Innovation: The Bright Side of Common Ownership?<\/a><\/strong> (with Florian Ederer<\/a>, Mireia Gin\u00e9<\/a> and Martin Schmalz<\/a>). We show that common ownership (i.e., investors holding sizeable ownership stakes in several companies in the same or in related industries) has different implications for innovation depending on technology and product market spillovers.<\/span> Common Ownership, Competition, and Top Management Incentives<\/a><\/strong>\u00a0(with\u00a0Florian Ederer<\/a>,\u00a0Mireia Gin\u00e9<\/a>\u00a0and\u00a0Martin Schmalz<\/a>).\u00a0We show that common ownership (i.e., investors holding sizeable ownership stakes in several companies in the same or in related industries) may dampen the performance-sensitivity of CEO Pay.<\/span> Mergers and Acquisitions under Common Ownership<\/a><\/strong>\u00a0(with\u00a0Florian Ederer<\/a>,\u00a0Mireia Gin\u00e9<\/a>\u00a0and\u00a0Bruno Pellegrino<\/a>).\u00a0We show that mergers increasingly occur between firms that sell similar products and share the same set of owners. We also show that effects of mergers on profits, consumer surplus and total surplus are substantial even when firms internalize common ownership before mergers occur.<\/span> Beyond the Target: M&A Decisions and Rival Ownership<\/a><\/strong> (with Jose Azar<\/a>, Mireia Gin\u00e9<\/a> and Luca Lin<\/a>). <\/a>Common Ownership increases the profitability of horizontal mergers not only due to their ownership stakes in the target, but also due to their stakes in non-merging rival firms.<\/span> The Mutual Friend: Dual Holder Monitoring and Firm Investment Efficiency<\/a> <\/strong>(with Luca Lin<\/a>). Dual holders mitigate firm overinvestment, because their incentives as debt and equity holders are more aligned.<\/span> Dealing with Dealers: Sovereign CDS Comovements in Europe<\/a><\/strong> (with Sergio Mayordomo<\/a> and Mar\u00eda Rodr\u00edguez-Moreno<\/a>). Commonality in the quotes that dealers give for Sovereign European CDS is a powerful predictor of cross-sectional variation in CDS return correlation.<\/span> Connected Stocks<\/strong><\/a> (with Christopher Polk<\/a>). Stocks connected through the same owners exhibit higher return correlation. A trading strategy based on these connections yields annual alpha of 7%.<\/span> Good for One, Bad for All: Determinants of Indivitual versus Systemic Risk<\/strong><\/a> (with Germ\u00e1n L\u00f3pez-Espinosa<\/a>, Antonio Rubia<\/a>, and Laura Valderrama<\/a>). Trading activities within a bank are good for the bank’s solvency, but bad for all, because it amplifies systemic risk. We also find that unstable funding is the main factor driving systemic risk.<\/span> Does Common Ownership Increase Incentives for Mergers and Acquisitions?<\/strong><\/a> (with Jose Azar<\/a>, Mireia Gine<\/a>, and Luca X. Lin<\/a>). Diversified acquirer shareholders can profit from value-destroying acquisitions not only through their target stakes, but also through their stakes in non-merging rival firms.<\/span> Research: Index Funds Are Fueling Out-of-Whack CEO Pay Packages<\/a><\/strong> (with Florian Ederer<\/a>, Mireia Gine<\/a>, and Martin Schmalz<\/a>). Common ownership may lead to less performance-sensitive compensation packages.<\/span> Best Ideas<\/strong><\/a> (with Randy Cohen<\/a> and Christopher Polk<\/a>). The best ideas of fund managers consistently outperform the benchmark.<\/span> Local Human Capital and Innovation Spillovers<\/a><\/strong>\u00a0(with Liudmila Alekseeva<\/a>). Local human capital has different intensity effects in urban areas depending on the strength of technological and product market spillovers. Acquisitions, Common Ownership, and the Cournot Merger Paradox<\/a><\/strong>\u00a0(with Jose Azar<\/a>, Mireia Gin\u00e9<\/a> and Luca Lin<\/a>). We extend the theory of mergers under a symmetric Cournot game to allow for common ownership, and show that there are two conflicting effects on the incentive to merge.<\/span> Common Ownership and Relative Performance Evaluation<\/a><\/strong>\u00a0(with\u00a0Florian Ederer<\/a>,\u00a0Mireia Gin\u00e9<\/a>\u00a0and\u00a0Martin Schmalz<\/a>).\u00a0We show theoretically and empirically that executives are paid less for their own firm’s performance and more for their rivals’ performance if an industry’s firm are more commonly owned by the same set of investors.\u00a0<\/span> Comovement: Evidence from the CDS Market<\/a><\/strong>\u00a0(with Dan Bergstresser<\/a>). We show that there is excess comovement in the CDS market caused by common dealers.
