Research

Review of Finance, Volume 29, Issue 4, July 2025, Pages 1219–1258.

Editor's Choice

Abstract: I document that the network structure of the online economy significantly contributes to rising industry concentration.  Firms that are central in the online economy benefit more from increased economies of scale, decreased search costs, and network effects resulting from digitalization.  Industries with firms that are more central become more concentrated and central firms have larger increases in market share.  These results are driven by firms’ ability to generate revenue, as evidenced by central firms earning higher risk-adjusted returns and having more positive earnings surprises.  Centrality is also associated with increasing productivity, but profitability only increases for central firms in business-to-consumer industries.

Journal of Financial and Quantitative Analysis , Volume 60 , Issue 4 , June 2025 , Pages 1625–1655.

Abstract: We develop an extensive mapping of the revolving door phenomenon by examining the work experience of 420,153 individuals in top corporate positions at 12,869 firms. More than half of these firms have at least one such individual with prior experience in one of 187 executive branch agencies. We find that firms are more likely to receive procurement contracts following the appointment of a former regulator transitioning within two years of leaving the agency. This result is consistent with the “knowledge” hypothesis. Furthermore, less-complex contracts signed following the appointment of former regulators are more likely to be renegotiated, resulting in higher costs for the government.

Media Coverage: ProMarket

Abstract: Open-source innovation lacks the legal excludability viewed as essential for generating private value from innovation. Nonetheless, using investor reactions to GitHub releases by U.S. public firms from 2015-2023, we estimate an average private value of $849,000 per project. Extrapolation to all projects during this period implies a total value of $909 billion. Firms facing less competition release more projects, and both lower competition and restrictive licenses generate more private value. This value predicts firm growth, but peer benefits are modest. Overall, firms generate private value from open-source innovation by limiting spillovers, challenging the notion that open source fosters industry-wide growth.

Abstract: We investigate how stock market concentration impacts the return difference between small and large firms (i.e., the size premium). Concentration may increase expected returns for large firms due to the inability to diversify their idiosyncratic risk (i.e., granularity).  It may also increase expected returns for small firms if limited-attention investors allocate less attention to small firms in concentrated markets. We find that the limited attention effect dominates.  Concentration increases the size premium by 13.33 percentage points per annum and shifts attention away from small stocks. This has real effects via capital misallocation, amplifying the impact on the size premium.

Media Coverage: WSJ Heard on the Street, Morningstar, Seeking Alpha, Quantpedia 

Abstract: We study how patent thickets, which are clusters of interdependent patents that raise the cost of using or combining technologies, shape acquisition decisions. Firms are less likely to be acquired when their patents are embedded in external thickets, which exacerbate coordination and bargaining frictions. Conversely, firms are more likely to be acquired when their patents form internal thickets, which mitigate costs by consolidating control over related technologies. When acquirers and targets share an external thicket, acquisition probability rises when acquirers depend on targets but falls when targets depend on acquirers, underscoring the asymmetric role of technological dependence in acquisitions.

Media Coverage: Columbia Law School Blue Sky Blog

Abstract: Using investor internet access, we show that increased information access leads to decreased geographic bias in retail investor portfolios, although this ultimately harms the portfolio performance. With internet access improving information access, investors must choose whether to focus their attention on local or distant stocks, subsequently increasing or decreasing their geographic bias, respectively. We find that investors are more likely to invest in more distant stocks after starting to trade online. This is especially true for investors from rural areas and the southern region of the U.S. However, online investors are less likely to invest in new industries, increase their trend-chasing behavior, and appear to lose their advantage in local holdings, resulting in decreased Sharpe ratios despite the diversification benefits. The evidence is most consistent with distant stocks grabbing the attention of online investors and distracting them from their competitive advantage. Our findings demonstrate that while information access provides benefits for investors, it can also exacerbate behavioral biases, which places additional responsibility on investors to carefully manage how they use their access.