Abstract Previous studies of the effect of ridesharing on traffic fatalities have yielded inconsistent conclusions. We revisit this question using proprietary data from Uber measuring monthly rideshare activity at the Census tract level. We find a consistent negative effect of ridesharing on traffic fatalities, with impacts concentrated during nights and weekends. Our results imply that ridesharing has decreased U.S. traffic fatalities by 5.2% in areas where it operates. The annual life-saving benefits are $6.8 billion. Back-of-the-envelope calculations suggest that these benefits are of similar magnitude to producer surplus captured by Uber shareholders or consumer surplus captured by Uber riders.

Abstract Numerous trading strategies examined in options research exhibit remarkably high mean returns and Sharpe ratios. We show some of these seemingly “good deals” are due to look-ahead biases. These biases stem from using information unavailable at the portfolio formation time to filter out observations suspected of being noisy or erroneous. Our results suggest that elevated Sharpe ratios may serve as potential indicators of such look-ahead biases. Furthermore, deviating from previous literature findings, we show that illiquidity is not strongly priced in stock options and that only a small set of stock characteristics are in fact associated with option expected returns. (JEL G12, G14, G17)

Abstract Aid fragmentation—the simultaneous operation of multiple development agencies in one setting—has long raised concerns about coordination challenges and opportunities for corruption. Leveraging unique data on project delivery in Afghanistan, we present the first microlevel empirical analysis of aid fragmentation. We find that aid delivered by a single donor can significantly reduce corruption. Projects delivered under conditions of aid fragmentation, by contrast, can facilitate corruption. We find evidence for a theoretical mechanism linking infrastructure and physical goods with waste and leakage. Our results clarify the policy losses tied to fragmentation, yielding insights for combating misappropriation of aid.

Abstract This article empirically studies the effects of the early law and economics movement on the U.S. judiciary. We focus on the Manne Economics Institute for Federal Judges, an intensive economics course that trained almost half of federal judges between 1976 and 1999. Using the universe of published opinions in U.S. Circuit Courts and 1 million District Court criminal sentencing decisions, we estimate the within-judge effect of Manne program attendance. Selection into attendance was limited, as the program was popular among judges of all backgrounds, frequently oversubscribed, and admitted participants on a first-come, first-served basis. We find that after attending economics training, participating judges use more economics language in their opinions, rule against regulatory agencies more often, and impose more severe criminal sentences. We argue that economics, as a rigorous social science, was especially effective in persuading judges.

Abstract Regulators of new products confront a trade-off between speeding a product to market and collecting additional product quality information. The FDA's Breakthrough Therapy Designation (BTD) provides an opportunity to understand if regulators can use new policy to innovate around this trade-off. We find that the BTD program shortened clinical development times by 23% and did not affect the ex post safety profile of drugs with the designation. The BTD program had the greatest impact on less experienced firms and reduced clinical trial design complexity. The results suggest that targeted regulatory innovation can shorten R&D periods without compromising product quality.

ABSTRACT We examine whether mandatory tax information exchange agreements between governments have real effects on firms’ physical trade in tangible goods. We posit that some of the physical trade in tangible goods flowing through low-tax jurisdictions is intended to facilitate income shifting. As such, shocks to enforcement via mandatory information exchange agreements could cause firms to change the physical flow of goods. Using firm-level shipping container data, we find that adoption of bilateral tax information exchange agreements (TIEAs) between the U.S. and foreign jurisdictions is associated with significant decreases in the volume of imports by U.S. firms from those jurisdictions. We also find reallocation effects: U.S. firms increase imports from jurisdictions in the same subregion as the treated jurisdiction, resulting in minimal overall change in total imports. To our knowledge, ours is the first study to document a connection among enforcement-related tax disclosure, income shifting, and physical trade flows. Data Availability: The data used in this study are available from the sources cited in the paper. JEL Classifications: F14; F18; F23; H25; H26.

ABSTRACT This paper examines whether U.S. domestic firms’ investment decisions are affected by their expectations of market leaders’ tax-motivated income shifting. Market leaders’ financial reports can help peers evaluate industry conditions and potential investment payoffs, but income shifting obscures the geographic source of profits and reduces the informativeness of these disclosures. Thus, when peers expect that leaders shift income, they face greater uncertainty about the outcomes of their own investments. Consistent with the theory of investment under uncertainty, we find that U.S. domestic firms are less responsive to investment opportunities as expectations of leaders’ shifting increase. This reduced responsiveness is concentrated among firms facing higher investment irreversibility and those whose market leaders provide less transparent geographic disclosures. Our findings identify a novel spillover cost of income shifting and suggest that policies enhancing the transparency of multinational firms’ geographic reporting or constraining income shifting could help improve domestic firms’ investment decisions.

ABSTRACT Pay gaps, like gender or racial gaps, violate the widely held belief that employees should receive equal pay for equal work. This study examines whether a common control choice—framing pay raise budgets in percentages—contributes to perpetuating pay gaps. We predict that when the pay raise budget is framed as a percentage (the percentage frame), it inadvertently nudges managers to anchor individual raises on that budget percentage, thereby impounding prior salaries, and thus, existing inequities, into pay raises. We further predict that framing the pay raise budget as an absolute amount (the dollar frame) can un-nudge this behavior. As expected, we find in two experiments that the dollar frame perpetuates pay gaps less than the percentage frame, and that this difference is robust to varying levels of ambiguity about the source of salary differences. Our study examines a simple, cost-effective way to limit the perpetuation of pay gaps. Data Availability: Contact the authors. JEL Classifications: D91; J16; J31; J71; M40; M52.

ABSTRACT Recruiting talent is a major issue for the accounting profession and is especially salient for small firms with limited resources and brand recognition. In this study, we examine the challenges small accounting firms face when recruiting from universities and the strategies they use to overcome them. Drawing on interviews with 34 stakeholders (primarily recruiting specialists and human resource managers), we develop a process model of small-firm recruiting and present evidence related to each phase: (1) targeting certain universities and students, (2) engaging in university recruiting activities, (3) extending offers, and (4) aiming to evaluate recruiting outcomes. Guided by theory, our findings reveal that small accounting firms develop organizational familiarity and image with students while navigating fatalism and balancing imitation and differentiation in their recruiting strategies. We conclude with a call to reconsider the “biggest is best” assumptions that dominate mainstream accounting research and provide suggestions for future research. Data Availability: Data were obtained from interviews. JEL Classifications: M41; M42; M51.