Other

Anti-Poaching Agreements, Innovation, and Corporate Value: Evidence from the Technology Industry

(with Daniel Ferrés and Gaurav Kankanhalli)

Revise and Resubmit, American Economic Review

The U.S. Department of Justice initiated antitrust action in 2010 against several major Silicon Valley technology firms for engaging in anti-poaching agreements. Under the period of labor market collusion, cartel firms displayed elevated job posting rates in roles critical to their innovative activity and depressed inventor departure rates relative to comparable non-cartel firms. Accordingly, cartel firms produced superior innovation output over the collusive period, particularly in technology areas covered by the collusive agreements, while the dissolution of the agreements was accompanied by a reversal of this trend. Event-study tests around the unanticipated antitrust action show a negative returns response. Our results reveal important linkages between reduced employee turnover arising from firms’ anti-competitive conduct in labor markets and their innovation, performance, and market valuations.

Corporate Liquidity under Basel III: The Credit Line Channel

The Basel III Liquidity Coverage Ratio (LCR) rule imposed unprecedented liquidity requirements on banks. I show that the regulation curtails banks’ ability to originate credit lines, with banks seeking to pass on increased maintenance costs to borrowers. I introduce novel metrics drawn from a machine learning analysis of contractual agreements and demonstrate that banks retain greater control in credit lines. The result is a decline in credit line origination and a market that is unfavorable to borrowers. Financially unconstrained firms drive borrowing declines and turn to debt-financed cash for corporate liquidity, rendering them riskier. My results are novel in revealing changes to corporate liquidity preferences and risk profiles when intermediation is costly.

Loan-Funded Loans: Asset-Like Liabilities Inside Bank Holding Companies

(with Jennie Bai and Murillo Campello)

Leveraging novel data on internal capital flows between Bank Holding Companies (BHCs) and their subsidiaries, we examine the role of internal loans in commercial bank activity over the last three decades. These loans function as asset-like liabilities, offering banks access to a stable, low-cost funding source compared to demand deposits. Banks with access to internal loans lend more aggressively in the syndicated loan market: they issue more loans, featuring larger amounts, longer maturities, and lower interest rates. These banks also more frequently build relationships with new borrowers. While loan-funded loans can underperform, their overall impact on BHC performance is positive.