PEER-REVIEWED PUBLICATIONS

Capital Gains Tax, Venture Capital and Innovation in Start-ups (with S. Eswar), Review of Finance, 2022, 1-49.

Abstract: We examine the effect of staggered changes in state-level capital gains tax rates on Venture Capital (VC)-backed start-ups and show that an increase in tax rates reduces patent quantity and quality. The results are consistent with a reduction in VC incentives to provide effort: VC-level tax increases lead to incrementally lower patent production by start-ups not linked by a direct flight to the VC investor. VCs also influence and decrease the level of risk-taking in start-ups, and decrease the likelihood of the start-ups going public. We also find evidence of a change in entrepreneurs' incentives: after a tax decrease, entrepreneurs increase innovation risk.

  • Shortlisted: The 2024 Review of Finance “Pagano - Zechner Award”

Perverse Incentives of Special Purpose Acquisition Companies, the "Poor Man's Private Equity Funds", Journal of Accounting and Economics, 63 (1), 2017, 99-120.

  • Press Coverage: Private Equity Findings, U.K..

  • Press Coverage: FD Magazine, the Netherlands.  

Family Control and Dilution in Mergers (with N. Basu and I. Paeglis), Journal of Banking and Finance, 33 (5), 2009, 829-841.

NON-PEER REVIEWED PUBLICATIONS

Special Purpose Acquisition Companies (with M. Fong), Forthcoming In: Cumming, D., Hammer, B. (eds) The Palgrave Encyclopedia of Private Equity. Palgrave Macmillan, Cham. 2023.

WORKING PAPERS

Executive Visibility: A Worthwhile Investment or a Futile Pursuit? (with M. Fong).

Abstract: We introduce a novel measure of executive visibility and demonstrate its influence in attracting retail investors to Special Purpose Acquisition Companies (SPACs). Visible executives raise larger SPACs in less time and garner greater investor interest at merger announcement compared to those less visible. Retail investors actively trade based on executive visibility, perceiving it as a signal of SPAC quality. Their decisions are guided by institutional investors who, equipped with early access to SPACs and leveraging retail investors’ biases, sell their shares to their less sophisticated counterparts and secure a well-timed exit prior to merger completion.

  • Press Coverage: Columbia Law School’s Blog on Corporations and the Capital Markets, U.S.A..  

Does Financial Innovation Lead to Real Innovation? Evidence from Financial Derivatives (with S. Eswar).

Abstract: We investigate whether financial innovation, specifically the use of foreign exchange (FX) derivative products, spurs firms’ technological innovation, measured with patent-based metrics. Using a quasi-exogenous shock that reduces the cost of using FX derivatives and varying FX equity exposure of firms, we find that increased utilization of FX derivatives results in higher patent production. The primary mechanism driving this relationship is the reduction in financial constraints and enhanced risk management. The effect is especially pronounced for firms facing difficulties in raising equity capital. Our results indicate that the use of FX derivatives boosts innovative output by improving firms’ ability to raise equity capital, thereby increasing R&D investment, rather than by increasing risk-taking.  

Lobbying and FDA Drug Approval (with S. Eswar and J. Gonzalez-Uribe).

Strategic Acquisitions by Corporate Venture Capital  Investors.

  • Coller Institute of Private Equity Runner-up PhD Prize.

Monitoring Effects in Acquisitions of Private Companies.

WORK IN PROGRESS

FinTech under COVID-19: A step forward or survival of the fittest? (with M.Cara and H. Jiang).

Corporate Venture Capital and Productivity in Pharmaceutical-Biotechnology Companies (with J. Gonzalez-Uribe).