Marina Gertsberg, Hae Won (Henny) Jung, and Yuyang Zhang ♦ This paper examines how companies respond to negative ESG incidents by appointing directors with charitable organization experience. Firms are more likely to make these appointments following high-profile ESG incidents, especially…
Julian Atanassov and Vikram Nanda ♦ We hypothesize that increases in federal spending financed by government borrowing crowd out innovative firms from financial markets. We find that unexpected defense spending shocks are followed by lower R&D investment and subsequent declines…
Yu-Jane Liu, Juanjuan Meng, Dalin Sheng, Guangxin Yang, and Yu Zhang ♦ We investigate “spiritual insurance” — a mental strategy for coping with risk, where individuals engage in good deeds, including donations, in exchange for perceived blessings and protection. Using…
Jozef Barunik and Matej Nevrla ♦ We investigate whether the tails of firm-level idiosyncratic return distributions are driven by common shocks. We use quantile factor analysis to extract such common idiosyncratic quantile factors with asymmetric pricing effects, and we find…
Jung Hoon Lee, Saurin Patel, and Shyam Sunder Venkatesan ♦ Mutual fund families increasingly outsource the portfolio management task to external advisors. The high-powered incentive contract offered to external advisors, presumably an optimal outcome, implicitly creates convexity in their payoff.…
Charles W. Calomiris, Harry Mamaysky, and Ruoke Yang ♦ We derive a measure of firm-level regulatory exposure from corporate earnings calls text and study its effects on growth, leverage, profitability, and equity returns. Higher regulatory exposure results in slower sales…
