Freda Fang

Research

Shared Origins, Shared Risk: Implicit Insurance Within Immigrant-Owned Firms (Job Market Paper)

Abstract: Immigrants are not only workers but increasingly employers across all OECD countries. How do immigrant-owned firms adjust employment when demand falls? Using linked administrative data on Canadian private incorporated firms from 2001 to 2017, I show that immigrant-owned firms sustain more employment in downturns than comparable native-owned firms, using both a panel analysis of industry shocks and a natural experiment that exploits firms’ ex-ante exposure to the 2014-2015 oil-price drop. These firms also pay lower wages, and the same worker earns less when employed by an immigrant-owned firm. This effect is concentrated among workers who share the owner’s country of origin: during downturns, they are more likely to be retained than their immigrant coworkers in the same firm, and hiring shifts toward them. These findings are consistent with implicit employment insurance sustained by shared origin: workers accept lower pay for job security, and lower labor costs may help finance continued employment when revenues fall. Immigrant ownership may thus contribute to labor-market resilience and provide an informal safety net for immigrant workers.

Venture Fraud, with Alexander Dyck, Camille Hebert, and Ting Xu, R&R, Journal of Finance

Presentations: CUHK-RAPS-RCFS (2026, Scheduled), EFA (2026), FIRS (2026), UT Austin Forensic Finance Conference (2026), University of Kentucky Finance Conference (2026), IPC Spring Research Symposium (2026), Bretton Woods Accounting and Finance Ski Conference (2026), UD Weinberg-ECGI Symposium (2026), ASU Sonoran Winter Finance Conference (2026), HEC Paris Entrepreneurship Workshop (2025), Rotman School of Management (2025)

Media Coverage: Financial Times, Bloomberg Money Stuff by Matt Levine, The Globe and Mail, ECGI, Boardroom Governance Newsletter, Nominal News 

Award: 2026 John L. Weinberg/IRRCi Research Paper Award  

Abstract: We assemble the first dataset of venture fraud cases involving 654 U.S. VC-backed startups. Venture fraud has increased over the past two decades. Among newly public firms, VC-backed companies are more likely to face fraud charges than comparable non-VC-backed firms. Governance characteristics, rather than founder traits, are the strongest predictors of fraud: fraud is more prevalent in startups with founder-friendly contracts, complex cap tables, and initial rounds raised in hot market conditions. Fraudulent entrepreneurs continue to found new VC-backed startups unharmed, suggesting weak market discipline. These findings highlight growing agency costs in private markets.

Silicon Valley Everywhere? Place-Based Innovation Policy and the Direction of Entrepreneurial Entry, with Mohaddeseh Heydari Nejad 

Presentations: NBER Economics of Talent Meeting (2026), NFA (2026), EARIE (2026), RCFS Winter Conference (2026),  Rotman School of Management (2026),  Kelley School of Business (2025)

Abstract: Place-based innovation policies increasingly target particular industries. We study whether such policies redirect entrepreneurial entry toward targeted industries by making them more salient to potential founders. We exploit accelerator launches by the Creative Destruction Lab, a global mentorship program, each targeting one science-based industry in one city, and link program records to startup and founder data. Among founders who never apply to or join the program, entry into the targeted industry rises by 12 percent relative to other local industries, with no detectable increase in city-wide entrepreneurship. This reallocation is concentrated among science-trained first-time founders and is strongest when the targeted industry has little local presence. We develop and estimate a model of entrepreneurial industry choice with limited consideration that separates the consideration and expected payoff effects of a launch. For a science-trained first-time founder, the estimated consideration effect increases the odds of choosing the targeted industry by a factor of 2.7 at the average launch and 4.3 when the industry is locally emerging. Counterfactual estimates attribute 30 percent of science-trained first-time founders’ entry into targeted industries to this consideration channel. Place-based innovation policy can therefore shape the direction of innovation not only through the resources it provides, but also by influencing the industries to which entrepreneurs direct their attention.

Green Demand vs. Brown Assets: Can Market Forces Discipline Polluting Divestitures?

Presentations: Inaugural HKU Governance and Sustainability PhD Workshop (2025),  EsFA (2025), Rotman Sustainable Finance Research Roundtable (2025), NFA PhD Session (2024), MFA Regular Session (2024),  Rotman School of Management (2023)

Abstract: I examine whether market forces can mitigate environmental externalities in the context of U.S. fossil-fuel power plant divestitures. Using plant-level data from 2004 to 2022, I find that divested plants increase carbon emissions by 18% on average after the transaction, but this increase is almost entirely offset in fully deregulated electricity markets, where firms face stronger incentives to cater to green preferences. Consistent with a demand-side mechanism, the offset is strongest in regions and periods with greater corporate demand for clean energy. The findings suggest a demand-side channel through which competitive electricity markets can mitigate environmental costs and support decarbonization.