This study explores the substantial impact of institutional investor representatives on boards of directors regarding establishment-level workplace safety. The results reveal a positive correlation between institutional directors’ presence and workplace safety improvements. Further analysis indicates that this beneficial relationship is primarily associated with institutional directors committed to the long term rather than those focused on short-term gains. The study also examines how various internal and external organizational factors influence the monitoring effectiveness of long-term-oriented institutional directors. The findings suggest that monitoring effectiveness is more significant in environments where both local communities and corporate governance structures emphasize a long-term perspective. Additionally, our analysis indicates that long-term institutional directors’ contributions to enhanced workplace safety are consistent with their impact on corporate environmental disclosures.

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This study explores how firm-level environmental sentiment affects loan pricing and lender participation in syndicated lending markets. Using textual analysis of U.S. public firms’ 10-K filings from 1994 to 2020, we construct a measure of positive environmental sentiment and examine its relationship with the loan spread and the number of new lenders joining loan syndicates. The baseline results show that firms with more positive environmental tones in their annual reports benefit from lower loan spreads and attract more new lenders, even in uncertain situations. To address potential endogeneity, we implement entropy balancing (EB) and conduct instrumental variable (2SLS) regressions using media coverage as instruments. Furthermore, we exploit the Paris Agreement of 2015 as a plausibly exogenous shock in a difference-in-differences (DiD) framework. Subsample analyses show that the impact of environmental sentiment is stronger for firms in Democratic (non-Red) states, firms with lower analyst coverage, larger loans, and during periods of high policy uncertainty. Our findings suggest that environmental disclosures, beyond ESG scores, carry valuable information for lenders, especially in shaping perceptions of long-term risk and firm responsibility.

Co-opted board members are poor monitors and—contrary to prior assumptions—ineffective advisors, resulting in suboptimal merger and acquisition decisions and deal characteristics as well as low acquirer’s short- and long-term returns and operating performance. These results are robust to the use of propensity score matching, entropy balancing, Instrumental variable using 2SLS, difference-in-difference, and Oster’s test to address selection bias and endogeneity. These results are stronger in the presence of less independent boards and when directors have less firm- and/or industry-specific experience than CEOs. Co-opted boards seem to hinder the quality of merger and acquisition decisions through both lenient monitoring and low advice utilization.

• Scheduled to present at Financial Management Association, 2025

• Presented at Southwestern Finance Association, 2024

• Presented at Southern Finance Association, 2024

This study examines the real effects of exchange rate risk on firms’ Environmental, Social, and Governance (ESG) strategies, with a particular focus on multinational corporations facing currency volatility. Using panel data from 23 countries, our analysis reveals a positive association between exchange rate risk and ESG performance, suggesting that firms may engage in ESG initiatives as a strategic response to external financial uncertainty. The influence of exchange rate risk differs across ESG dimensions: the social and governance pillars are more responsive to exchange rate fluctuations than environmental initiatives.

• Scheduled to present at Southern Economic Association, 2025

• Presented at the Global Finance Research Center, 2025

We find robust empirical evidence that firms with higher exposure to biodiversity risk pay significantly higher spreads on their bank loans. This result is robust to different model specifications, several measures of biodiversity risk, and survives a battery of tests to ease various endogeneity concerns. In particular, we find that firms that have no exposure to biodiversity risk still pay higher spreads on their loans when their customers are exposed to this risk, hinting on the systemic nature of this risk. The results also show that green banks reward low-risk borrowers with cheaper credit while penalizing high-risk borrowers with higher spreads, strengthening the pricing of biodiversity risk in loan markets. We further show that the adverse of biodiversity risk is driven by poorly rated borrowers, long-term loans, and lenders with strong ESG orientation. Overall, our evidence suggests that lenders consider biodiversity risk as a relevant risk factor.

• Received grant from Kemper Insurance, 2024

• Presented at Southwestern Finance Association, 2024

This paper examines how government control influences the CEO–employee pay gap and its subsequent effects on CEO turnover, agency costs, operational efficiency, and financing decisions. Using a dataset of 6,811 firm-year observations from 30 countries spanning 2002 to 2019, we document that government-controlled firms exhibit a significantly narrower CEO–employee pay gap—approximately 38.1% lower—primarily driven by reductions in CEO compensation rather than higher employee wages. This pay compression is associated with increased managerial instability, as CEOs in government-controlled firms face a 45.8% greater likelihood of turnover. Consequently, these firms experience 26.4% higher operational inefficiency, 2.8% greater agency costs, 5.9% lower relative R&D investment, and 7.3% lower relative leverage compared to industry benchmarks. Employing rigorous econometric methods—including instrumental variable estimation (2SLS), dynamic GMM, and sensitivity analyses—we clarify the critical governance trade-offs inherent in government ownership, highlighting significant implications for policymakers and corporate governance practitioners.

Using a newly developed measure, we show that creditors view cybersecurity as a significant risk factor. We find that following a covenant violation, cybersecurity risk exposure declines, and that monthly credit spread changes for firms with high cyber risk are significantly larger than those of otherwise similar firms with no cyber risk. This result is driven by poorly rated bonds and those with longer-term maturity and significantly more pronounced after 2011 when the SEC mandated reporting material cybersecurity incidents and exposure. Consistently, we further document that the demand for insurance against the debt of high cyber risk firms is significantly higher. We also find a spillover effect to no-cyber risk firms that either they or their main customers operate in high cyber risk industries, hinting on the systematic nature of this risk.

• Received grant from Kemper Insurance, 2024

• Presented at Southwestern Finance Association, 2024

• Presented at Southern Finance Association, 2023

We investigate the effects of government subsidies on the CEO–employee pay gap using U.S. data from 2000 to 2021. We apply regression analysis, difference-in-differences, nearest neighbor matching, and instrumental variable technique to assess how subsidies influence the CEO–employee pay disparity. We demonstrate a positive and persistent relationship between subsidy receipt and the CEO–employee pay gap. This effect is stronger in firms with weak corporate governance and among large subsidy recipients. Our findings highlight how government intervention can exacerbate agency problems, offering new insights into executive behavior and the unintended consequences of public subsidies.