Working papers
(with
Gordon Dahl,
Joey Engelberg
and
Runjing Lu
)
  SSRN link
We estimate that 3.1% of the US voter population is registered to vote in two states, opening up the possibility for them to choose where to vote. Double registration is 3.5 times more likely in the wealthiest 1% of zip codes vs. the bottom quartile, giving wealthy Americans more voting power. Double-registrants respond to both incentives and costs, disproportionately choosing swing states (higher incentive) and states which automatically send out mail-in ballots (lower cost). We call this behavior cross-state strategic voting (CSSV) and estimate there were 217,000 such votes involving swing states in the 2020 presidential election. While there are more Democrat double-registrants, Republicans are more responsive to swing-state incentives. The net effect did not alter the 2020 election, although it could change the outcome in closer elections (e.g., Florida in 2000) or if one party increased CSSV relative to the other.
Partisan Entrepreneurship (R&R Journal of Finance)
(with
Joey Engelberg,
Jorge Guzman, and Runjing Lu)
  SSRN link
SocArXiv link
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.
- Best Paper Prize in Corporate Finance at the 2022 MFA Conference
- Best Paper Prize at the 2021 Colorado Finance Summit
(with
Tony Cookson,
Runjing Lu
and
Marina Niessner
)
  SSRN link
We examine social media attention and sentiment from three major platforms: Twitter, StockTwits, and Seeking Alpha. We find that, even after controlling for firm disclosures and news, attention is highly correlated across platforms, but sentiment is not: its first principal component explains little more variation than purely idiosyncratic sentiment. Using market events, 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 contain different return-relevant information. Sentiment predicts positive next-day returns, but attention predicts negative next-day returns. These results highlight the importance of distinguishing between social media sentiment and attention across different investor social media platforms. In the burgeoning social finance literature, nearly all papers examine single platforms; our paper cautions that attention-related results from these papers will likely generalize but results concerning sentiment may not.
- Best Paper Prize in Investments and Asset pricing at the 2023 MFA Conference
- Best Paper Award 11th Michigan State FCU Conference, 2022
Political Sentiment and Innovation: Evidence from Patenters
(with
Joey Engelberg,
Runjing Lu
and
Rick Townsend
)
  SSRN link
We document political sentiment effects on US inventors. Democratic inventors are more likely to patent (relative to Republicans) after the 2008 election of Obama but less likely after the 2016 election of Trump. These effects are 2-3 times as strong among politically active partisans and are present even within firms over time. Patenting by immigrant inventors (relative to non-immigrants) also falls following Trump's election. Finally, we show partisan concentration by technology class and firm. This concentration aggregates up to more patenting in Democrat-dominated technologies (e.g., Biotechnology) compared to Republican-dominated technologies (e.g., Weapons) following the 2008 election of Obama.
Unconventional Monetary Policy Transmission and Bank Lending Relationships (R&R Management Science)
(with
Anne Duquerroy
and
Christophe Cahn
)
  SSRN link
SocArXiv link
Firms with only one bank relationship make up the majority of firms in many economies.
This paper explores whether policy-driven lending is differentially transmitted to
single-bank firms, in comparison to the multi-bank firms that have been the focus of
the literature. 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 selective transmission of VLTRO liquidity to
single-bank firms. Banks apply higher lending standards to single-bank firms, with
banking relationships determining both new lending and lending maturity. By contrast,
banks appear to transmit policy lending near-uniformly across multi-bank firms.
- Best Paper Prize at the Colorado Finance Summit
Credit Guarantees and New Bank Relationships
(with Patricio Toro)
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
Publications
Partisan Fertility and Presidential Elections
American Economic Review: Insights (2022)
(with
Gordon Dahl
and
Runjing Lu
)
  SSRN link
SocArXiv link
NBER WP
Co-author video
Slides
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
Review of Financial Studies (2022)
(with
Tony Cookson
and
Joey Engelberg
)
  SSRN link
SocArXiv link
Slides
Data
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.
- Best Paper Prize in Asset Pricing at the 2021 WFA conference
- Best Paper Prize in Markets and Trading at the 2021 MFA Conference
- First Prize, 2021 CQA academic competition
Does Partisanship Shape Investor Beliefs? Evidence from the
COVID-19 Pandemic
Review of Asset Pricing Studies (2020)
(with
Tony Cookson
and
Joey Engelberg
)
SSRN link
SocArXiv link
sentiment time series
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
Non-technical summary
Appendix 1
Survey Appendix
Appendix 2
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)
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)