Research Interests

• Corporate Finance: Debt structure, Risk management (hedging), Government subsidies

• Financial Markets: Stock price informativeness, Real effects of financial markets

Working Paper

[1] Risk Management and the Choice between Secured and Unsecured Debt: Evidence from Natural Experiment (Job Market Paper)

Abstract: I study whether and how corporate hedging affects firms’ choice between secured and unsecured debt. Exploiting the introduction of steel futures as a natural experiment, I provide causal evidence that risk management enables firms to switch from secured to unsecured debt without sacrificing the total amount of debt they can employ. Consistent with the causal interpretation of my estimates, the effects are stronger for firms that are more likely to engage in financial hedging, that derive relatively less benefit or face higher costs from employing secured debt, and that are less financially healthy but with some collateral capacity for financial hedging. To the extent that secured debt financing is associated with a loss of operating flexibility or future financing slack for borrowing firms, my findings suggest a potential channel through which risk management increases firm value that could be masked when heterogeneous debt types are treated uniformly.

Presented at: SFA (2023; Best Paper Award in Corporate Finance), FMA (2023; Semifinalist - Best Paper Award in Corporate Finance), Eastern FA (2022), SWFA (2022), University of Kentucky (2021)

[2] Stock Price Informativeness and Debt Heterogeneity 

Abstract: I document that stock price informativeness (SPI) affects capital structure decisions, leading to increased debt heterogeneity. A battery of tests including a quasi-natural experiment supports a causal interpretation. Cross-sectional evidence reveals that the relation is stronger for firms with higher expected costs of financial distress and with a higher degree of information asymmetry, consistent with the notion that the reduction in distress costs and alleviation of information asymmetry are the main mechanisms behind the observed positive relation between SPI and debt heterogeneity.

Presented at: MFA (2024, scheduled), SFA (2023), FMA Doctoral Consortium (2023), University of Kentucky (2023), SWFA (2023)

[3] Government Subsidies and the Choice between Bank and Public Debt

Abstract: How do government subsidies affect firms’ capital structure? I find that subsidized firms shift their debt financing structure toward more public debt and away from bank debt. These key findings are robust to alternative regression model specification and hold under propensity score-matched and entropy-balanced samples as well as an IV approach exploiting changes in powerful congressional committee chairmanships. Cross-sectional tests reveal that the documented effect of government subsidies on the shift toward public debt is amplified among firms with better governance, severe information asymmetry, and more positive political sentiment, consistent with the notion that enhanced external scrutiny and increased perceived credibility stemming from endorsement effects diminish the need for traditional monitoring and informational roles of bank debt.

Presented at: SWFA (2024, scheduled)

Work in Progress

[1] Local Firm Payout and Municipal Financing

Data collection & preliminary analysis stage