Research

Publications

“Heads I win, tails you lose: Asymmetric taxes, risk taking, and innovation” with Brent Glover and Oliver Levine.
PaperBibTeX
Journal of Monetary Economics. Vol. 105, pp. 24-40. 2019.
The worldwide tax system incentivized US firms to invest in projects that were riskier and more transferable-capital intensive.

“Foreign investment of US multinationals: the effect of tax policy and agency conflicts” with Brent Glover and Oliver Levine.
PaperBibTeX
Journal of Financial Economics. Accepted.
The 2017 Tax Cut and Jobs Act 1) lowered the tax rate on foreign earnings, and 2) increased the opportunity cost of capital abroad by lifting restrictions on repatriating foreign profits. With respect to foreign investment, the latter of these countervailing effects dominates.

Working Papers

“The Real Effects of US Tax Arbitrage by Foreign Multinational Firms”
PaperBibTeX
Revise and resubmit, Review of Financial Studies.
Foreign firms strip profits out of the US to avoid taxes. When this becomes harder (due to foreign countries’ introduction of CFC legislation), they scale back investment and employment in the US.

“Does Foreign Tax Arbitrage Promote Innovation?”
PaperBibTeX
US multinationals’ use of intellectual property through subsidiaries in low tax countries supports domestic innovation.

“The Direct Investment Income Puzzle”
PaperBibTeX
The official statistics – whether the published aggregates or the confidential microdata – do not support the longstanding view that US direct investment abroad outperforms foreign direct investment in the US.

“Private Equity Fund Debt: Capital Flows, Performance, and Agency Costs” with Matthew Denes.
PaperBibTeX
A subscription line of credit (SLC) is debt issued to a private equity fund and used on a continuing basis. SLCs are associated with distortions in measures of funds’ apparent performance, such as their IRRs.

“Does Intergenerational Mobility Increase Corporate Profits?” with Michael Smolyansky.
PaperBibTeX
Greater intergenerational mobility is associated with increased corporate profits. We present evidence supporting a human-capital-based explanation in which areas with higher mobility do a better job in unlocking people’s innate talents, improving the performance of local firms.