Using Layer-2 Technologies to Improve Smart Contract Scalability 

By | February 3, 2023

Blockchain-based smart contracts have the potential to replace traditional contracts with decentralized contract enforcement in a way that does not involve a third-party intermediary. While smart contracts inherit key advantages from the base-layer blockchain infrastructure, such as decentralization, immutability, and transparency, they are also subject to the same trilemma that blockchains face: scalability, security, and… Read More »

Remedial Actions After Corporate Social Irresponsibility 

By | February 2, 2023

Reputational damage resulting from media, consumer, or investor outcry often follows corporate scandals. For instance, notable oil spills, from Exxon’s 1989 Exxon Valdez disaster to BP’s 2010 Deepwater Horizon disaster, have resulted in both hundreds of millions of dollars in direct regulatory penalties as well as short-term stock market losses (Länsilahti 2012), substantial longer-term losses… Read More »

The Value of Banking Governance Reform in China

By | February 1, 2023

Motivation   Banks collect deposits from households and allocate funds to borrowing firms in the real economy. Banks play two fundamental roles in fund allocation: selecting the best borrower from potential borrowers and monitoring them (Diamond 1984, 1991). The successful fulfillment of those two roles builds on a good bank governance system that aims to protect… Read More »

Security Issuance, Institutional Investors and Quid Pro Quo: Insights from SPACs 

By | January 27, 2023

Why is it So Costly to Go Public?  The average first-day returns to investors of initial public offerings (“IPOs”) in the U.S. is 19%. These returns are even higher elsewhere, such as in China. For reference, the S&P 500 index gains only a few basis points a day on average. While a large one-day return… Read More »

Toxic CEOs, ESG Funds as Watchdogs, and the Labor Market Outcomes

By | January 25, 2023

In a new paper, I examine changes in CEO labor market outcomes following corporate environmental misconduct, which creates negative externalities that firms are required by law to prevent. Corporate activities create significant negative environmental externalities. These economic costs can exceed $4.7 trillion a year, are multi-sectoral, and appear through the entire lifecycle of products. Externalities… Read More »

Herding in the Non-fungible Token (NFT) Market 

By | January 19, 2023

As a new species of cryptographic asset based on blockchain technology, the non-fungible token (NFT) became prominent and attracted attention from academia and practitioners. Unlike cryptocurrencies, which primarily serve as a medium of exchange, NFTs are blockchain-recorded digital assets that can be anything digital, e.g., images, videos, and songs. The NFT market reached its peak… Read More »

Angels and Devils: The Early Crypto Entrepreneurs

By | January 18, 2023

This post is a summary of a paper that was selected for inclusion at the inaugural Digital Assets at Duke Conference at Duke University on January 20 and 21.  The past year was not a good one for crypto, with Sam Bankman-Fried’s massive fraud through FTX/Alameda, Do Kwon’s failed algorithmic stablecoin experiment (Terra Luna), and… Read More »

Who’s Afraid Of Antitrust? As Of Late, (Minority) Private Equity Investors 

By | January 11, 2023

The antitrust world is changing. US agencies’ eyes are turning to finance, with the newest enforcement target being private equity (“PE”). Repeated public statements and speeches of US antitrust officials under the Biden administration  clearly signal this policy shift. This is no surprise for Europe. The European Commission, confirmed by the Courts, has also recently… Read More »

Countering the Ransomware Epidemic: The Role of Insurance 

By | January 10, 2023

Ransomware attacks have created havoc across a range of industries – including the cyber-insurance sector, where insurance premia are rocketing to cover soaring losses. Looking into the security failures on some of these attacks raises the question of whether insurers were too lax in their underwriting practices: How could firms obtain insurance without fulfilling even… Read More »