We examine the impact of institutional democracy on firm value through the lens of dividend policies. Using instrumental variables, we find strong evidence that democracy improves dividends in an international sample of 18,410 unique firms across 63 countries over the 1991–2018 period. This effect is more pronounced for firms with high agency costs, or those in countries with weak legal protection for shareholders. Our evidence is robust to alternative measures of democracy and a battery of tests addressing the challenges associated with the instruments. Furthermore, dividends are capitalized at a higher rate in more democratic countries, especially for firms with high growth options. To the extent that investors are willing to pay a premium for firms that distribute more dividends, the democracy-induced dividends add to corporate value beyond the premium associated with shareholder rights-induced dividends. Overall, our results highlight that institutional democracy is an important, yet unexplored, determinant of corporate valuation.

The 2009 CARD Act limited credit card lenders' ability to raise borrowers' interest rates on the basis of new information. Pricing became less responsive to public and private signals of borrowers' risk and demand characteristics, and price dispersion fell by one‐third. I estimate the efficiency and distributional effects of this shift toward more pooled pricing. Prices fell for high‐risk and price‐inelastic consumers, but prices rose elsewhere in the market and newly exceeded willingness to pay for over 30% of the safest subprime borrowers. On net, average traded prices fell and consumer surplus rose at all credit scores. Higher consumer surplus was partly driven by a fall in lender profits, and partly by the Act's insurance value to borrowers who could retain favorable pricing after adverse changes to their default risk. The relatively high level of pre‐CARD‐Act markups was crucial for realizing these surplus gains.

We study the removal of information from a market, such as a job-applicant screening tool. We characterize how removal harms groups with relative advantage in that information: typically those for whom the banned information is most precise relative to alternative signals. We illustrate this using recent bans on employers’ use of credit report data. Bans decrease job-finding rates for Black job-seekers by 3 percentage points and increase involuntary separations for Black new hires by 4 percentage points, primarily because other screening tools, such as interviews, have around 60% higher standard deviation of signal noise for Black relative to white job-seekers.

This paper investigates how investors’ abnormal attention affects the cross-section of cryptocurrency returns in the period from 2018 to 2022. We capture abnormal attention using the (log) number of Twitter posts on individual cryptocurrencies on the current day minus a 30-day average. Our results reveal that abnormal attention is positively associated with contemporaneous and one-day ahead crypto performance. Among the different Twitter tweets, return predictability arises due to Ticker-tweets from investors, but not due to tweets from the cryptocurrency channel. These Official-tweets, however, are able to forecast technological innovations on the blockchain.

We hypothesize that managers use their hierarchical role as reviewers of accounting judgments and estimates to manage earnings, which we call indirect earnings management (IEM). Across a series of experiments using highly experienced financial executives as participants, we provide evidence that IEM (1) is likely used by managers to achieve current and future earnings targets, (2) reduces both cognitive dissonance associated with managing earnings and the extent to which managers think that their behaviors constitute earnings management, and (3) is more likely to be used when corporate governance is strong than when corporate governance is weak. The results of this study suggest new directions for future research on earnings management and highlight the important role of the hierarchical structure of the accounting function in efforts to understand how earnings are managed.

Using VAR and Local Projections models, enhanced with macroeconomic factors and monetary policy shocks, we investigate the underlying mechanisms through which the Fed’s and ECB’s react to bank reactions of geopolitical risks between January 1994 and March 2024. Our findings reveal that central banks react to geopolitical risk events by tightening monetary policy to fend off potential inflationary pressures. However, the effect is often temporary, as policymakers typically adopt accommodative measures during economic expansions and shift to tighter policies during contractions. Analyzing reactions based on central bank presidents' tenures, we find that while earlier responses were limited, in recent years, both central banks have reacted more strongly and immediately, reflecting their growing concern over geopolitical risks. Furthermore, we document that the Fed adopted a more accommodative stance in response to bilateral geopolitical risk shocks between the US and China, driven by changes in capital flows and trade activities. In contrast, the ECB’s responses were more consistently contractionary, particularly in periods of heightened inflation concerns or when geopolitical tensions threatened price stability within the euro area.

We develop a model of competition in prices and infrastructure among mobile network operators. Although consolidation increases market power, it can lead to more efficient data transmission due to economies of scale, which we derive from physical principles. After estimating our model with French consumer and infrastructure data, equilibrium simulations reveal that while prices decrease with the number of firms, so do download speeds. Our framework also allows us to quantify the impact of spectrum allocation. The marginal social value of spectrum exceeds firms’ willingness to pay in our model as well as observed prices in spectrum auctions.

We explore information spillovers and cross-monitoring between the stock and loan markets, focusing on the roles of short sellers and banks. Using Regulation SHO that directly affects short-selling constraints in the stock market but is exogenous to the loan market, we find that only those firms without bank monitors exhibit significant stock price declines upon the announcement of SHO. We also document that while short interest increases following SHO, it increases far less for firms with bank monitors. Using bank and lending relationship characteristics, we find SHO returns increase in the bank's ability and incentive to monitor. Our exploration of equity ownership structure reveals that the presence of block holders and dedicated owners has little to no effect on our results, suggesting that bank monitors complement shareholder monitoring efforts.

We study markup cyclicality in a granular macroeconomic model with oligopolistic competition. We first characterize how firm, sectoral, and aggregate markups comove with output at different levels of aggregation in response to firm-level shocks. We quantify the model’s ability to reproduce salient features of the cyclical properties of measured markups in French administrative firm-level data from the bottom (firm) level to the aggregate level. We document that (i) firm-level markups rise with market share and sector-level markups with concentration, (ii) the relationship between markups and sectoral output varies by firm size—negative for small firms but positive for large ones, (iii) sector-level markups move positively with sectoral output, and (iv) sectoral markups show no systematic relationship with aggregate output. Our model helps rationalize these seemingly conflicting patterns of markup cyclicality in the data.