\n–<\/span> – Media: Harvard Law School Forum on Corporate Governance.<\/a>
\n–<\/span> – Granted a 2018 NBER Innovation Small Grant.
\n–<\/span> – Presented at the 2017 NBER Productivity, Innovation, and Entrepreneurship Conference, Boston.<\/a>
\nManagement Science<\/strong><\/em>, forthcoming 2024.<\/p>\n
\n–<\/span> – Winner of the 2024 Jerry S. Cohen Memorial Fund Writing Award by the American Antitrust Institute.<\/a>
\n–<\/span> – Winner of the 2023 Research Excellence Award by IESE Alumni Association.<\/a>
\n–<\/span> – Winner of the 2017 Oliver E. Williamson Best Conference Paper Award, SIOE, Columbia University.<\/a>
\n–<\/span> – Winner of the 2016 First Research Prize, Fundacion Estudios Financieros<\/a>
\n–<\/span> – Media: The Economist<\/a>,\u00a0Bloomberg<\/a>,\u00a0Equitable Growth<\/a>,\u00a0Yale Insights<\/a>,\u00a0Harvard Law School Forum on Corporate Governance<\/a>,\u00a0ProMarket<\/a>,\u00a0Harvard Business Review.<\/a>
\nJournal of Political Economy<\/strong><\/em>, 2023, Vol. 131, No. 5.<\/p>\n
\nAEA Papers & Proceedings<\/strong><\/em>, 2023, Vol. 113.<\/p>\n
\n–<\/span> – Media: Matt Levine blog in Bloomberg.<\/a>
\nJournal of Financial Economics<\/em><\/strong>, 2022, Volume 144, Issue 1.<\/p>\n
\nReview of Corporate Finance Studies<\/em><\/strong>, 2020, Vol 9, Issue 1, 81-115.<\/p>\n
\n–<\/span> – Winner of the 2014 First Research Prize, Fundacion Estudios Financieros<\/a>.
\n–<\/span> – Winner of the 2013 UAM-Accenture Prize in Financial Innovation<\/a>.
\n–<\/span> – Non-technical summary<\/a>.
\nJournal of Banking and Finance,<\/em><\/strong> 2018, Vol 90, 96-112.<\/p>\n
\n–<\/span> – Nominee for the Smith-Breeden Prize for the Best Paper in the Journal of Finance, 2014.
\nJournal of Finance, <\/strong><\/em>2014, \u00a0Vol 69, 1099-1127.<\/p>\n
\nJournal of Financial Stability, <\/strong><\/em>2013, Vol 9, 287-299.<\/p>\nNon-Refereed Publications<\/strong><\/h2>\n
\nCompetition Policy International, <\/em><\/strong>2019, May 21.<\/p>\n
\nHarvard Business Review,\u00a0<\/em><\/strong>2016, October 18.<\/p>\nWorking Papers<\/strong><\/h2>\n
\nWorking Paper<\/strong><\/em>, 2021 March. Under review.<\/p>\n
\nWorking Paper<\/strong><\/em>, 2020.<\/p>\n
\nWorking Paper<\/strong><\/em>, 2019 August.<\/p>\n
\n–<\/span> – \u00a0Coverage by HLS CorpGov<\/a>,\u00a0ProMarket (1)<\/a>,\u00a0ProMarket (2)<\/a>, Bloomberg<\/a>,\u00a0Equitable Growth<\/a>.
\nWorking Paper<\/strong><\/em>, 2016 August.<\/p>\n
\nWorking Paper<\/strong><\/em>, 2013.<\/p>\n