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Associate Professor (with tenure)
Smith School of Business, University of Maryland Affiliations: NBER, CEPR, Labor and Finance, FinTech@Cornell Initiative Research Interests
Corporate Finance, Innovation and Entrepreneurship, Labor and Finance |
About my Research
My research is at the juncture of finance, innovation, and labor. I study the drivers of innovation, entrepreneurship and technological change and their economic impact on firms, workers, and broader society.
The AI in Finance Conference: Opportunities and Risks
Call for Papers for the AI in Finance Conference! Following a successful inaugural conference on AI in Finance in 2024, we are excited to host our next AI in Finance conference on June 10, 2025, at the University of Maryland's Smith School of Business. Submit a paper by February 1, 2025 here:
https://sites.google.com/view/ai-finance-conference-2025
My research is at the juncture of finance, innovation, and labor. I study the drivers of innovation, entrepreneurship and technological change and their economic impact on firms, workers, and broader society.
The AI in Finance Conference: Opportunities and Risks
Call for Papers for the AI in Finance Conference! Following a successful inaugural conference on AI in Finance in 2024, we are excited to host our next AI in Finance conference on June 10, 2025, at the University of Maryland's Smith School of Business. Submit a paper by February 1, 2025 here:
https://sites.google.com/view/ai-finance-conference-2025
Publications (including Forthcoming and Accepted)
10. Customer Data Access and Fintech Entry: Early Evidence from Open Banking. The Journal of Financial Economics 2025, with Saleem Bahaj, Greg Buchak, Filippo De Marco, Angus Foulis, Will Gornall, Francesco Mazzola, Tong Yu
- AFA; NY Fed Fintech Conference; UTD Finance Conference; EFA; NFA; NBER SI Corporate Finance; NBER Economics of Privacy Conference; UBC Winter Finance Conference; Barcelona Summer Forum; FIRS; Esade Spring Workshop(Barcelona); Entrepreneurship and Innovation at Nova SBE; HEC Workshop on Entrepreneurship; OCC Conference; NFA; Rome Junior Finance Conference; UBC Winter Finance Conference; Columbia; Erasmus University in Rotterdam; Cheung Kong Graduate School of Business; HEC Lausanne; Maastricht University; NYU WAPFIN (Women Assistant Professors in Finance); Stanford; Stockholm School of Economics; UBC; Universidad Carlos III de Madrid; USC; Wharton; NYU, MIT, OSU
- Open banking (OB) empowers bank customers to share transaction data with fintechs and other banks. 49 countries have adopted OB policies. Consumer trust in fintechs predicts OB policy adoption and adoption spurs investment in fintechs. UK microdata shows that OB enables: i) consumers to access both financial advice and credit; ii) SMEs to establish new fintech lending relationships. In a calibrated model, OB universally improves welfare through entry and product improvements when used for advice. When used for credit, OB promotes entry and competition by reducing adverse selection, but higher prices for costlier or privacy-conscious consumers partially offset these benefits.
9. IPOs, Human Capital, and Labor Reallocation. The Journal of Financial and Quantitative Analysis 2025, with Paige Ouimet and Rebecca Zarutskie
- AFA; NBER Entrepreneurship; Texas Finance Festival; Dartmouth PE and Entrepreneurship conference; SFS Finance Cavalcade; Changing Role of Stock Markets in Capital Formation - NYU; Annual Meetings of the Society of Labor Economics; Darden & Cambridge Judge Entrepreneurship and Innovation Research Conference
- We examine the human capital of IPO-filing firms and how going public affects their labor force. IPO-filing firms have high average wages and limited industrial diversification. Moreover, we document that a successful IPO increases departures of high-skilled employees to startups and diversification though employment growth in non-core industries. While IPOs do not significantly affect earnings growth of pre-IPO workers, post-IPO hires receive larger earnings increases upon joining. These results are most consistent with agency mechanisms associated with the transition to public ownership. Overall, going public has significant implications for the firms’ overall labor force, the firm, and labor reallocation.
