Digital Finance Platforms: Toward a New Regulatory Paradigm

The computers upon which we work all have operating systems that we generally ignore. We mainly deal with the apps that run on these systems. Email, ubiquitous as it is, is merely an app. Nothing works without the system in the background, and because it works so well, we tend to neglect it. The same […]


Special Purpose Acquisition Companies (SPACs) are simply enterprises that raise money from the public with the intention of purchasing an existing business and becoming publicly traded in the securities markets. If the SPAC is successful in raising money and the acquisition takes place, the target company takes the SPAC’s place on a stock exchange, in […]

Do Private Equity Funds Over-Lever Portfolio Companies?

Private Equity (PE) has become a vital component of the financial system. At the end of 2020, global assets under management in PE funds that execute leveraged buyouts (LBO) mushroomed to $2.6 trillion. Despite its role as a vital source of capital in private markets that can potentially lead to greater employment and shared prosperity, […]

The Supreme Court as a Source of Systemic Risk

Self-regulatory organizations (SROs) play an enormous role in financial markets. The Financial Industry Regulatory Authority (FINRA) oversees the brokerage industry, while the National Futures Association (NFA) covers the futures markets. Securities clearing firms, derivatives clearinghouses, the Municipal Securities Rulemaking Board (MSRB), and exchanges, such as the New York Stock Exchange (NYSE), are all SROs. Modern […]

The Effect of Shareholder Scrutiny on Corporate Tax Behavior: Evidence from Shareholder Tax Litigation

What are the causes and consequences of shareholder tax litigation? The annual frequency of shareholder tax litigation has nearly tripled in recent years, but little is known about why certain firms get targeted with this kind of litigation and how this litigation affects not only the sued firm but also its industry peers. Our recent paper examines […]

When Companies Don’t Die: Analyzing Zombie and Distressed Firms in a Low Interest Rate Environment

Last September, The Economist published an article titled “Why Covid-19 will make killing off zombie firms harder.” The article fueled an already widely debated topic and expresses general concerns that schemes put in place to help pandemic-stricken businesses to survive might exacerbate therise of the corporate undead. The ongoing crisis highlights the necessity of analyzing the ”zombification” phenomenon; a constellation in which public support schemes and bank lending activities could keep non-viable firms afloat for longer. There are several examples […]

Nature’s locus standi: Taking the Environment to Court

With institutions, both public and private, defining the functioning of major world economies, we have come a long way from the early days of industrialization to extensive urban development and technical advancement. In this developmental process, vital players in the economy seem to have neglected the importance of safeguarding the natural environment. Actions of individuals, […]

Peer-Level Analyst Transitions

Relying on peer-effects theory in the labor economics and management literature, we examine whether peer effects exist among regular (non-star) sell-side financial analysts, who represent the majority of employees in the sell-side industry (Mas and Moretti 2009; Chan, Li, and Pierce 2014). Research in organizational behavior and applied psychology research suggests that lateral relationships are linked […]

The half-hidden paternalism of disclosure mandates: Have we gone too far?

The unravelling principle is one of the most influential concepts in financial reporting theory. The principle examines the problem of a seller aware of material facts that may be reported to the buyers or withheld for greater gain. In the classic market for lemons, George Akerlof observed that lack of transparency may cause markets to […]

Do Extreme Weather Events Alter Investors’ Support for the Environment?

Dramatic images showing icebergs melting, global warming-related avalanches, and destructive landslides and wildfires caused by extreme weather events are now commonplace in news broadcasts. It is no surprise then that climate change-related corporate proposals have increased steadily in recent years, reflecting growing investor demand for corporate accountability around this issue. Given such a stance, what […]