(JOB MARKET PAPER) Who Wins and Who Loses when Firms Stay Private Longer? [draft] 

Abstract: What are the consequences for public investors and private firms from the listing gap? To answer this, I develop a dynamic model of firm entry and exit from public markets relating benefits from being public to firm characteristics. I find public investors would have little change in excess returns but slightly lower portfolio Sharpe ratios if firms behaved as they did before Sarbanes. Additionally, small private firms' option value of going public has fallen while larger firms' has risen. These changes are caused by increased fixed costs of being public and increased returns to scale from access to public capital.

Do Passive Investors Lose Money By Changing Firm Investment Choices? (with Erik Loualiche) [draft coming very soon!] 

Abstract: The rise of passive investing has caused structural changes in US equity markets. A larger share of price-inelastic investors leads firms to issue shares against their inflows and change their investment behavior. This plus price-elastic active investors trading against passive investors can both distort firm choices and cause passive investors to lose money. To estimate these losses, we develop a q-theory model of firm investment where the price of financing for investment is endogenous. We find passive investors lose almost 20 basis points per year, mostly to active investors rather than firm net issuance. The distortion of the firm's investment choice costs an estimated 1 bp/year of deadweight loss.

Constrained by the Government or Constrained by the Bank? Financing Constraints in a Dynamic Model of Industry Competition  [draft]

Abstract: Traditional models of dynamic oligopoly assume perfectly frictionless capital markets. This assumption can be relaxed to show that introducing financing constraints can lead to counterintuitive outcomes. When financing constraints are introduced to a standard model of dynamic oligopoly with mergers, the steady state equilibrium probability of monopoly decreases, as opposed to the intuitive expectation that it would increase. This increase is in fact observed in an environment lacking these financial frictions. This paper demonstrates that consideration of financing frictions is essential for models of antitrust policy and its effects on welfare outcomes.