Working Papers

These papers are working drafts of research which often appear in final form in academic journals. The published versions may differ from the working versions provided here.

Rebecca Lester, Lisa De Simone, Aneesh Raghunandan
November 6, 2019

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We examine the association between thousands of state and local firm-specific tax subsidies and business activity in the surrounding county, measured as the number of employees, aggregate wages, per capita employment,...

Susan Athey, Guido W. Imbens, Mohsen Bayati
November 2019

Experimentation has become an increasingly prevalent tool for guiding policy choices, firm decisions, and product innovation. A common hurdle in designing experiments is the lack of statistical power. In this paper, we study optimal multi-period...

Bar Light, Gabriel Weintraub
October 26, 2019

The standard solution concept for stochastic games is Markov perfect equilibrium (MPE); however, its computation becomes intractable as the number of players increases. Instead, we consider mean field equilibrium (MFE) that has been popularized in...

Benjamin Hébert, Michael Woodford
October 21, 2019

Decisions take time, and the time taken to reach a decision is likely to be informative about the cost of more precise judgments. We formalize this insight in the context of a dynamic rational inattention...

Mark J. Garmaise, Yaron Levi, Hanno Lustig
October 17, 2019

We show that household consumption displays excess sensitivity to salient macro-economic news. When the announced local unemployment rate reaches a 12-month maximum, local consumers in that area reduce discretionary spending by 2% relative to consumers...

Zhengyang Jiang, Hanno Lustig, Stijn Van Nieuwerburgh, Mindy Z. Xiaolan
October 10, 2019

The market value of outstanding government debt reflects the expected present discounted value of current and future primary surpluses. When the discount rate is consistent with the term structure of interest rates and equity prices...

Joshua D. Rauh, Ryan Shyu
October 8, 2019

Drawing on the universe of California income tax filings and the variation imposed by a 2012 tax increase of up to 3 percentage points for high-income households, we present new findings about the effects of...

Charles M. C. Lee, Yuanyu Qu, Tao Shen
October 2019

We study firms that go public through reverse mergers (RMs) versus initial public offerings (IPOs) in China. Using a manually assembled data set, we show...

Brandon Gipper, Luzi Hail, Christian Leuz
October 2019

We provide the first partner tenure and mandatory rotation analysis for a large cross-section of U.S. publicly listed firms over an extended period. We analyze the effects on audit quality as well as on audit...

Anqi Li, Davin Raiha, Ken Shotts
October 2019

We develop a model of electoral accountability in the presence of mainstream and alternative media outlets. In addition to standard high and low competence types, the incumbent may be an aspiring autocrat, who controls the...

Lisa De Simone, Marcel Olbert
October 2019

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We investigate the effects of mandatory private Country-by-Country (CbC) disclosure to European tax authorities on economic activity. Using rich data on the operations of multinational firms, we exploit the threshold-based application...

Benjamin Hébert, Jennifer La'O...
September 26, 2019

This paper analyzes equilibria and efficiency in a class of economies (large games) that feature incomplete information, strategic interaction, and endogenous information acquisition, with beauty contests as a leading example. We adopt the rational inattention...

Navdeep S. Sahni, Charles Zhang
September 26, 2019

We analyze a large-scale field experiment conducted on a US search engine in which 3.3 million users were randomized into seeing more, or less advertising. Our data rejects that users are, overall, averse to search...

Zhengyang Jiang, Arvind Krishnamurthy, Hanno Lustig
September 24, 2019

US monetary policy has an outsized impact on the world economy, a phenomenon that Rey (2013) dubs the global financial cycle. Changes in the US dollar also have an outsized impact on the world economy,...

Min Lui, László Pólos, Michael T. Hannan
September 6, 2019

This paper deals with a central challenge in organizational sociology: to predict adaptive capabilities in changing environments. We address theoretical and methodological gaps in existing research. First, whereas researchers have long acknowledged that the evolution...

Li Chen, Hau L. Lee
September 4, 2019

Responsible supply chain is about ensuring that members of the supply chain are responsible for the well-being of the people and mother earth. There are both the environmental responsibility side and the social responsibility side....

Eduardo Davila, Benjamin Hébert
September 2019

We study optimal corporate taxation when firms are financially constrained. We describe a corporate taxation principle: taxes should be levied on unconstrained firms, which value resources inside the firm less than constrained firms. Under complete...

Jess Benhabib, Jesse Perla, Christopher Tonetti
September 2019

We study how innovation and technology diffusion interact to endogenously determine the shape of the productivity distribution and generate aggregate growth. We model firms that choose to innovate, adopt technology, or produce with their existing...

Lisa De Simone, Ken Klassen, Jeri Seidman
September 2019

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Do firms balance tax and operating considerations when making investment decisions? We investigate whether income-shifting aggressiveness affects new investments and predict firms that aggressively shift income will choose affiliate-level investments driven...

Susan Athey, Guido W. Imbens, Jonas Metzger, Evan Munro
September 2019

Researchers often use artificial data to assess the performance of new econometric methods. In many cases the data generating processes used in these Monte Carlo studies do not resemble real data sets and instead reflect...