Research

Working Papers

Government Efficiency in Facilitating Innovation

Abstract: Government's optimal role in facilitating innovation has been well characterized from a theoretical perspective: they should complement private sector spending by subsidizing high risk projects which have large positive externalities, and which firms would not undertake otherwise. However, whether federal R&D funding acts as a complement or a substitute for private funding has remained an open question. The key challenge of the literature on this topic has been to address endogeneity concerns due to selection in which firms become government contractors. I use the state-level retirements of Supervising Contract Officers as an exogenous shock to firm revenue to measure the causal impact of government funding on private investment. I find that an influential employee retiring predicts a $22 million decrease in contract revenue the next period. Then, I estimate the causal impact of $1 million in additional contract revenue and find that it increases firm R&D expense by a modest $4,000. This suggests that the complementarity between federal funding and private innovation is likely limited in practice.

Investor Attention and Mutual Fund Performance (with George Aragon and Yuri Tserlukevich)

Abstract: We extend Berk and Green's (2004) model by integrating Miller's (1977) insight on the effects of heterogeneous beliefs and restricted short sales, proposing that higher investor attention not only attracts optimistic inflows but also inflates assets under management and diminishes future fund performance. Using Abnormal View Share (AVS) - a novel measure of investor attention based on SEC EDGAR view data - we find that increased AVS predicts greater fund inflows in the following month but lower returns thereafter. This work underscores how limited attention and optimism impact fund valuations, advancing the intersection of investor attention and market dynamics theories.

Arizona State University