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Working Paper
Workplace Automation and Corporate Liquidity Policy
Using an occupational probability of computerization, we measure a firm’s ability to replace labor with automated capital. Our evidence suggests that the potential to automate a workforce enhances operating flexibility, allowing firms to hold less precautionary cash. To provide evidence for this mechanism, we exploit the 2011–2012 Thailand hard drive crisis as an exogenous shock to the cost of automation. In addition, the negative relation between prospective automation and cash holdings is greater for firms with a lower expected cost of worker displacement and greater ...
Working Paper
It's Not Who You Know—It's Who Knows You: Employee Social Capital and Firm Performance
We show that the social capital embedded in employees' networks contributes to firm performance. Using novel, individual-level network data, we measure a firm's social capital derived from employees' connections with external stakeholders. Our directed network data allow for differentiating those connections that know the employee and those that the employee knows. Results show that firms with more employee social capital perform better; the positive effect stems primarily from employees being known by others. We provide causal evidence exploiting the enactment of a government regulation that ...
Discussion Paper
Modeling Bank Stock Returns: A Factor-Based Approach
In this note, we introduce a factor asset pricing model to analyze risk-adjusted returns on bank stocks. Given their high-frequency availability, bank stock returns offer a valuable lens into the risk exposures and dynamics of the banking sector.
Discussion Paper
What Do Bank Stock Returns Say About Monetary Policy Transmission?
In this note, we build on the factor-based asset pricing framework introduced in our companion piece, "Modeling Bank Stock Returns: A Factor-Based Approach" (Ehresmann, Morelli, and Wang, 2025), to examine the transmission of monetary policy (MP) shocks through bank stock returns. Specifically, we explore two core questions.
Working Paper
Indirect Credit Supply: How Bank Lending to Private Credit Shapes Monetary Policy Transmission
This paper examines how banks’ financing of nonbank lenders affects monetary policy transmission. Using supervisory bank loan-level data and deal-level private credit data, we document an intermediation chain: Banks lend to Business Development Companies (BDCs)—large private credit providers—which then lend to firms. As monetary tightening restricts bank lending, firms turn to BDCs for credit, prompting BDCs to borrow more from banks. This intermediation chain raises borrowing costs, as banks charge BDCs higher rates, which BDCs pass on to firms. Consistent with this pass-through, ...