Research

Healthcare firms are filing for Chapter 11 bankruptcy at record high levels. We show causal evidence that bankruptcies harm patients through increased worker turnover. Exploiting novel high-frequency employment data, we document a sharp post-bankruptcy increase in worker departures, with firms replacing departing workers with new hires. Using administrative data on facility-level inspections and patient-level assessments, we find that filing for bankruptcy adversely affects quality: health inspection violations increase and patient care declines. Finally, we conduct an online survey experiment and show that a bankruptcy filing leads to a dramatic increase in voluntary departures, and that the increase in inexperienced workers causes adverse patient outcomes.

A rationale for government industrial funding is that it solves market imperfections, but public officials frequently find decision-making in such settings challenging. Under certain circumstances, governments may opt to partner with the private sector to achieve its goals. We model when funding will be provided exclusively by private investors, governments, or jointly. By collecting novel and comprehensive data on 755 programs worldwide, we find that government funding relies heavily on private sector involvement. Consistent with theory, co-investments are more likely when opportunities are harder to evaluate and when governments are better run. We find that these initiatives lead to more subsequent venture capital and innovation, particularly when structured to facilitate collaboration with the private sector.

We provide a regulatory-arbitrage-based explanation for the origin and proliferation of the Special Purpose Acquisition Company (SPAC). SPAC sponsors act as non-bank intermediaries, and the SPAC market structure appeals to yield-seeking investors and riskier, high-growth issuers overlooked by downside-averse bank underwriters. Data from 2003-2020 support these predictions. SPAC firms are smaller, younger, and riskier than traditional IPO firms but grow revenue at higher rates after going public. Equity market investor sentiment strongly predicts SPAC capital raises relative to traditional IPOs. Finally, a difference-in-differences analysis shows that an increase in IPO litigation risk generates a shift towards SPACs.

We make use of agency theory to study how incentives interact with selection in economics PhD admissions. One hypothesis of agency theory is that the principal aggregates information efficiently and selects the most able agents to reward. We present the implications of this hypothesis for the admissions setting in a framework where committees allocate a fixed supply of slots to applicants based on the predicted likelihood of success in the profession. Using a novel hand-collected dataset that matches over 6,000 applicants from 2013-2019 to their outcomes, we document how applicants to graduate programs in economics are evaluated and how these evaluations relate to subsequent academic job placements. We quantify the role of subjective evaluations in this process and their relation to performance outcomes. Our findings underscore the importance of referrals (in the form of recommendation letters) and referrer identity in the labor market.