"Paying the Elite in an Anti-Elite Era" Solo-authored
Selected Presentations: Asia-Pacific Corporate Finance Online Workshop (ACFOW) Job Market Session
Populists have long targeted CEO pay and now govern a third of U.S. states. Exploiting gubernatorial elections, I find that CEO compensation—especially discretionary and excess pay—grows 5% less at firms in states that elect a new populist governor. The effect holds under both Republican and Democratic populists, whereas an election that changes the governor’s party without electing a populist does not slow pay growth. Political access shields firms from the effect, while pay visibility and exposure to local stakeholders amplify it. After the election, higher disclosed pay draws more media attention and a more negative market response. Boards also tie compensation more closely to accounting performance and less to stock returns, and weaken incentives for risk-taking. The results suggest that populism pressure restrains CEO pay growth and reshapes incentives even without a change in regulation.
"Shareholder Demand for Disclosure and Firm Resistance: Evidence from 30 Years of Proposals" Solo-authored
Reject with Invitation for Resubmission to Journal of Accounting Research
Shareholders increasingly ask firms to disclose rather than to act. Assembling and analyzing three decades of shareholder proposals with large language models (LLMs), I provide an anatomy of who demands disclosure, what information they request, on what grounds, and how firms resist supplying it. Institutional proponents turn to disclosure more often than individuals. The requested content spans a spectrum of managerial discretion, from factual descriptions to forward-looking and analytical assessments. Proponents appeal to reductions in external and internal information asymmetry and to positive real effects. Firms counter with compliance costs, proprietary risks, distortions to their operations, and denials of incremental value. Consistent with the existence of processing costs, firms argue that the requested information is already public—most often on their websites—in 31% of disclosure proposals. These arguments are associated with the SEC’s concurrence in exclusion and the shareholder vote. Finally, proponents choose disclosure rather than action when an issue’s importance is established but the firm-specific solution is contested.
"The Geoeconomics of Corporate Supply Chains" with Jing Wu
Selected presentations: ABFER, CICF, CFRC, EUROFIDAI–ESSEC, SFS Cavalcade Asia-Pacific, 2nd International Workshop on Macroeconomics and Finance (U Macau), JCF China (Renmin), Stigler Center–CEPR Political Economy of Finance Conference (U Chicago) * (*: by co-author)
We investigate whether corporate supply chains embed geoeconomic statecraft. Exploiting UN Security Council rotations, we show that U.S. firms reallocate sourcing toward newly elected countries. The increase is unique to the U.S., absent for exports, concentrated in comparative disadvantage products, and largest for “swing” countries, consistent with market access as a diplomatic inducement. The response is supported by policy concessions and firms’ political incentives, weakens when supplier switching is costly, and is associated with lower operating margins but higher valuations and lower political risk. Countries receiving larger sourcing increases subsequently exhibit closer voting and rhetoric alignment with the U.S.
"LIFO and the Muted Response to Inflation Expectations" with Hanwen Xu and Heng Yue
Revise & Resubmit to The Accounting Review
Firms tend to increase inventory when they expect input prices to rise, buying ahead to lock in lower costs. We first provide evidence that the stockpiling channel, rather than a lower real cost of capital, is the primary driver of the positive relation between inventory and inflation expectations. We then find that the Last-In, First-Out (LIFO) inventory method significantly dampens this response, consistent with LIFO muting the short-term earnings benefit of buying ahead and potentially weakening managers' incentive to stockpile. This attenuation is stronger among firms with larger LIFO reserves, consistent with LIFO liquidation substituting for proactive stockpiling. Using Section 301 tariffs and physical import quantities from Bills of Lading, we provide corroborating evidence that these patterns reflect real behavioral differences rather than mechanical valuation effects.
"When Money Tightens: Monetary Policy and Payment Delays" with Weikai Li and Jing Wu
Trade credit can redistribute monetary policy's effects through the timing of payments between firms. Using monthly Dun & Bradstreet supplier reports for U.S. firms over 2004-2023, we study how firms adjust trade credit in response to monetary tightening and how prior late payments moderate their stock-price responses. Tightening surprises are associated with increases in total reported supplier credit and exposure classified as late payment. Most of the dollar increase in late payments occurs among short delays. Adjustment occurs along both extensive and intensive margins, with more reported late payment experiences and larger amounts per experience. Late payment responds more strongly to news about the future policy path, to tightening rather than easing surprises, and for firms facing greater financing constraints, consistent with a financing motive for payment delays. Prior late payers also exhibit more favorable relative announcement returns. The evidence suggests that payment flexibility helps some customers accommodate monetary tightening.
"Credit Tightening and Earnings Quality" with Hanwen Xu, Heng Yue, and Pingui Rao
Revise & Resubmit to Journal of Business Finance & Accounting
We investigate the effect of credit tightening on firms’ earnings quality (EQ). During periods of credit tightening, agency conflicts between lenders and borrowers intensify, prompting firms to adjust their EQ to compete for scarce credit resources. Leveraging a unique setting in China, where credit tightening is induced by the crowding-out effect of local government debt and varies across cities, we find that firms improve EQ in response to credit tightening. The effect is less pronounced for state-owned enterprises (SOEs) and more pronounced for firms with greater financial constraints and higher growth opportunities. Moreover, we find evidence that firms with improved EQ secure more debt financing and enjoy a lower cost of debt. Our evidence highlights credit tightening as a crucial macroeconomic determinant of firms’ EQ.