(with Murillo Campello and Gaurav Kankanhalli)
Journal of Financial and Quantitative Analysis 59, no. 4 (2024): 1541–85.
Big data on job postings reveal multiple facets of the impact of Covid-19 on corporate hiring. Firms disproportionately cut new hiring for high-skill positions, with financially constrained firms reducing skilled hiring the most. Applying machine learning methods to job-ad texts, we find that firms have skewed their hiring towards operationally-core functions. New positions display greater flexibility regarding schedules and tasks. While job posting levels show signs of recovery starting in late-2020, changes to job descriptions and skill profiles persist through early-2022. Financial constraints amplify these changes, with constrained firms’ new hires witnessing greater adjustments to job roles and employment arrangements.
(with Daniel Ferrés and Gaurav Kankanhalli)
Revise and Resubmit, American Economic Review
The U.S. Department of Justice initiated antitrust action in 2010 against several major Silicon Valley technology firms for engaging in anti-poaching agreements. Under the period of labor market collusion, cartel firms displayed elevated job posting rates in roles critical to their innovative activity and depressed inventor departure rates relative to comparable non-cartel firms. Accordingly, cartel firms produced superior innovation output over the collusive period, particularly in technology areas covered by the collusive agreements, while the dissolution of the agreements was accompanied by a reversal of this trend. Event-study tests around the unanticipated antitrust action show a negative returns response. Our results reveal important linkages between reduced employee turnover arising from firms’ anti-competitive conduct in labor markets and their innovation, performance, and market valuations.
(with Jennie Bai and Murillo Campello)
Leveraging regulatory data on fund flows within bank holding companies (BHCs), we characterize internal loans as a critical funding source for commercial banks. Although recorded as bank liabilities, parent-to-bank internal loans function as contingent support that resembles capital. We show that internal-loan funded banks do not hoard liquidity; instead, they originate larger and longer-maturity loans at lower spreads, initiate more relationships with marginal borrowers, and retain larger shares in syndicated deals. Internal-loan-funded lending is followed by higher short-run profits but higher future nonperforming loan ratios. We further show that organizational structure shapes internal lending: in BHCs with both bank and nonbank operations, nonbank affiliates crowd out internal lending to banks and discipline banks’ use of internal funds, and these BHCs exhibit higher overall performance. To identify our tests, we exploit the passage of the Gramm–Leach–Bliley Act and the announcement of the Basel III Accord, using instrumental variables and discontinuity-design approaches. Our findings highlight an equity-like internal debt channel that shapes monetary policy transmission, risk-taking, and the role of organizational structure in banking.