We use a unique data set of over two million matched employer-employee-year observations in Italy over the 1994-2000 period to identify the causal effect of a quasi-exogenous shock to within-firm pay inequality on firm performance, investment, and payout policies. Consistent with our theoretical...

In this paper, we investigate how the COVID-19 health crisis could affect the liquidity of listed firms across 26 countries. We stress-test three liquidity ratios for each firm with full and partial operating flexibility in two simulated distress scenarios corresponding to drops in sales of 50%...

Many investors purchase open-end mutual funds through intermediaries, paying brokers and financial advisors for fund distribution and advice via alternative sale charge fee structures. We argue that the fee structure choice reveals valuable information about investors horizon. That allows...

This paper studies the effect of the number of cases of COVID-19 on stock returns from over 3,500 publicly listed firms headquartered across 167 regions in 10 European countries. We instrument the number of cases per million inhabitant in each region with its population, density, and the soccer...

We examine the role of peer (e.g., Lipper indices) vs. pure (i.e., market indices) benchmarks in the compensation contract of mutual fund managers. We first model the impact of peer vs. pure benchmarks on fund manager incentives. Then, using a unique hand-collected dataset, we test the...

Using a direct estimate of income diversion for a large sample of Russian firms from 1999 through 2004, we show that an increase in tax enforcement after Putin's election in 2000 is associated with a decrease in the appropriation of private rents by insiders both in firms explicitly targeted as...

We study compensation contracts of individual portfolio managers using hand-collected data of over 4,500 U.S. mutual funds. Variations in the compensation structures are broadly consistent with an optimal contracting equilibrium. The likelihood of explicit performance-based incentives is...

We study policies that regulate executive compensation in a model that jointly determines executives' effort, compensation and firm leverage. The market failure that justifies regulation is that executives are optimistic about asset prices in states of distress. We show that shareholders propose...