8. Friends during Hard Times: Evidence from the Great Depression. The Journal of Financial and Quantitative Analysis 2024, with Diego Garcia and Geoff Tate
- AEA; Corporate Finance Conference (Wash-U); EFA; LBS Summer Finance Symposium; FIRS; Financial Institutions, Regulation & Corporate Governance (FIRCG) Conference; Spring Finance Conference at the UT-Dallas
- Using a novel dataset of over 3500 public and private firms, we construct the network of firm connections through executives and directors on the eve of the 1929 financial market crash. We find that more connected firms have 17% higher 10-year survival rates on average. Consistent with a role in facilitating access to working capital, the results are particularly strong for small firms, private firms, cash-poor firms, and firms located in counties with high bank suspension rates during the crisis. Moreover, connections to cash-rich firms that increase their accounts receivable during the peak of the crisis are most important for survival. Our results suggest that network connections can play a stabilizing role during a financial crisis by easing the flow of capital to constrained firms.
7. Artificial Intelligence, Firm Growth, and Product Innovation. The Journal of Financial Economics 2024, with Anastassia Fedyk, Alex He, James Hodson
- The most cited paper published in 2024 in the top three finance journals: Journal of Financial Economics, Review of Financial Studies, and Journal of Finance
- NBER Economics of AI; EFA; AFA; NBER Corporate Finance; NBER SI Macroeconomics and Productivity; NBER Innovation Data; NBER productivity seminar; Federal Reserve Digitization Collab Week; FIRS; FOM Conference; Labor and Finance Group Conference; Society of Labor Economics; Society for Economic Dynamics; Northwestern; NYU; WashU; Emory; NY Fed Atlanta; Federal Reserve Digitization Collab Week; Richmond Federal Conference “Secular Trends in Macroeconomics and Firm Dynamics”; Tulane; Georgia State University; Michigan State University; University of Oklahoma; Triangle Macro-Finance Workshop; Tilburg University; Triangle Macro-Finance Workshop; Queen Mary University of London; AFFECT; NYU WAPFIN (Women Assistant Professors in Finance); UNC Junior Roundtable; Sao Paulo School of Economics; UC Berkeley; University of Illinois Chicago; University of Maryland; Vienna Graduate School of Finance; Frontiers in Economics for Ukraine; Colloquium on The Peril and Promise of Artificial Intelligence (AI) for Corporations
- We study the use and economic impact of artificial intelligence (AI) technologies among U.S. firms. We propose a new measure of firm-level AI investments, using a unique combination of detailed worker resume and job postings datasets. Our measure reveals a stark increase in AI investments across sectors in the last decade. AI-investing firms see higher growth in sales, employment, and market valuations. We use a novel identification strategy, instrumenting firm-level AI investments with firms' ex-ante exposure, based on alumni networks, to the supply of AI-skilled labor from universities historically strong in AI research. The positive growth effect of AI comes primarily through increased product innovation, reflected in trademarks, product patents, and updates to product portfolios. AI-powered growth concentrates among the ex-ante largest firms, leading to higher industry concentration and reinforcing winner-take-most dynamics. Our results highlight that new technologies can contribute to growth through product innovation.
6. Firm Investments in Artificial Intelligence Technologies and Changes in Workforce Composition. The NBER Volume on Technology, Productivity, and Economic Growth, with Anastassia Fedyk, Alex He, James Hodson
- WFA; AEA; NBER CRIW Conference on Technology, Productivity, and Economic Growth; Labor and Finance Conference; Stanford University Digital Innovation Lab; Federal Reserve Digitization Collab Week; Richmond Federal Conference “Secular Trends in Macroeconomics and Firm Dynamics”; the Jozef Stefan Institute Artificial Intelligence Lab; Yeshiva University
- We study the shifts in U.S. firms’ workforce composition and organization associated with the use of AI technologies. To do so, we leverage a unique combination of worker resume and job postings datasets to measure firm-level AI investments and workforce composition variables, such as educational attainment, specialization, and hierarchy. We document that firms with higher initial shares of highly-educated workers and STEM workers invest more in AI. As firms invest in AI, they tend to transition to more educated workforces, with higher shares of workers with undergraduate and graduate degrees, and more specialization in STEM fields and IT and analysis skills. Furthermore, AI investments are associated with a flattening of the firms’ hierarchical structure, with significant increases in the share of workers at the junior level and decreases in shares of workers in middle-management and senior roles. Overall, our results highlight that adoption of AI technologies is associated with significant reorganization of firms’ workforces.
