We show that the allocation of managerial ownership to individuals within firms varies depending upon the joint distribution of decision control and decision management rights. Using a unique dataset of institutional investment management firms, we show that ownership is higher for managers:...

Differences in accrued gains and investors' tax-sensitivity induce variation in a capital gains lock-in effect across mutual funds even for the same stock at the same time. Exploiting this variation, we show this effect influences funds' governance decisions: higher capital gains decrease the...

We use SEC rule changes to show that regulatory oversight reduces return misreporting by hedge funds. Specifically, we use a 2004 rule change that expanded SEC oversight of hedge funds and the 2006 revocation of this rule. Differences-in-differences tests show that, following the rule change,...

We test whether personal real estate shocks affect professional misconduct by financial advisors. We use a panel of advisors' home addresses and examine within-advisor variation relative to other advisors who work at the same firm and live in the same ZIP code. We find a negative relation...

The taxation of realized capital gains creates a lock-in effect, increasing an investor's expected holding period. We show that the unrealized capital gains of mutual funds are positively associated with the earnings quality of their portfolio firms. Consistent with tax-induced lock-in, the...

We study how access to high-skill labor affects the outcomes of start-up firms. We obtain exogenous variation in firms' ability to access skilled labor by using win rates in H-1B visa lotteries. Relative to other firms that also applied for H-1B visas, firms with higher lottery win rates are...

Because of differences in accrued gains and investors' tax-sensitivity, capital gains "lock-in" varies across mutual funds even for the same stock at the same time. Using this variation, we show that tax lock-in affects funds' governance decisions. Higher tax lock-in decreases the likelihood a...

Endowment payouts have become an increasingly important component of universities' revenues in recent decades. We test two leading theories of endowment payouts: (1) universities smooth endowment payouts, or (2) universities use endowments as self-insurance against financial shocks. In contrast...

This paper tests the effect of background risk on university endowment portfolios, where background risk is defined as the volatility of universities' non-financial income. The results show that higher background risk is associated with lower portfolio standard deviations. Universities with...

We develop a dynamic portfolio-choice model with illiquid alternative assets to analyze conditions under which the "Endowment Model," used by some large institutional investors such as university endowments, does or does not work. The alternative asset has a lock-up, but can be voluntarily...