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 pdf Presentations: NBER SI Entrepreneurship 2021
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.

- Partisan Fertility and Presidential Elections

(with Gordon Dahl and Runjing Lu) SSRN link pdf NBER WP Presentations: NBER SI Children 2021
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 - R&R at RFS

(with Tony Cookson and Joey Engelberg) SSRN link SocArXiv link pdf
Best Paper Prize in Asset Pricing at the 2021 WFA conferenceBest Paper Prize in Markets and Trading at the 2021 Midwest Finance Association Conference 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.

- Unconventional Monetary Policy 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: We explore how banks transmit central bank liquidity injections using unique variation in the ECB’s 2011-12 Very Long-Term Refinancing Operations (VLTROs) which affected lending to firms discontinuously across credit ratings (i.e., within banks). We show that banks transmit liquidity differently to multi-bank firms than to firms with only one bank. Single-bank firms receive longer-term relationship lending and increase investment, while multi-bank firms receive short-term transactions-style lending only. Policy effects are attributable to increasing the maturity of bank borrowing from the ECB in combination with allowing banks to use loans to firms as collateral for such borrowing

- Credit Guarantees and New Bank Relationships

(with Patricio Toro) pdfPresented at: Finance UC International Conference, UC San Diego (Rady) Finance Seminar, Central Bank of Chile, Universidad de Chile, International Conference on Small Business Finance, Edinburgh Corporate Finance Conference, MIT Golub Center 4th Annual Conference, NBER Entrepreneurship, Chicago Financial Institutions Conference, and U. of Michigan Finance Seminar
What it's about: we show bank credit guarantee schemes (widely used worldwide) help firms scale up and develop new bank relationships, but scheme 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 Presented at: Georgetown, U. of Colorado (Boulder), University of Rochester, University of Maryland, Boston College, University of Michigan, London Business School, London School of Economics, Wharton. Invited, but did not present: NYU Stern, University of Washington (Seattle)

Publications

- 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 summaryAppendix 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?