Strike Three: Umpires' Demand for Discrimination

We explore umpires' racial/ethnic preferences in the evaluation of Major League Baseball pitchers. Controlling for umpire, pitcher, batter and catcher fixed effects and many other factors, strikes are more likely to be called if the umpire and pitcher match race/ethnicity. This effect only exists where there is little scrutiny of umpires' behavior -- in ballparks without computerized systems monitoring umpires' calls, at poorly attended games, and when the called pitch cannot determine the outcome of the at-bat. If a pitcher shares the home-plate umpire's race/ethnicity, he gives up fewer runs per game and improves his team's chance of winning. The results suggest that standard measures of salary discrimination that adjust for measured productivity may generally be flawed. We derive the magnitude of the bias generally and apply it to several examples.

Strike Three: Umpires' Demand for Discrimination

We explore how umpires' racial/ethnic preferences are expressed in their evaluation of Major League Baseball pitchers. Controlling for umpire, pitcher, batter and catcher fixed effects and many other factors, strikes are more likely to be called if the umpire and pitcher match race/ethnicity. This effect only exists where there is little scrutiny of umpires' behavior – in ballparks without computerized systems monitoring umpires' calls, at poorly attended games, and when the called pitch cannot determine the outcome of the at-bat. If a pitcher shares the home-plate umpire's race/ethnicity, he gives up fewer hits, strikes out more batters, and improves his team's chance of winning. The general implication is that standard measures of salary discrimination that adjust for measured productivity may be flawed. We derive the magnitude of the bias generally and apply it to several examples.strategic interactions, worker evaluation, wage equations, economics of sports

Local Investors’ Preferences and Capital Structure

We provide evidence that publicly listed firms respond to capital supply conditions shaped by local investing preferences. The local supply of credit is higher and more stable in areas where demographics suggest that local investors prefer safer portfolios. We find that firms headquartered in these areas use more debt financing. The demographics-leverage relation is more pronounced for non-investment-grade and unrated firms that cannot easily tap public markets (about two-thirds of U.S. public companies). Analyses of firms’ financing activities around exogenous shocks to credit supplies – including interstate banking deregulation and the 2008-2009 financial crisis – support the capital supply effect. As demographics change slowly, local investors’ preferences may contribute to the heterogeneity and persistence of public firms’ capital structures

Essays on the impact of institutional investors on market efficiency and corporate policies

textIn this dissertation, I explore the determinants and implications of the preferences of institutional investors. First, I examine whether institutional investors' preference for local investments is related to informational advantage. Analyzing the equity holdings of a large sample of actively managed mutual funds, I find evidence consistent with the mutual fund industry having a perception that local funds have an informational advantage. However, the portfolio of mutual funds' local holdings does not display significant superior performance relative to the portfolio of their distant holdings. Using a parsimonious model, I hypothesize that the profitability of local informational advantage will be low due to the price impact of trading when there is a relatively large population of local agents who trade on similar private information. Consistent with this hypothesis, I find that funds do earn superior returns on local stocks for which local capital is limited and hence the price impact of local trades is likely to be small. Second, I examine the preferences of institutional investors for firm policies and the relationship between these preferences and firm decisions. I find that institutional investors exhibit systematic differences in their preferences for financial and investment policies. Furthermore, these preferences are related to subsequent changes in the financial and investment policies of the firms they invest. In particular, a firm is more likely to decrease (increase) its leverage ratio if its current leverage is higher (lower) than the preferences of its institutional shareholders. A firm is also more likely to increase (decrease) its investment if its current investment ratio is lower (higher) than the preferences of its institutional shareholders. These findings suggest that the preferences of institutional shareholders are important determinants of corporate policies.Financ

The Effect of Social Media on the Ethnic Dynamics in Donations to Disaster Relief Efforts

Efficient resource-sharing via private transfers among households during natural disasters serves to foster a more resilient society. This study explores the effect of social media on private donations from households to natural disaster relief efforts. The donation pattern in a popular charitable crowdfunding platform exhibits inter-ethnic dynamics: Campaigns initiated by Hispanic fundraisers receive disproportionately fewer donations and lower donation amounts from non-Hispanic donors, relative to Hispanic donors. Moreover, we document a novel finding that social media statements from a political figure (President Donald Trump) influence the dynamic of private transfers across households from different ethnic groups. This finding provides a salient consideration for policymakers and government officials regarding the effects of their actions on society’s resilience and sustainability

The Effect of Social Media on the Ethnic Dynamics in Donations to Disaster Relief Efforts

Efficient resource-sharing via private transfers among households during natural disasters serves to foster a more resilient society. This study explores the effect of social media on private donations from households to natural disaster relief efforts. The donation pattern in a popular charitable crowdfunding platform exhibits inter-ethnic dynamics: Campaigns initiated by Hispanic fundraisers receive disproportionately fewer donations and lower donation amounts from non-Hispanic donors, relative to Hispanic donors. Moreover, we document a novel finding that social media statements from a political figure (President Donald Trump) influence the dynamic of private transfers across households from different ethnic groups. This finding provides a salient consideration for policymakers and government officials regarding the effects of their actions on society’s resilience and sustainability