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Working Paper
Net Income Measurement, Investor Inattention, and Firm Decisions
When investors have limited attention, does the way in which net income is measured matter for firm value and firms’ resource allocation decisions? This paper uses the Accounting Standards Update (ASU) 2016-01, which requires public firms to incorporate changes in unrealized gains and losses (UGL) on equity securities into net income, to answer this question. We build a model with risk-averse investors who can be attentive or inattentive and managers who choose how much to invest in financial assets to maximize firms’ stock prices. The model predicts that, with inattentive investors, ...
Working Paper
Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs
We study immigrant founders of venture-capital backed firms using a new and detailed data set that we assemble on the backgrounds of founders. Immigrant founders have been critical to the entrepreneurial ecosystem, accounting for roughly 20% of all venture capital-backed founders over the past 30 years. We document the channels through which immigrant founders arrive in the United States and how those channels have changed over time. Higher education has served as the primary entry channel for immigrant founders. The share of foreign-educated immigrant founders who initially arrive for work ...
Working Paper
The Age Gap in Mortgage Access
This paper uses data on millions of single-borrower mortgage applications to study the relationship between applicant age and mortgage application outcomes. Conditional on a rich set of applicant, property, and loan characteristics, mortgage refinance applications submitted by older borrowers are associated with higher rejection probabilities. This pattern holds within lender and across loan types. Rejection probability increases smoothly with age and accelerates in old age. The acceleration is slower for female applicants. Inability to maintain properties may contribute as older applicants ...
Working Paper
Bond Insurance and Public Sector Employment
This paper uses a unique data set of local governments’ bond issuance, expenditure, and employment to study the impact of the monoline insurance industry’s demise on local governments’ operations. To show causality, I use an instrumental variable approach that exploits persistent insurance relationships and the cross-sectional variation in insurers’ exposure to high-quality residential mortgage-backed securities. Governments associated with ailing insurers issued less debt, cut expenditures, and hired fewer workers. These effects are persistent. Partial equilibrium calculations show ...
Working Paper
The Age Gap in Mortgage Access
This paper uses data on millions of single-borrower mortgage applications to study the relationship between applicant age and mortgage application outcomes. Conditional on a rich set of applicant, property, and loan characteristics, mortgage refinance applications submitted by older borrowers are associated with higher rejection probabilities. This pattern holds within lender and across loan types. Rejection probability increases smoothly with age and accelerates in old age. The acceleration is slower for female applicants. Inability to maintain properties may contribute as older applicants ...