AQR Top Finance Graduate Award 2022
The difference between corporate bond yields at issuance and in secondary markets, the ``issuance premium'', spikes in bad times, raising firms’ capital costs. Using new bond-level data and high-frequency variation in bond supply and demand, I estimate a model of primary markets with imperfectly elastic investors, endogenous bond supply, and underwriter frictions that quantifies the drivers of issuance premiums. I find underwriters’ favoritism towards investors increases issuance premiums’ levels and cyclical variation. On the other hand, relatively elastic investors allow primary markets to absorb large bond issuances. My findings inform policies targeted at bond issuance markets.
with Olivier Darmouni and Kairong Xiao.
We develop a two-layer asset demand framework to analyze fragility in the corporate bond market. Households allocate wealth to institutions, which allocate funds to specific assets. The framework generates tractable joint dynamics of flows and asset values, featuring amplification and contagion, by combining a flow-performance relationship for fund flows with a logit model of institutional asset demand. The framework can be estimated using micro-data on bond prices, investor holdings, and fund flows, allowing for rich parameter heterogeneity across assets and institutions. We match the model to the March 2020 turmoil and quantify the equilibrium effects of unconventional monetary and liquidity policies on asset prices and institutions.
with Olivier Darmouni.
Appears in COVID Economics. Press coverage: WSJ, VoxEU.
How do asset purchases by central banks transmit to the real economy? Using micro-data on corporate balance sheets, we study firm behavior after the unprecedented policy support to corporate bond markets in 2020. As bond yields fell, firms issued bonds to accumulate large and persistent amounts of liquid assets. The effect on real investment was generally weak: many issuers already had access to bank liquidity and maintained equity payouts, while others used bond funds to pay back bank debt. This evidence sheds light on how corporate liquidity and financial heterogeneity matter for the macro-economy and the transmission of unconventional monetary policy.
with Julia Selgrad.
Best Paper in Empirical Finance at WFA, 2026
Best Paper in Corporate Finance Award, SFS Cavalcade North America 2026
Watch the 20-minute NBER SI presentation beginning 1:58:00 here (July 2026)
We study how monetary policy affects corporate investment decisions and why there are long lags in transmission. We hand-collect a firm-level dataset of U.S. investment plans, which strongly predict realized investment and let us observe decisions separately from implementation. We find that plans respond to monetary policy differentially across horizons: long-horizon plans are more sensitive than near-term plans. Consistent with capital production frictions, plans for new projects respond more than plans for ongoing projects. Implementation lags thus help explain the long lags in monetary transmission. We document evidence of financing cost and cash-flow expectations channels.
with Jinyuan Zhang.
Watch the 40-minute NBER SI presentation beginning 2:09:00 here (July 2026)
When does economic news become fiscal policy? We hand-collect U.S. state budget documents and show that enacted budgets explain 69% of within-state spending variation. Exploiting institutionally determined staggered proposal dates, we identify a discrete ``decision window'' preceding budget proposals, during which news enters revenue forecasts, spending plans, and public investment; revenue-relevant news outside the window instead predicts forecast errors. Decision-window news affects local employment roughly four times as much as comparable off-window news. Monetary policy affects state spending more within the window, providing evidence for an institutional source of ``long and variable lags.''
with Lira Mota. Formerly titled "Financially Sophisticated Firms".
Best Paper in Corporate Finance Award, SFS Cavalcade North America 2025
Using new data on bond issuance and portfolio holdings, we show that firms design bond structures to manage their cost of capital and ``financial fragility''---exposure to non-fundamental investor demand shocks. Because markets are segmented, firms lower their cost of capital by catering to investors with temporarily elevated demand. Such demand, however, often comes from less stable investors, so firms tradeoff between cost of capital and fragility. By tailoring bonds to investor preferences, firms shape bondholder composition, thereby choosing their own fragility. Our findings bridge asset pricing and corporate finance by showing how bond supply responds to investor demand.
Data: Map bond issuers to Compustat parent company.
"Corporate Bond Issuance and Bank Lending in the United States" (with Olivier Darmouni), European Economy: Banks, Regulation, and the Real Sector - Banking and Covid, 2021. April 2021. Link.
"Reclassification at Facebook (2016-2017)." (with Wei Jiang), Columbia CaseWorks, Case ID: 180310, Spring 2018. Link.
"Fraunhofer: Innovation in Germany." (with Diego Comin and Gunnar Trumbull), Harvard Business School Case 711-022, March 2011. (Revised March 2012.)
"Fraunhofer: Five Significant Innovations." (with Diego Comin and Gunnar Trumbull), Harvard Business School Supplement 711-058, March 2011.