News

New publication "Institutional Investor Distraction and Unethical Business Practices: Evidence from Stakeholder-Related Misconduct" conditionally accepted in Journal of Financial Stability.

Abstract:
We exploit exogenous shocks to institutional investors' portfolios to show that managers engage in significantly more stakeholder-related misconduct when institutional investors are distracted. The relationship is more pronounced (i) for firms where managers are more enticed to commit misconduct or have more outside options in the executive labor market, (ii) for firms in competitive environments, and (iii) for firms with weak internal and external governance. Finally, we find that during these periods of institutional distraction, managers are particularly likely to engage in misconduct detrimental to employees.

Link to SSRN version:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4115733