Exploiting the random assignment of corporate bankruptcy filings, we estimate financial costs of judicial inexperience. Despite new judges' significant prior legal experience, formal education, and rigorous hiring process, their public Chapter 11 cases spend 19% more time in bankruptcy and...

This paper documents evidence that financial constraints increase firms' toxic emissions given that firms actively trade off abatement costs against potential legal liabilities. Exploring three quasi-natural experiments in which firms' financial resources are likely exogenously impacted, we find...

Firms under the threat of hedge fund activism on average experience significant losses of outstanding bondholder wealth: bond yield and default probability rises while bond prices and ratings deteriorate. Under-threat firms receive inferior terms when initiating new loans. These observations are...

Exploiting within-firm variations in plant-level toxic releases, we document the effect of managerial hometown attachment on corporate environmental policies. Pollution intensity is 20% lower for plants near CEOs' hometowns, achieved by conducting more costly waste management activities such as...

We use plant-level data from the US Census of Manufacturers to study the short and long run effects of temperature on manufacturing activity. We document that temperature shocks significantly increase energy costs and lower the productivity of small manufacturing plants, while large plants are...

This paper provides novel evidence on the role of pollution in the divestitures of industrial plants. We find that firms divest pollutive plants following scrutinized environmental risk incidents. Following these divestitures, however, total pollution levels at the sold plants do not decline,...

How does access to financing influence racial pay inequality inside firms? We answer this question using the employer-employee matched data administered by the U.S. Census Bureau and detailed resume data recording workers' career trajectories. Exploiting exogenous shocks to firms’ debt...