Research

Working Papers

• "Signalling with words or debt? The effect of voluntary disclosure on external public financing choices," Job Market Paper.
  Draft available upon request
  Summary

  

  This paper examines how managers’ voluntary disclosure choices shape subsequent capital structure decisions between debt financing and equity financing when firms need to raise external capital in public markets. I posit that managers of good-type firms (firms with higher future profitability) have two signaling options: (1) debt financing or (2) disclosure and equity financing. Because disclosure resolves information asymmetry, it makes equity issuance cheaper. Therefore, disclosure complements equity and substitutes for bonds. The optimal choice depends on the relative costs of the two options. Using data on U.S. public firms from 2003 to 2024, I show that good-type firms exhibit a positive relation between disclosure and equity issuance and a negative relation between disclosure and bond issuance. Cross-sectional tests based on disclosure costs and default risk, as well as two regulatory shocks—the 2005 Securities Offering Reform and the 2017 Tax Cuts and Jobs Act—support the prediction that firms substitute between bond financing and the disclosure-equity bundle. These findings reconcile empirical inconsistencies in the pecking-order theory by showing that good-type firms prefer equity when it is bundled with voluntary disclosure.

  Presented at: Wharton Accounting Workshop (2025), Doctoral Seminar in Accounting Research Zurich (2024)

• "I need a network: determinants and real effects of bond roadshows," with Mingxuan Ma and Sike Chen.
  SSRN link
  Summary

  

  We examine why firms hold roadshows when issuing bonds and the ex-post effects on the cost of debt. Surveys conducted with both bond issuers and underwriters reveal divergent priors regarding the reasons for bond roadshows. Underwriters think bond roadshows serve an informational role, while bond issuers believe they serve a marketing role. We test these competing hypotheses in the German public corporate bond market over 2014–2020. Consistent with the marketing view, we find that bond roadshows increase investor attention and primary market demand, and help issuers build networks of institutional investors. On the real effects of bond roadshows, we find that they are associated with a lower cost of debt and are not associated with underpricing, since they compensate primary-market investors through early awareness provision. To our knowledge, this is the first study to jointly analyze the determinants and consequences of bond roadshows. We contribute to the literature by establishing that bond roadshows are structurally distinct from equity roadshows, which serve an informational role and are associated with underpricing.

  Presented at: poster session of the Rising Scholar Conference in Finance (2025), Doctoral Seminar in Accounting Research Zurich (2025)*

• "Mandatory Sustainability Reporting and Project Selection," with Hui Chen.
  SSRN link
  Summary

  

  We examine the implications of a regulatory shift in sustainability reporting from voluntary to mandated regime in a market with responsible investors. A myopic manager must choose between a brown project and a green project, both of which generate an uncertain financial return and an environmental externality. Since the information quality on externality is not perfect, the manager always under-invests in the green project in both reporting regimes, but more severely so in the voluntary regime due to the optional value voluntary disclosure provides in concealing bad information. Adopting mandatory disclosure thus improves firms' sustainability performance and investor welfare. However, considering the costs associated with mandatory disclosure, it is more efficient only when the quality of a firm's sustainability information is sufficiently high. To ensure an efficient shift to sustainability disclosure mandates, firms should first improve the quality of their sustainability information systems.

  Presented at: Raising Scholars Conference on Sustainability Finance Zurich (2024), 15th Workshop on Accounting and Economics WU Vienna (2024), Doctoral Seminar in Analytical Accounting Research Zurich (2023), 1st Interdisciplinary Workshop on Sustainability and ESG Dynamics LIUC Università Cattaneo Milano (2023).

Work in Progress

• "Environmental feedback effect," with Daniela Zipperer.
• "When horizons converge: investor selection, firm output and aggregate welfare," with Igli Bajo.