5. Entrepreneurial Spillovers from Corporate R&D. The Journal of Labor Economics 2024, with Sabrina Howell
- Honorable Mention, Yuki Arai Faculty Research Prize for Finance, 2018
- AEA; WFA; NBER Corporate Finance; Five-Star NYU; Stanford Financing of Innovation Summit; LBS Summer Symposium; UW Summer Finance Conference; Yale Junior Conference; WFA-AFFECT; Junior Entrepreneurial Finance and Innovation Workshop
- This paper offers the first study of how changes in corporate R&D investment affect labor mobility. We document that increases in firm R&D have no measurable effect on employee mobility to other incumbent firms or on exit from employment, but do spur employee departures to join the founding teams of startups. These startups are more likely to be outside the R&D-investing employer’s industry, suggesting that the ideas moving via employees to startups would impose diversification costs on the parent. These startups also likely generate substantial spillover benefits, as they are more likely to be VC-backed, high-tech, and high-wage.
4. Cutting the Innovation Engine: How Federal Funding Shocks Affect University Patenting, Entrepreneurship, and Publications. The Quarterly Journal of Economics 2023, with Alex Xi He, Sabrina Howell, Elisabeth Perlman, Joseph Staudt
- NYU Stern Yuki Arai Faculty Award for Best Paper in Finance 2020
- AEA; NBER Productivity, Innovation and Entrepreneurship; NBER SI Science of Science Program; NBER SI Labor/Education; NBER productivity seminar; Barcelona Summer Forum; MIT; NYU; Virtual Finance in the Cloud Conference; NSF SI Future of IP conference; APPAM, EPFL Innovation Seminar; the AIEA Seminar series; SEA; Berkley Finance Group; Berkley Innovation/Entrepreneurship; Duke
- This paper studies how federal funding affects the innovation outputs of university researchers. We link person-level research grants from 22 universities to patents, publications, and career outcomes from the U.S. Census Bureau. We focus on the effects of large, idiosyncratic, and temporary cuts to federal funding in a researcher’s pre-existing narrow field of study. Using an event study design, we document that these negative federal funding shocks reduce high-tech entrepreneurship and publications, but increase patenting. The lost publications tend to be higher quality and more basic, while the additional patents tend to be lower quality, less general, and more often privately assigned. These federal funding cuts lead to an increase in private funding, which partially compensates for the decline in federal funding. Together with evidence from industry-university contracts, the results suggest that federal funding cuts shift university research funding from federal to private sources and lead to innovation outputs that are less openly accessible and more often appropriated by corporate funders.
