Thread by @lukestein

1/N: Ten great papers (from 400+ submitted!) at the ASU Finance Conf., but I want to highlight two that show the breadth of financial economics:
- The Impact of the Opioid Crisis on Firm Value and Investment
- Organized Crime and Firms: Evidence from Italy
blogs.wpcarey.asu.edu/financeconfere…

2/ Elena Simintzi presents “The Impact of the Opioid Crisis on Firm Value and Investment” (with Ouimet and Ye).

Uses geographic variation in opioid use/legislation to understand their effect on firms.
blogs.wpcarey.asu.edu/financeconfere…

3/ Counties hardest hit by opioid epidemic have falling quantity and quality labor supply.
→ Local firms have lower performance and value.
→ Local firms invest in physical capital and automation to substitute away from labor!

4/ Also, consistent with the suggested mechanism: When states pass opioid-reducing legislation, local firms’ stock prices increase, especially at labor-intensive (/low-IT) firms.

This great paper connects evidence from firm behavior and financial markets.

5/ An amazing discussion. Miao (Ben) Zhang does *new analysis* to suggest that exposure to import competition (using Autor 🇨🇳🇺🇸 and Bustos 🇧🇷🇦🇷 shocks) might play a role, affecting opioids, workers, firm values, and automation.

6/ Pablo Slutzky presents “Organized Crime and Firms: Evidence from Italy” (with Stefan Zeume)

OC has revenue ≈1.5% of world GDP [!], and OC associated with poor economic growth.

Why? In particular, how does OC affect firms?
blogs.wpcarey.asu.edu/financeconfere…

7/ Uses panel variation in local anti-mafia police efforts using data on 30,000+ asset confiscations in 400+ municipalities. Outcomes from financial statements on 800,000+ firms (incl. all LLCs!).

8/ Anti-mafia enforcement
→ Much higher firm turnover (more entry and more exit)
→ More innovation
→ More competition in public procurement auctions

Mafia seems to protect firms in non-tradable sectors from competition

Firms founded when local mafia powerful more affected

9/ We saw eight great presentations on the cross section of expected returns, multi-horizon risk-return tradeoffs, delegated asset management, business groups, investment manager compensation, sovereign debt, managerial decision-making, human capital in financial markets.

So…

10/10 Financial economists work on the “traditional” topics you might have in mind, and I love and do that kind of research. (E.g., corporate governance, banking/intermediation, asset pricing.)
But we work on all kinds of other stuff too!
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