Demographic, jurisdictional, and spatial effects on social distancing in the United States during the COVID-19 pandemic
(with Rajesh Narayanan, R. Kelley Pace, and Dimuthu Ratnadiwakara)
PLOS One, 2020
The efficiency of the benchmark revisions to the current employment statistics (CES) data
(with Keith Phillips)
Economics Letters, 2012
Clinically-established defining characteristics of narcissists suggest CEO narcissism likely impacts firm value through human capital channels. Consistent with classic narcissist traits of undervaluing people and lacking empathy influencing CEO decisions, we find narcissistic CEOs are more likely to initiate layoffs, do so after less severe downturns in performance, and put less weight on potential human capital losses when making layoff decisions. Event study results imply narcissistic CEOs destroy value through suboptimal layoff decisions in high human capital intensity industries. Defining characteristics of narcissism also suggest CEO narcissism likely impacts firm value through an executive human capital channel. We find turnover of non-CEO executives with pay closer to their CEO’s is greater under narcissistic CEOs, and stock price reactions to these departures are more negative the longer their tenure. Event study results for CEO departures imply a negative net impact of CEO narcissism on firm value through both human capital channels.
Presentations: Louisiana State University, Texas A&M University
Following a data breach, interlocking firms are more likely to disclose exposure to cybersecurity risk in their annual report. Firms connected by auditors, via economic rivalry, or along a supply chain do not show similar disclosure propagation. The evidence suggests that disclosure propagation over interlocking firms is driven by a director’s self-interests or by a behavioral response to cybersecurity risk saliency, rather than by an improved monitoring for risk exposure. This finding sheds insight into the expanding length of risk factor disclosures and suggests that not all of this growth may be in the best interests of shareholders.
Presentations: FMA 2018 Annual Meeting, Louisiana State University, Texas A&M University
A loan covenant violation may be informative to parties outside of the lender-firm pair that agreed to the covenant term. This implies externalities of lender monitoring. I find that a firm’s covenant violation yields spillover effects both to other violators and to non-violators in the firm’s industry. Covenant violators have ex post renegotiation outcomes that depend upon rival firm violation. This suggests that violation by peers informs the optimal renegotiation outcome following covenant violation. Non-violators benefit competitively from peer violation. Average spillover effects amount to between 8% to 60% of the direct effect, depending on the outcome studied.
Using a network regression framework that allows for joint determination of all possible appointments of directors to firms, we find that there is two-sided matching in board appointments. A director is 14.5 times more likely to join a firm’s board when the director and the firm share similar reputations for management friendliness. Reputational matching between directors and firms is more important when coordination costs for rejecting mismatched directors are lower. Directors are more likely to take on board appointments at firms where the appointment would shift the director’s reputation towards her target reputation. Moreover, consistent with theory, we find that a reputational shock to a subset of firms has economy-wide effects on the incentives for directors to change their reputations.
We find that the effects of common ownership vary depending on firms’ product market characteristics. When firms are in a more competitive industry, marked by lower product differentiability, higher rates of common ownership lead to higher prices. In these environments, firms also lower research and development expenditures and benefit from higher profitability. We use mergers and acquisitions of financial institutions as a quasi-natural experiment to exogenously vary a firm’s common ownership levels and establish causality. Our findings suggest that any regulation to curb the anticompetitive effects of common ownership needs more industry-level consideration and should take into account the product-market characteristics of firms.
Cybersecurity Events and Bank Deposits
(with Rajesh Narayanan)
Auditor liability and management earnings forecasts
(with Zhihong Chen and Nan Yang)
Local Yield Curves
(with Rajesh Narayanan)