I am a job market candidate in Finance at the University of California-Berkeley, Haas School of Business.
I will be avaliable for interviews at the ASSA meetings in Philadelphia on January 5–7, 2018.
Research Interest: Household Finance, the Economics of Information, Social Finance, Corporate Finance.
Using the Department of Education's College Scorecard, I provide evidence that over 30% of undergraduates should expect to realize a negative financial return on their investment in higher education. To explain these findings, I construct a model of informed lending in which student loan providers know more about their students' likelihood for success. Reversing traditional lending information asymmetries has no adverse impacts in a laissez-faire environment, as borrowers are able to perfectly infer their type from lenders' loan offers. When all loans, however, are required to be issued at the same interest rate (as is the case with student loans) borrowers are no longer able to learn their true type. In this environment, borrowers may be induced to accept a predatory loan. In spite of the possibility for predatory lending, the socially optimal lending program may still mandate that all loans be issued at the same interest rate. In effect, the socially optimal lending program can encourage predatory lending.
Traditional research into corporate social responsibility (CSR) programs has argued that these CSR programs are a result of positive investment opportunities, agency costs, or investors’ pro-social motives. We, however, advance a new explanation: that CSR programs act as a signal of future firm strength. Using information on corporate donations, we show that firms who donate more perform better both in terms of their real performance and their stock returns. Both the investment hypothesis and our signaling hypothesis could plausibly explain our results. To differentiate between the two hypotheses, we examine the difference in giving and firm performance between firms with a short-term and a long-term focused CEO. We find that the relationship between giving and firm performance is much weaker in firms with a short-term CEO. Only our signaling hypothesis can account for this difference.
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Assistant Professor, Haas School of Business
greenb@berkeley.edu
Edward J. and Mollie Arnold Professor
Professor of Economics, Department of Economics
Professor of Finance, Haas School of Business
ulrike@econ.berkeley.edu
Sylvan C. Coleman Chair in Finance and Accounting
Professor of Finance, Haas School of Business
parlour@haas.berkeley.edu