Publications
Sustainability or Performance? Ratings and Fund Managers' Incentives (with Mariassunta Giannetti and Rachel Li)
Journal of Financial Economics 155, May 2024
*Best Paper Award, 2022 China International Conference in Finance
*Semi-finalist for the Best Paper Award, 2021 FMA Conference
*Featured on the United Nations’ Principles for Responsible Investment (PRI) blog (visit link)
CEO Succession Roulette (with Dragana Cvijanovic and Rachel Li)
Management Science 69(10), 5794-5815, October 2023
*Featured on the Columbia Law School's Blog on Corporations and the Capital Markets (CLS Blue Sky Blog) (link)
Does Money Talk? Divestitures and Corporate Environmental and Social Policies (with Mariassunta Giannetti and Rachel Li)
Review of Finance 26(6), 1469-1508, November 2022
*Previously titled Does Money Talk? Market Discipline through Selloffs and Boycotts
*Seminalist for the Best Paper Award at the 2020 FMA Conference
*Featured on the Harvard Law School Forum on Corporate Governance and Financial Regulation (visit link), VoxEU.org (visit link) and the World Economic Forum (visit link)
The Costs and Benefits of Shareholder Democracy: Gadflies and Low-Cost Activism (with Mariassunta Giannetti)
Review of Financial Studies 34(12), 5629-75, December 2021
*Featured on the Oxford Business Law Blog (link) and referenced in The Washington Post article on the newly-adopted SEC shareholder rule (link)
*Cited in the U.S. Securities and Exchange Commission (SEC)'s public announcement of the revised procedures for submitting shareholder proposals (link)
Activism and Empire Building (with Merih Sevilir and Anil Shivdasani)
Journal of Financial Economics 138(2), 526-548, November 2020
*Featured on the Harvard Law School Forum on Corporate Governance and Financial Regulation (link)
Governance under the Gun: Spillover Effects of Hedge Fund Activism (with Oleg Gredil and Pab Jotikasthira)
Review of Finance 23(6), Editor's Choice Lead Article, October 2019
*Finalist for the Pagano and Zechner Prize for Best Non-Investments Paper in the Review of Finance
*Featured on the Review of Finance Managing Editor's Blog (link) and on the Harvard Law School Forum on Corporate Governance and Financial Regulation (link)
Institutional Trading and Hedge Fund Activism (with Pab Jotikasthira)
Management Science 64(6), 2930-50, June 2018
*Previously titled Hedge Fund Activists: Do They Take Cues from Institutional Exit?
Activism Mergers (with Nicole M. Boyson and Anil Shivdasani)
Journal of Financial Economics 126(1), 54-73, October 2017
*Featured on the Harvard Law School Forum on Corporate Governance and Financial Regulation (link)
Does Shareholder Coordination Matter? Evidence from Private Placements (with Indraneel Chakraborty)
Journal of Financial Economics 108(1), 213-230, April 2013
The Costs of Shareholder Activism: Evidence from a Sequential Decision Model
Journal of Financial Economics 107(3), 610-631, March 2013
Working Papers
The Role of Social Value in Contracting (with Jim Goldman and Shu Zhang), September 2024
Using over 1.25 million procurement contracts valued at over $250 billion, we study how contractors’ environmental and social (E&S) performance influences contract terms. Our findings show that E&S incidents lead to an 11-13% reduction in the amounts and a 12-14% decrease in the duration of new contracts. Additionally, contracts of poor E&S performers are 31% less likely to be renegotiated, and if renegotiated, are granted less favorable changes in amounts and durations than firms with clean E&S records. This suggests that firms with poor E&S performance are more rigorously monitored and penalized rather than given contract modifications to accommodate heightened E&S risks.
Beyond ESG: Executive Pay Metrics and Shareholder Support (with Mariassunta Giannetti and Marcus Hober), October 2024
We document that executive compensation contracts feature a multitude of market, earnings, operating, and ESG metrics and that the increase in ESG metrics has been accompanied by a higher propensity to use operating metrics. These developments are particularly pronounced in companies with volatile returns and new active blockholders, including activist hedge funds and private equity investors. Compensation metrics do not appear to have a large effect on actual payouts to executives and on the sensitivity of pay to market, earnings, and ESG performance, but rather aim to create consensus among shareholders on the proposed pay and the overall corporate strategy.
Divest to Acquire (with Sridhar Arcot and Merih Sevilir), March 2020
Are divestitures only an ex-post reactive correction of past inefficient acquisitions or are they also an ex-ante proactive strategy to enhance the value of future acquisitions? We find support for the latter. Firms engaging in divestitures before making acquisitions obtain higher abnormal returns, especially in large acquisitions. These findings are not explained by management turnover or activist targeting. We provide evidence that the 'divest to acquire' motive ensures better performance of subsequent acquisitions and argue that divestitures and acquisitions are both critical components of a proactive approach to creating shareholder value.
Business School Networks and VC-backed Startups (with Ye Cai and Merih Sevilir), March 2016
This paper is the first to study the role of business school education in the creation and success of venture capital (VC) backed startup firms. Using a large new dataset of the educational backgrounds of entrepreneurial founders and executives and detailed data on business school rankings, we find that (i) almost a quarter of VC-backed startups over 1990-2010 are launched by founders with formal business education and two-thirds of startups have an executive with a business school degree, (ii) VC-backed startups experience better exit outcomes when their executive teams include MBA graduates, and (iii) startups are significantly more likely to retain a founder with an MBA as a post-IPO CEO. Consistent with a networking mechanism, 29% of VC-backed startups have at least two executives from the same business school, and 13% of startups have at least one executive and one VC director from the same business school. Such startups with connected executives are significantly more likely to successfully exit through an IPO or an acquisition. Overall, our findings provide evidence on the role of business schools in promoting the formation of professional networks and the acquisition of skills important for launching a successful startup.