Following the 2023–2024 Tokyo Stock Exchange (TSE) capital-efficiency initiative, investors favored low price-to-book (PBR) firms, particularly those with high return on equity (ROE). These effects are concentrated among persistently undervalued firms, increase smoothly with the degree of undervaluation rather than jumping at the regulatory threshold, and are robust to endogenous treatment assignment. Although firms’ value-enhancing plans were already publicly available in corporate governance reports, the TSE’s consolidated compliance list triggered strong market reactions, consistent with a salient informational event. We find no short-run improvements in realized profitability or upward revisions in analyst earnings forecasts, but significant declines in illiquidity and increases in valuation ratios among low-PBR firms. We also find little evidence of a persistent “price-of-shame” mechanism or strong industry-level spillovers, although spillovers through non-industry links cannot be fully ruled out. Overall, the evidence suggests that the reform primarily triggered investor-side repricing of chronic undervaluation rather than immediate changes in firm behavior.

I examine how mandatory position disclosure of claimholders’ economic interests affects Chapter 11 bankruptcy outcomes. Exploiting a regulation that increased disclosure by creditors and equityholders on certain committees, I find that position disclosure is associated with a decrease in the length of bankruptcy cases, especially the duration of negotiations between claimholders across classes. Further, I show that position disclosure is associated with lower post-bankruptcy recidivism. Contrary to the concerns expressed by critics, I find little evidence that position disclosure reduced claimholders’ participation in committees or decreased trading in the market for bankruptcy claims. My findings highlight the overall benefits of position disclosure in facilitating negotiations during bankruptcy. Data Availability: Data are available from the public sources cited in the text.

Despite the growing use of subjective performance incentives used in executive bonuses, empirical evidence on their effectiveness remains inconclusive. This study explores three aspects of subjective metrics in bonus plan design: their prevalence, the goals they target, and their impact on managerial behavior and firm outcomes. First, I document 53.8 percent of CEO bonus plans include at least one subjective performance measure, and among these plans, an average of 38.9 percent of total bonus weight is allocated to these measures. Using machine learning, I show subjective metrics target incentives related to employees, firm culture, and executive performance. Second, using the Tax Cuts and Jobs Act as a quasi-exogenous shock to contract design, I find firms increase the number and weight of subjective metrics by 22.9 percent and 10.4 percent, respectively. Finally, I find the increasing prevalence of subjective performance measures positively influences CEO effort, corporate culture, and innovation. Data Availability: The data used in this study are from public sources and available upon request.

We investigate the efficiency of a market relative to a non-market institution—an auction relative to a quota—as allocation mechanisms in the presence of frictions. We use data from water markets in southeastern Spain and explore a specific change in the institutions to allocate water. On the one hand, frictions arose because poor farmers were liquidity constrained. On the other hand, farmers who were part of the wealthy elite were not liquidity constrained. We estimate a structural dynamic demand model by taking advantage of the fact that water demand for both types of farmers is determined by the technological constraint imposed by the crop’s production function. This approach allows us to differentiate liquidity constraints from unobserved heterogeneity. We show that the institutional change from an auction to a quota increased total efficiency for the farmers considered. Welfare increased by 23.4 real pesetas per farmer per tree, a 6 % increase in total production relative to the market.

We classify the race of over 160,000 U.S. founders and investors and study the venture capital (VC) funding gap for Black entrepreneurs. Only 3.1% of VC‐funded startups are Black‐owned, and they raise half as much VC funding as others. We attribute much of this gap to Black founders having fewer traditional success markers, like patents or entrepreneurial experience. This disparity also affects matching: Black VC partners invest more in Black founders, and these investments have higher successful exit rates. We attribute this outperformance to lower information asymmetries due to network overlap and “screening discrimination,” whereby Black VCs better differentiate among Black founders.

Nonprofit organizations rely on donations from large competitive marketplaces to provide key social service goods. Most research focuses on competition in output markets without considering philanthropic markets where nonprofits make decisions about how much effort to put into fundraising. We develop and estimate a model that highlights the strategic nature of fundraising, showing that rival NP’s fundraising responses can be strategic complements or substitutes. We find evidence of strategic substitutes. NPs demonstrate nontrivial strategic responses to rival’s fundraising and, in totality, the across sector impacts are important to consider. Counterfactual exercises show that reducing competition decreases equilibrium fundraising levels.

Regulators around the world have begun to require investment companies to provide information regarding fossil fuel investments to external stakeholders. In this paper we examine whether such disclosures impact the investment portfolios and/or investment policies of the disclosing firms. Using a 2016 California disclosure mandate that required some U.S. insurance companies to disclose their fossil fuel investments on a public website, we find the disclosing insurers reduced their fossil fuel investments by approximately 20 % relative to the non-disclosers. Despite this on-average result, we note significant variation in changes to investment portfolios. We find insurers pressured by external stakeholders, including public shareholders and environmental activists, are more likely to divest. In contrast, enhanced Californian regulatory oversight power is unrelated to divesture. Even after the disclosure mandate is reversed, we find the disclosing insurers do not revert to their pre-policy holdings of fossil fuel investments, suggesting the impact created a longer-term change in investment behavior.