3. Financial Disruptions and the Organization of Innovation: Evidence from the Great Depression.
The Review of Financial Studies 2023, with Asaf Bernstein and Filippo Mezzanotti
- Lead Article & Editor's Choice. Earlier version of this project received the Best Paper Award from the China International Conference in Finance (CICF)
- This paper was previously titled "Crisis Innovation"; Online Appendix A; Online Appendix B
- AFA; WFA; EFA; NBER Productivity, Innovation and Entrepreneurship; NBER SI American History; Barcelona Summer Forum; IMF 4th Annual Macro-Financial Research Conference; FIRS; the WEFI; 2020 Virtual Economic History Seminar; Hass School of Business; Stanford University; Northwestern University Economic History Festival; University of Virginia; WFA (AFFECT); Labor and Finance conference in Chicago; Michigan State University Conference; Minnesota junior conference; HEC Entrepreneurship Conference; UT Dallas Conference; University of Auburn; University of Colorado; the Third Junior Entrepreneurial Finance and Innovation Workshop; the HKUST Finance seminar; Owen Graduate School of Management; Rutgers University; the Tuck School of Business
- We examine innovation after the Great Depression using data on a century’s worth of U.S. patents and a difference-in-differences design that exploits regional variation in the severity of the economic crisis. Harder-hit areas experienced large and persistent declines in independent patenting, which lasted for the next 70 years. This decline was larger for young and inexperienced inventors and lower-quality patents. In contrast, large firms had relative innovation increases, especially for inventors with the largest declines in independent patenting. Overall, the Great Depression contributed to the decline in technological entrepreneurship and accelerated the shift of innovation into larger firms.
2. Heterogeneous Taxes and Limited Risk Sharing: Evidence from Municipal Bonds. The Review of Financial Studies 2021, with Pab Jotikasthira, Chris Lundblad, and Tarun Ramadorai
- James A. Lebenthal Memorial Prize for Best Paper at the Fourth Annual Municipal Finance Conference
- AFA; EFA; Brandeis Municipal Finance Conference; Adam Smith Workshops in Asset Pricing and Corporate Finance; SFS Finance Cavalcade; Cornell University; Federal Reserve Board; Georgetown University; George Washington University; Georgia State University; Hong Kong University of Science and Technology; Lehigh University; London Business School; Ohio State University; Rice University; Southern Methodist University; University of Georgia; University of Houston; University of Nebraska; UNC; University of Rochester; University of Washington; Virginia Tech
- We evaluate the impacts of tax policy on asset returns using the U.S. municipal bond market. In theory, tax-induced ownership segmentation limits risk-sharing, creating downward-sloping regions of the aggregate demand curve for the asset. In the data, cross-state variation in tax privilege policies predicts differences in in-state ownership of local municipal bonds; the policies create incentives for concentrated local ownership. High tax privilege states have muni bond yields that are more sensitive to variations in supply and local idiosyncratic risk. The effects are stronger when local investors face correlated background risk and/or diminishing marginal non-pecuniary benefits from holding local assets.
1. Destructive Creation at Work: How Financial Distress Spurs Entrepreneurship (Online Appendix). The Review of Financial Studies 2020
- AFA; EFA; Tel Aviv Finance Conference; Economics of Entrepreneurship and Innovation Conference; Mitsui Labor and Finance Symposium; Finance, Organizations & Markets Conference (FOM); Columbia Macro Lunch; Annual Meetings of the Society of Labor Economics (SOLE); Labor and Finance Group meeting; selected for presentation at the Colorado Finance Summit/PhD session; Carnegie-Mellon University; Berkeley; Columbia; Cornell; Federal Reserve Board, Georgetown; Ohio State; Stanford; University of Colorado; University of Maryland; University of Minnesota; University of North Carolina; University of Texas-Dallas; University of Toronto
- Using U.S. Census firm-worker data, I document that firms' financial distress has an economically important effect on employee departures to entrepreneurship. The impact is amplified in the high-tech and service sectors, where employees are key assets. In states with enforceable noncompete contracts, the effect is mitigated. Compared to typical entrepreneurs, distress-driven entrepreneurs are high-wage workers who found better firms, as measured by jobs, pay, and survival. Startup jobs compensate for 33% of job losses at the constrained incumbents. Overall, the financial inability of incumbent firms to pursue productive opportunities increases the reallocation of economic activity into new firms.
