We examine how executive pension and deferred compensation plans affect bank risk-taking. We show that banks with more inside debt incentives are 5-8% less likely to approve risky mortgages. Using state individual tax rates as instruments, we show that the effect is likely to be causal. Further...

This paper studies whether debt renegotiation mitigates debt overhang and improves investment efficiency. Using mergers between lenders participated in the same syndicated loans as natural experiments that exogenously reduce the number of lenders and thus make renegotiation easier, I find that...

We examine the causal effect of limits to arbitrage on 11 well-known asset pricing anomalies using the pilot program of Regulation SHO, which relaxed short-sale constraints for a quasi-random set of pilot stocks, as a natural experiment. We find that the anomalies became weaker on portfolios...

This paper studies how the ease of repossessing collateral in bankruptcy affects corporate leasing policy. Using plausibly exogenous variation of the comparative advantages in the ability to repossess assets between leases and secured lending generated by anti-recharacterization laws, I find...

Using a unique micro-loan application data set in China, we study the effect of intra-household monitoring in credit access on borrower welfare. In particular, we show that men are more likely than women to evade intra-household monitoring when accessing credit. Using the Chinese government's...

Using a comprehensive dataset of housing transactions in Beijing, China, we find that government officials are more likely than non-officials to buy housing units before government-imposed housing purchase restriction policy. We find that officials use their power to speed up the loan...

This paper examines how monetary policy affects risk-taking and reaching-for-yield behavior of individual investors in the peer-to-peer lending market. Using data from Prosper.com from 2006 to 2013, we find that easy monetary policy, as measured by lower effective federal funds rates or the...

We examine the causal effect of limits to arbitrage on 11 well-known asset pricing anomalies using the pilot program of Regulation SHO, which relaxed short-sale constraints for a quasi-random set of pilot stocks, as a natural experiment. We find that the anomalies became weaker on portfolios...

Exploiting staggered interstate banking deregulation as exogenous shocks to bank geographic expansion, we examine the causal effect of geographic diversification on systemic risk. Using the gravity-deregulation approach developed in Goetz, Laeven, and Levine (2013, 2016), we find that bank...

In this paper, we document a positive effect of supplier-customer geographic proximity on supplier innovation. To establish causality, we explore plausibly exogenous variation in proximity caused by customer relocations. The positive effect of supplier-customer proximity on supplier innovation...