Behind the Corporate Veil: How Business Groups Arbitrage ESG Disclosure Mandates
We examine how ESG disclosure mandates introduced in the headquarters countries of business groups affect the ESG performance of both parent companies...
Talk and the City: How Far to Trust Bankers (Not) Calling for Bailouts?
To evaluate a bank’s resilience to financial stress, authorities often rely on private information from a peer institution, or counterparty. This...
The Tragedy of Complexity
Complexity can create value. At the same time, understanding more complex goods requires more of an agent’s attention. We show that equilibrium...
Forecasting Crashes with a Smile
We derive option-implied bounds on the probability of a crash in an individual stock, and argue a priori that the lower bound should be close to the...
Artificial intelligence and financial crises
The rapid adoption of artificial intelligence (AI) poses new and poorly understood threats to financial stability. We use a game-theoretic model to...
Shadow Banks on the Rise: Evidence Across Market Segments
This paper uses credit bureau data on 648 million retail loans in India to examine the comparative advantages of shadow banks across market segments...
The Structure of Leveraged Buyouts and the Free-Rider Problem
We study the structure of public firm buyouts in a model that features both the Berle-Means problem (lack of incentives) and the Grossman-Hart problem...
Polarization, Purpose and Profit
We present a model in which firms compete for workers who value nonpecuniary job attributes, such as purpose, sustainability, political stances, or...
Marketwide Memory
We propose a novel measure that allows us to study memory associations in financial markets over the course of several decades. Using our measure, we...
Bond Supply, Yield Drifts, and Liquidity Provision Before Macroeconomic Announcements
UK government bond yields tend to rise in a two-day window before labor market data releases and monetary policy news. This effect, particularly...
Causal Narratives
We study causal narratives – narratives which describe a (potentially incorrect) causal relationship between variables. In a series of experiments...
Arbitrage Networks
This paper studies the general equilibrium implications of arbitrage trades in segmented financial markets. Arbitrageurs choose a category of trades...
When Private Firms Provide Public Goods: The Allocation of CSR Spending
This paper studies how firms allocate their Corporate Social Responsibility (CSR) expenditures to inform the welfare effects of corporate...
Financial instability transition under heterogeneous investments and portfolio diversification
We analyze the stability of financial investment networks, where financial institutions hold overlapping portfolios of assets. We consider the effect...
Corporate Social Responsibility Committee: International Evidence
We provide worldwide large-sample evidence of a recent innovation in corporate governance: the voluntary creation of a separate board committee to...
Private Companies: The Missing Link on The Path to Net Zero
A global consensus is growing on the contribution that corporations and finance must make towards the net-zero transition in line with the Paris...