Working Papers
4. Artificial Intelligence and Firms' Systematic Risk, with Anastassia Fedyk, Alex He, James Hodson
- Arizona State University, Central European University, Columbia University's Women Applied Micro Seminar, European Central Bank, Frankfurt School of Finance, MIT Initiative on the Digital Economy Seminar, IMF-WIFPR Conference on Financial and Real Implications of Technologies, AI, and Cyber Risks, NBER Productivity, Innovation, and Entrepreneurship Meeting, UC Berkeley, UC Irvine, University of Delaware, University of Southern California, University of Toronto, Webinar on Applied Machine Learning, Economics, and Data Science (AMLEDS), and Wharton AI and the Future of Work Conference
- We leverage comprehensive data on firm-level AI investments to examine how firms' systematic risk changes with the advent of artificial intelligence (AI) during the 2010s. Firms that invest more in AI see increases in their systematic risk, measured by equity market beta. This result is unique to AI: robotics, IT, organizational capital, and general R&D investments do not display similar results during the sample period. We show that the increased market beta of AI-investing firms is not explained by financial or operating leverage, asynchronous trading, increased correlation with the tech sector, within industry concentration, or correlated investor flows. Instead, our results are consistent with AI investments creating new growth options for firms: AI-investing firms become more growth-like, and the effect on market betas is twice larger on the market upside than on the downside. Overall, our findings provide direct evidence that firms' investments in new technologies such as AI create growth options and affect the composition of the firms' risk profiles.
3. The Impact of Money in Politics on Labor and Capital: Evidence from Citizens United v. FEC, with Pat Akey, Greg Buchak, Ana-Maria Tenekedjieva
- WFA; Jackson Hole; AFA; EFA; MFA; CICF; WFA (AFFECT); ASU; Labor and Finance Online Seminars; Columbia Women Economists Seminar series; Erasmus University in Rotterdam; Entrepreneurship Junior Group Online Seminars; Maastricht University; University of Bristol; University of Lugano; University of Luxembourg; Stanford; UBC; University of South Carolina
- We examine whether corporate money in politics benefits or hurts labor using the 2010 Supreme Court ruling Citizens United, which rendered bans on political election spending unconstitutional. In difference-in-difference analyses, affected states experience increases in both capital and labor income relative to unaffected states. We find evidence consistent with increased political spending spurring political competition and the adoption of pro-growth policies. These policies benefit a broader set of constituents as we find a broad-based increase in labor income. Affected states see increased political turnover and reduced regulatory burdens. The economic effects are stronger among ex-ante politically inactive and younger firms.
2. Antitrust Enforcement Increases Economic Activity, with Simcha Barkai, Jessica Jeffers, Ezra Karger, and Ekaterina Volkova
- FIRN Brattle Best Paper Award
- NBER SI CRIW; AEA; EFA; Labor and Finance conference; the NYU WAPFIN Conference; Junior Entrepreneurial Finance/Innovation Lunch Group; Columbia Women Economists Seminar series
- We hand-collect and standardize information describing all 3,055 antitrust lawsuits brought by the Department of Justice (DOJ) between 1971 and 2018. Using restricted establishment-level microdata from the U.S. Census, we compare the economic outcomes of a non-tradable industry in states targeted by DOJ antitrust lawsuits to outcomes of the same industry in other states that were not targeted. We document that DOJ antitrust enforcement actions permanently increase employment by 5.4% and business formation by 4.1%. Using an event-study design, we find (1) a sharp increase in payroll that exceeds the increase in employment, meaning that DOJ antitrust enforcement increases average wages, (2) an economically smaller increase in sales that is statistically insignificant, and (3) a precise increase in the labor share. While we cannot separately measure the quantity and price of output, the increase in production inputs (employment), together with a proportionally smaller increase in sales, strongly suggests that these DOJ antitrust enforcement actions increase the quantity of output and simultaneously decrease the price of output. Our results show that government antitrust enforcement leads to persistently higher levels of economic activity in targeted industries.
