1. The Power Behind the Pen: Institutional Investors’ Influence on Media during Corporate Litigation

with Jie (Jack) He, Han Xia, and Luo Zuo

• Revise and Resubmit at Journal of Accounting Research

• Semi-finalist for the FMA Best Paper Award 2020

• Presentations: AFA 2022, CICF 2021, SFS Cavalcade 2020 virtual*, EFA (European) 2020 virtual*, NFA 2020 virtual, FMA 2020 virtual

• Abstract: Institutional investors increasingly own equity blocks of media companies that complement holdings in industrial firms. When industrial firms become defendants of corporate litigation, these institutions nudge media companies they simultaneously blockhold to provide more lenient coverage about the defendants. Doing so props up market sentiment and mitigates negative price impact – benefiting institutions’ portfolios. This strategy is more prominent when institutions are activists and pay closer attention to litigation events. Following the lenient coverage, institutions gradually exit positions in troubled defendant firms and begin to vote more favorably toward the media’s management. Overall, media outlets seem to slant their coverage of corporate litigation to cater to their large shareholders.

2. Asymmetric Information, Patent Publication, and Inventor Human Capital Reallocation

• AFA 2022 Poster session, MFA 2022, NFA 2021 PhD Symposium, FMA 2021 Doctoral Student Consortium Job Market Paper Presentation, WEFI Student Workshop, 2nd Rising Scholars Conference

• Abstract: How does patent publication affect inventor human capital reallocation? Leveraging (i) the American Inventor’s Protection Act (AIPA) that requires patent applications to be published within 18 months of filing rather than when granted, (ii) plausible quasi-random assignment of patent examiners, and (iii) a large dataset tracking inventors’ career paths, I find that the expedited patent publication helps inventors switch employers. Additional analyses suggest that increased mobility is driven by expanded outside employers’ information and reduced information asymmetry: the effect is more pronounced among inventors of high-quality, with scarcer existing information, or in technologies where patents are more informative. Suggestive evidence indicates a positive effect of increased mobility on enhancing inventor-firm matching and their patenting output. This study highlights an important yet overlooked facet of patent publication: inventor human capital reallocation.

3. Herd on Stars in CEO Compensation

with Swaminathan Kalpathy and Vikram Nanda

• Best Paper Award IFABS 2019

• Presentations: Research in Behavior Finanace Conference*, MFA 2020 virtual*, CICF 2019, FMA Asia/Pacific*, IFABS-Angers 2019*

• Abstract: We study the compensation influence of highly-central firms ("stars") in the CEO compensation peer network. We find that lower-profile firms covertly tie CEO compensation to these influential "stars" We propose a "Herding on stars" hypothesis: lower-profile, agency-prone firms herd on the same set of stars and avoid shareholder scrutiny. Better governance and reputable compensation consultants diminish herding. Unlike excess-pay in general, herding-driven excess-pay does not elicit negative ISS recommendations or shareholder opposition. Herding on stars emerges after the 2006 SEC rule inadvertently identified firms with the greatest compensation influence. Evidence suggests that the herding contributes to the rapid increase in CEO pay at smaller, less visible firms.

4. Fragmented Ownership Rights and Patent Litigation Spillovers on Corporate Innovation (Draft available upon request)

with Julian Atanassov and Vikram Nanda

• Eastern Finance Association 2022, 15th Annual Meeting on Empirical Legal Studies, FMA 2021, IFABS-Oxford 2021, Munich Summer Institute 2021, Poster session

• Abstract: We examine whether the inter-related nature of innovation leads to fragmented patent rights. We test the implication that with fragmented rights, patent lawsuits will have ramifications far beyond litigants. Using quasi-random assignment of patent examiners to alleviate endogeneity concerns, we examine firms technologically related to the defendant firm. These technology-peers, facing threats to intellectual property rights, reduce R&D and suffer a loss of high-quality inventors, resulting in poorer innovation outcomes and lower firm value. Clear winners are the defendant’s product-market rivals with unrelated technologies. We show potential voiding of the litigated patent boosts follow-on innovations, though the quality of citing patents is low.