Corporate Finance, Political Economy, Labor Economics, Corporate Governance.
1. “Partisan Gerrymandering, Congressional Polarization, and Distributive Politics” with Sahil Raina (An earlier version of this project focusing on SBA lending was presented at the Paris December Finance Meeting 2019, ASU Sonoran Winter Finance Conference 2020, Finance Down Under 2020, Northeastern Finance Conference 2020, Western Finance Association Meeting 2020, European Finance Association Meeting 2020)
Prior attempts to link gerrymandering to incumbency advantage and political polarization overlook an important strategic nuance: a partisan gerrymanderer has an interest in “attacking” vulnerable incumbents of the opposing party while “protecting” vulnerable incumbents from its own party. Tracking incumbents in the U.S. House of Representatives before and after redistricting, we show that a narrow loss for the gerrymandering party’s candidate in the pre-redistricting election predicts greater incumbent vulnerability in the post-redistricting election relative to a narrow win for the gerrymandering party’s candidate. We develop a simple model to show that elected politicians who lose partisan support will compensate by changing their optimal mix of partisan positioning and individual effort. We test the model’s predictions using the discontinuity in incumbency advantage predicted by partisan gerrymandering, and find that incumbents weakened by gerrymandering are indeed less partisan in their congressional voting behavior and bring more discretionary federal spending to their districts.
2. “Skilled Labor Rationing, Hiring Uncertainty, and Corporate Investment: Evidence from H-1B Visa Application Deadlines” (Based on an earlier project presented at SFS Cavalcade 2017, NFA 2017, AFA 2018)
I study how access to skilled foreign workers affects corporate investments through a) an ex-post rationing channel, and b) an ex-ante uncertainty channel. First, I exploit a temporal discontinuity in firms’ ability to apply for work visas for skilled foreign hires, and find that ex-post rationing of visas leads to lower capital expenditures. These effects are concentrated in tight labor markets, which suggests that skilled immigrants help mitigate labor market frictions, and in firms seeking to fill lower-wage positions, which suggests that foreign labor facilitates investment by being cheaper than domestic substitutes. Second, using the historical distribution of immigrants to identify ex-ante exposure to visa supply shocks, I find that exposed firms periodically delay investment until hiring uncertainty is resolved. Consistent with models of irreversible investment, these cyclical patterns are concentrated in firms using less redeployable capital.
3. “Politics and Hidden Borrowing: Electoral Cycles and State Defined Benefit Pension Plans” (Job Market Paper, Presented at WFA 2017, Awarded WFA Cubist Systematic Strategies Ph.D. Candidate Award)
I investigate how political incentives affect the policies of public-sector defined benefit (DB) pension plans in the United States. Incumbent Governors with discretion over state DB pension plan policies can borrow through the public pension system in a non-transparent manner by lowering contributions or raising benefits. In election year, the Governor faces the incentive to incur higher “pension deficits” in order to finance policies that improve his/her re-election chances. I document that such pension deficits are systematically higher in the final year of an election cycle, driven largely by election year decreases in governmental contributions. To formalize the intuition behind my findings, I present a stylized principal-agent model in which the key friction is temporary information asymmetry between incumbent politicians and voters regarding public pension policy. Consistent with the model’s predictions, the empirically documented electoral cycle pattern in pension deficits is stronger for pension plans that are more opaque and when gubernatorial elections are more closely contested. I also conduct falsification tests using private-sector DB pension plans in order to rule out alternative explanations for my findings.
Work in Progress
“Financializing the Fourth Estate: The Civic Effects of Private Equity Newspaper Ownership” (with Sahil Raina and Yusuke Tsujimoto)
“The Real Effects of Unfunded Public Pension Plan Liabilities“