1. Pay, Employment, and Dynamics of Young Firms, with Wenting Ma, Chris Moser, Paige Ouimet, Rebecca Zarutskie
- AEA; AFA; Mitsui Labor and Finance Symposium; 24th SOLE Annual Meeting; the 2018 Columbia Junior Entrepreneurship and Innovation Workshop; the 2018 UNC Kenan Institute Frontiers of Entrepreneurship Conference; the 14th Annual FIRS Finance Conference; Columbia Junior Micro Macro Labor Conference; 4th Rome Junior Finance Conference
- Why do young firms pay less? Using confidential microdata from the US Census Bureau, we find lower earnings among workers at young firms. However, we argue that such measurement is likely subject to worker and firm selection. Exploiting the two-sided panel nature of the data to control for relevant dimensions of worker and firm heterogeneity, we uncover a positive and significant young-firm pay premium. Furthermore, we show that worker selection at firm birth is related to future firm dynamics, including survival and growth. We tie our empirical findings to a simple model of pay, employment, and dynamics of young firms.
Policy Work on Russian Full-scale Invasion of Ukraine
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1. Russian Oil Exports under International Sanctions, with Benjamin Hilgenstock, Oleg Itskhoki, Maxim Mironov, Elina Ribakova, Natalia Shapoval
- We use a unique, comprehensive transactions-level dataset on Russian exports to evaluate the impact of international sanctions—focusing on crude oil and oil products. Relying on data through the first quarter of 2023, we find that the sanctions coalition’s strategy to keep Russian oil on the global market, while restricting the country’s export earnings and fiscal revenues, is showing results. Importantly, global oil prices did not increase since the taking-effect of the EU embargo on crude oil on December 5, 2022—a key concern of some coalition governments. Rather, discounts on Russian crude oil exports widened considerably in segments of the market, where demand conditions changed due to the exit of European buyers. Russian crude oil and oil product exports, in value terms, fell by $15.6 billion in 2023Q1 vs. 2022Q4 and account for 40% of the total decline in goods exports. We estimate contributions of 6.1 billion from smaller volumes, $4.2 billion from lower global prices, as well as $5.2 billion from wider discounts. At the same time, 2023Q1 budget revenues from hydrocarbons came in 47% below the previous quarter. Even so, our findings also point to violations of the price cap and underscore the urgent need for more rigorous enforcement. Specifically, export prices at the critical Pacific Ocean port of Kozmino stood at around $73/barrel in 2023Q1—with 96% of volumes sold above the $60/barrel threshold—, while a substantial share of shipments continues to involve Western-owned or –insured vessels. Based on our analysis, we conclude that a critical focus of sanctions policy going forward should be the enforcement of existing sanctions on Russian oil.
2. Assessing the Impact of International Sanctions on Russian Oil Exports , with Benjamin Hilgenstock, Oleg Itskhoki, Maxim Mironov, Elina Ribakova
- We use a unique high-frequency Russian customs dataset to evaluate the impact of international sanctions on Russia – focusing on Russian crude oil and oil products exports, as they are the key sources of export earnings and government revenues. We study the effects of two focal sanctions measures – the EU embargo and G7 price cap on Russian seaborne crude oil, which both took effect on December 5, 2022. We find that Russia was able to redirect crude oil exports from Europe to alternative markets such as India, China, and Turkey but that export earnings were curbed substantially by the sizable discounts that Russian exporters had to accept in market segments where the impeding EU embargo lowered demand, e.g., exports from Baltic Sea ports – a dynamic that only became more pronounced after the embargo and price cap’s taking effect. However, we do not find crude oil discounts as large as those reflected in Urals prices towards the end of 2022. In particular, prices in market segments that are unaffected by lower European demand, e.g., exports from Russia’s Pacific Ocean ports, have not dropped in a meaningful way and shipments do not appear to comply with the price cap. What the EU embargo and G7 price cap have, thus, triggered is a fundamental fragmentation of the market for Russian crude oil. Based on our analysis, we conclude that a central focus of policy going forward should be the enforcement of existing sanctions on Russian oil – along with the lowering of the oil price cap. As far as oil products are concerned, we show that it is significantly less feasible to redirect exports away from the European market. This suggests that the EU embargo on oil products, which took effect on February 5, 2023, will prove to be a powerful additional tool to further curb Russian export and fiscal revenues.