« Back to Results

Social Corporate Finance

Paper Session

Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM

Hilton Atlanta, Grand Ballroom D
Hosted By: American Finance Association
  • Chair: Henrik Cronqvist, University of Miami

Does Analyst Coverage Affect Workplace Safety?

Daniel Bradley
University of South Florida
Connie Mao
Temple University
Chi Zhang
University of Massachusetts-Lowell


Consistent with the monitoring role of analysts, we find work-related injury rates are negatively related to higher levels of analyst coverage. This result is robust to approaches designed to mitigate endogeneity concerns and is stronger in industries where unions are less powerful, for firms followed by all-star analysts and in the presence of more local analysts. Firms with greater analyst coverage are more likely to adopt safety clauses in CEO compensation contracts, are rated higher in workplace safety culture, invest more in safety and management is more likely to discuss safety issues during earnings conference calls. Our results suggest analysts have a subtle yet important impact on employee welfare.

The Impact of Obamacare on Firm Employment and Performance

Heitor Almeida
University of Illinois
Ruidi Huang
University of Illinois-Urbana-Champaign
Ping Liu
State University of New York-Buffalo
Yuhai Xuan
University of Illinois-Urbana-Champaign


We study the impact of Obamacare on firm employment and performance using hand-collected
firm-level employee health insurance data. We show that Obamacare is associated with a
significant increase in health insurance premia for employees in company-sponsored health
insurance plans. Perhaps because of this increase in cost, companies with a large fraction of
employees on their health insurance plans prior to Obamacare actively reduce enrollment in
these plans after the law was enacted. We also find evidence that these same companies shift
their employment composition from full-time employees to part-time, temporary, or seasonal
workers, who are not covered in employer-sponsored health insurance plans. We do not find any
evidence of deterioration in performance in companies that were more exposed to the increase in health insurance premia, perhaps because these companies adjust to the new regulation by
changing the composition of employment towards part-time employees.

Punish One, Teach A Hundred: The Sobering Effect of Punishment on the Unpunished

Francesco D'Acunto
Boston College
Michael Weber
University of Chicago
Jin Xie
Chinese University of Hong Kong


Direct experience of a peer's punishment might make salient the probability and negative consequences of facing punishment, and hence induce a change in the behavior of non-punished peers. We test for this mechanism in a unique setting. After observing peer firms punished for wrongdoing, Chinese listed State Owned Enterprises (SOEs) -- which are less disciplined by traditional governance mechanisms than non-SOEs -- cut the resources they tunnel to related private parties via loan guarantees, move to more independent boards, cut inefficient investment, and increase total factor productivity. SOEs experience positive cumulative abnormal returns around the announcements of peers' punishment, which suggests a positive association between peers' punishment and shareholder value. SOEs do not shift to more opaque forms of tunneling -- the bank credit and investment of related parties drop and do not revert after peers' punishment.

Tournament Incentives and Financial Regulation

Joseph Kalmenovitz
New York University, Stern School of Business


I study how tournament incentives affect financial market regulation, by using original employee-level data on enforcement attorneys at the U.S. Securities and Exchange Commission (SEC). Tournament incentives, reflected by better promotion opportunities and larger expected salary within the SEC, seem to increase enforcement activity. I show that the positive relation holds at the aggregate level and at the individual attorney's level. I evaluate and provide evidence to reasonably rule out alternative explanations such as outside job opportunities, cash bonus, hierarchy, and case assignment. The results indicate that the SEC's internal organization could affect financial markets, and highlight a novel link between incentives and regulation.
Irena Hutton
Florida State University
Sara Holland
University of Georgia
Da Ke
University of South Carolina
Tara Bhandari
U.S. Securities and Exchange Commission
JEL Classifications
  • G3 - Corporate Finance and Governance