On March 31st, 2023, the Italian data protection authority found that ChatGPT violated data protection laws and banned the service in Italy, providing a natural experiment to assess the economic consequences of generative AI. Leveraging this event, we show that Italian firms with greater...

The recent wave of tech sector layoffs has highlighted concerns about worker protection from abrupt job loss. This paper introduces a new quasi-natural experiment, the state Worker Adjustment and Retraining Notification Act, which reflects these concerns by mandating advance notice to displaced...

Using the SEC’s 2004 decision to begin publicly disclosing its comment letters, we study the consequences of increased regulatory transparency on the banking industry. Because the SEC only issues comment letters to public banks, we exploit a difference-in-differences design to examine the...

The 2012 tax reform in China linked the dividend tax rate to investors’ share holding period, with a lower rate corresponding to longer holding. Using account-level data for which we know exactly the timing, size, directions, and prices of retail investors’ trades, we document that the...

Using a regression discontinuity design, this study shows that strengthened bank control rights triggered by loan covenant violations lead to an increase in cash tax savings and a reduction in tax risk. This effect is driven largely by firms with more severe shareholder–debtholder conflicts....

This paper examines firms' adaptation to long-term changes in climatic conditions. Using detailed information on establishments owned by U.S. public firms, we show that higher abnormal temperatures over the previous five years in a county lead to a significant reduction in local employment and...

We examine the effect of sovereign credit rating downgrades on firms' earnings management. Using the exogenous variation in credit ratings caused by sovereign rating downgrades from 61 countries, we show that firms reduce discretionary accruals after sovereign downgrades and are likely to...

This paper examines whether and to what extent loan officers' labor mobility affects the origination and modification of U.S. residential mortgage loans. Our identification relies on a spatial regression discontinuity design instituted by staggered adoption of the inevitable disclosure doctrine...

This study exploits the staggered adoption of the inevitable disclosure doctrine (IDD) by U.S. state courts as an exogenous shock that generates variations in the proprietary costs of disclosure. We find that firms respond to IDD adoption by reducing the level of disclosure regarding their...

This study examines how short sellers affect the workplace safety of firm employees. Relying on a quasi-natural experiment instituted by Reg SHO, we find that short selling pressure causes an increase in employee injuries. This effect is more pronounced for firms with greater incentives to...