Bio
I am a Ph.D. candidate at Gabelli School of Business, Fordham University.
My current research focuses on the interaction of behavioral and environmental economics with finance.
Areas of interest: Empirical Corporate Finance, Corporate Governance, Corporate Social Responsibility (CSR), Environmental, Social and Governance (ESG), and Behavioral Economics.
I will be available for interviews at AFA Annual Meeting 2022 (Boston) and FMA Annual Meeting 2021 (Denver).
Curriculum vitae (Short) (Long) (Updated: Aug, 2021)
Email: jaswani@fordham.edu
Working Papers
Media Coverage: Oxford Business Law Blog, BeingBrief.in
Abstract (click to expand): This paper examines whether similarity in social identities between a manager and the board affects executive compensation, firm value, and agency frictions. By using a novel dataset on surnames with multiple identities (native language, native place, and caste), developed by merging micro census data of 474 million Indians with data from Linguistic Survey of India (LSI), I provide evidence that the firms with a shared group identity between a manager and the board do well compare to other firms. Due to in-group favoritism, managers of such firms earn higher compensation. These results are more substantial for group identity based on native language and native place. I also find that the firm benefits from taking on the cost of in-group favoritism as it reduces the agency frictions and increases firm value in the long run. These results are robust to the endogeneity test, managerial influence on firm, college ties, ties from past employment, and various other checks.
Code
Seminars: Stevens Institute of Technology
Conferences: AFA 2021 (Poster Session), FMA 2020 (Ph.D. Consortium, Proposal), Royal Economic Society (RES) Annual Meeting 2021, Australasian Finance and Banking Conference (AFBC) 2020, The Econometric Society Meet 2021 (Asia), The Econometric Society Meet 2021 (North America).
(with Shivaram Rajgopal and Aneesh Raghunandan)
Abstract (click to expand): Socially conscious investors are interested in assessing whether reducing firms’ carbon emissions can improve stock returns and operating performance. An influential emerging literature documents strong correlations between emissions and both stock returns and operating performance. We re-examine that data, using a sample of 2,729 U.S. firms from 2005-2019, and conclude that these associations are driven by a combination of three factors. First, unscaled raw emissions (in metric tons of CO2), the variable typically used in academic literature, is correlated with stock returns but emissions intensity (emissions scaled by firm size), a more commonly used measure in practice, is not. Second, stock returns are correlated only with unscaled emissions estimated by the vendor compiling emissions data, but not with unscaled emissions actually disclosed by individual firms; we show that vendor-estimated emissions exhibit systematic differences from firm-disclosed emissions. Third, the positive correlation between stock returns and raw emissions reflects industry clustering in that stock returns of firms in industries with high emission intensity (e.g., energy and mining) have lagged behind those of firms in industries with low emission intensity (e.g., technology). Along similar lines, the associations between emissions and operating performance disappear once we account for firm size, industry clustering and estimated versus disclosed emissions. Investors might want to be cautious about assuming that carbon emissions are priced by equity markets. To be clear, we say nothing about the desirability (or lack thereof) of disclosing and/or cutting carbon emissions.
Seminars: Ohio State University, University of Sydney
Conferences: MIT Asia Conference in Accounting 2021 (Scheduled), FMA 2021 (Scheduled)
(with Alona Bilokha, Mingying Cheng, and Benjamin Cole)
Current Version: October 2020
Submitted
Abstract (click to expand): Calls for conscious capitalism have spurred numerous innovations in firm governance. In this study, we assess whether there is a cost to investors for one such innovation—state-level constituency statutes that permit board members to consider the interests of all stakeholders—not just shareholders—when making decisions. As competing demands from stakeholders increase, we argue monitoring by boards will be hampered, resulting in reduced transparency to investors by managers. Using a sample of U.S. publicly traded firms (1981-2010), we observe significant decline in transparency by firms incorporated in states with such statutes. While we find firms experiencing losses use conscious capitalism as an umbrella to remain opaque, firms that need financial markets for capital remain transparent despite such statutes. Our paper contributes to the debate on the ‘objective of the firm’ by showing that adopting stakeholder governance without addressing its challenges may lead to managerial entrenchment and affect transparency negatively.
Conferences: AFA 2021 (Poster Session), FMA 2019, MFA 2021.
(with Sudip Gupta, Iftekhar Hasan, and Anthony Saunders)
Media Coverage: Columbia Law School (CLS) Blue Sky Blog
Submitted
Abstract (click to expand): Do changes in the IPO regulatory environment affect private firms’ exit choices, bargaining abilities, and valuations? Using the JOBS Act as an exogenous shock to the exit decisions among private firms, we observe that their valuations as M&A targets increase after the Act, negatively affecting acquirer wealth gains. These results are more prominent for VC-backed targets. We also find that stock (cash) deals decrease (increase) for private firms after the Act. Our results are robust to endogeneity concerns, sampling bias, alternative measures, placebo tests, merger waves, and various other vigorous checks.
Conferences: MFA 2018, FMA 2018, Australasian Finance and Banking Conference (ABFC) 2018.
(with Franco Fiordelisi)
Media Coverage: Oxford Business Law Blog
Submitted
Abstract (click to expand): This paper examines the type of firm culture which leads to corporate misconduct activities. Using the management's tone in the 10-K report as a proxy for culture, we find that higher internal “compete” culture (or tournament culture) increases corporate misconduct activities such as restatements, earnings management, and accounting fraud by increasing the firm risk.The results are robust to external validity tests, firm-specific systematic risk, market competition, governance characteristics, CEO effects, and endogeneity concerns.
Conferences: FMA 2020, Financial Research Group (FRG) Field Workshop 2020.
(with Iftekhar Hasan and N.K. Chidambaran)
Media Coverage: NSE White Paper Series
Abstract (click to expand): This paper examines how debt markets price firms' Corporate Social Responsibility (CSR) activities, in a setting where it is not a strategic choice but rather mandated by regulation. Using both a difference-in-difference and a regression discontinuity empirical specification, the paper reports that binding CSR rule increase yield-spreads on bonds by 22 basis points. Firms with a business group affiliation show a reduction in yield spreads and state-owned companies an increase in yield-spreads. The increase in yield-spreads is mitigated by good governance with well governed firms having lower yield-spreads. These findings add to the contribution of Manchiraju and Rajgopal (2017), which reports that such mandatory rules are detrimental to stockholders’ wealth.
Research Grant: NSE - NYU Stern research grant for studying Indian capital markets.
Conferences: New York University (NYU) - National Stock Exchange (NSE) Conference 2018, Global PhD Colloquium 2019, FMA 2020.
Work in Progress
'The Devil is in the Details': Corporate Green Bonds Conundrum
(with Sanjai Bhagat)
