and a young generation of political activists. As Chile prepared to vote in the fall of 2020 on whether to adopt a new constitution, could it sculpt a more equitable society while remaining “the exception” on a continent known for its political instability? Or would Chile’s prosperity go the same way as its neoliberal experiment?

- Walmart Chile After the Unrest: Doubling Down or Pulling Out? - HBS Case Study (2021)


What it's about: we examine Walmart Chile's decisions in the face of the unrest that paralyzed Chile in October 2019