Job Market Paper

“Doing Business in Emerging Markets: The Benefits of Being Private”

This paper studies how firms deal with business-unfriendly regulations that limit their operations. I first exploit a natural experiment to show that the ownership structure of a firm affects its degree of compliance with regulations, with publicly listed firms complying more than privately held ones. Then I show that this differential compliance imposes a burden on listed firms that helps explain the patterns of M&A activity in emerging markets. When the level of market regulations increases, private firms acquire listed ones and when market regulations decrease the results are reversed. I find that this effect is stronger for listed firms that are subject to stricter auditing and enforcement standards, suggesting that scrutiny plays an important role. Taken together, these results uncover an additional cost faced by listed companies, identify a new driver of M&A transactions in emerging markets, and show evidence that high levels of regulation lead to opaque corporate structures.

Work in Progress

“Depositors’ Attention and Bank Risk: Evidence from UK offshore deposits”, joint with Matthieu Chavaz (Bank of England) and May Rostom (Bank of England)

“Currency Composition of Firm Debt: Evidence from Peru”, joint with Charles Calomiris (Columbia), Mauricio Larrain (Columbia), and Daniel Wolfenzon (Columbia)