Research
Working Paper. With Alexander Montag, Maya Haran Rosen, and Osnat Zohar
This study investigates how venture capital (VC) fund age influences investment outcomes, focusing on younger funds’ ability to attract higher-quality startups and increase the likelihood of successful exits. We present a theoretical model suggesting that funds attract high-quality startups early in the funds' lifecycle by offering extended monitoring and greater opportunities for follow-on investments---channels that are further strengthened by entrepreneurs’ selection of younger funds. Using a comprehensive dataset of VC funds, we find empirical evidence supporting our model, showing that investments made earlier in a fund’s lifecycle achieve significantly higher exit rates and receive more follow-on funding. By controlling for fund and startup characteristics and interacting fund age with industry-level financial intensity and fund specialization, we identify the two channels and quantify the role of entrepreneurs' selection of funds in the startup-VC matching process. This research provides novel insights into the temporal dynamics of VC value creation and how investment timing and entrepreneurial choices influence startup outcomes.
Illustration of how beliefs about startup quality evolve throughout the fund’s lifecycle.
JAMA Psychiatry 2022. With Rebecca Waller, Elina Visoki, and Ran Barzilay
Question Are state-level legislative policies surrounding abortion or restricted access to reproductive care related to women’s suicide rates in the United States?
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Findings In this longitudinal ecologic study with a difference-in-differences analysis, the enforcement of laws restricting access to abortion and reproductive care from 1974 to 2016 was associated with suicide rates among reproductive-aged women but not women of postreproductive age.
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Meaning Restrictions to reproductive care represent a macro-level risk factor for suicide among reproductive-aged women, which may have implications for suicide prevention strategies in this population, particularly as the issue remains at the center of divisive debate in the United States.
The coefficients and 95% CI of a dynamic difference-in-differences analysis of suicide rates regressed on the target group of women aged 20 to 34 years.
98(4) Indiana L. J. 1089 (2023). With Itay Ravid
In Dobbs v. Jackson Women’s Health Organization, the Supreme Court is currently considering a Mississippi law that prohibits nearly all abortions after the 15th week of pregnancy, in direct contradiction to the holding in Roe v. Wade. Among the many arguments raised in Dobbs in an attempt to overturn Roe, the State of Mississippi argues that due to “the march of progress” in women’s role in society, abortion rights are no longer necessary for women to participate equally in economic life. It has also been argued that there is no empirical support to the causal relationship between abortion rights and women’s economic success in society.
This Article is the first to empirically examine both these arguments, and it provides compelling evidence to reject each of them. To do so, we adopt a novel methodology that utilizes the enforcement of Targeted Regulation of Abortion Providers (TRAP Laws) as proxies for abortion restrictions. We study the effects of over forty years of legislation on the participation of American women in the labor market.
The results are striking. Our findings strongly and consistently show that the introduction of TRAP laws has widened the gender pay gap between women at childbearing age and the rest of the population. We also reveal the role of TRAP laws in pushing these women out of the labor force – or at least into choosing lower-paying jobs – as possible explanations for this gap. Ultimately, these findings foreshadow the future landscape of gender inequality in the United States if Roe is overturned.
Relative propensity of women at childbearing age not to be in labor force in states that enforced TRAP Laws
75(4) UC L. J. 977 (2024). With Itay Ravid
Access to credit—that is, the ability to receive financial leverage that could help jump-start businesses—is one of the most significant barriers preventing millions of American women from opening new businesses. Congress has attempted to address this issue since the 1970s, with legislation like the Equal Credit Opportunity Act (ECOA). Nevertheless, studies continue to show a persistent gender gap in access to credit. Scholars have offered a host of explanations for this gap, focusing on both the supply and demand sides of the equation.
This Article contributes to this growing scholarly exploration by offering a new, overlooked explanation for this gap: namely, it links access to reproductive care—particularly the right to abortion—with access to credit. To investigate this connection, this Article adopts a three-stage novel empirical methodology that utilizes the enactment of Targeted Regulation of Abortion Providers (“TRAP Laws”) as proxies for abortion restrictions. We find consistent evidence that restrictions on access to reproductive care reduce women’s ability to raise capital and leverage their business endeavors. As such, these restrictions widen the gender gap in entrepreneurship and diminish potential economic growth.
This Article thus explores an impact that seems to have slipped under the radar of scholars and policymakers evaluating the negative impact of the decision in Dobbs v. Jackson Women’s Health Organization on women’s equality. Given the potential expansion of abortion restrictions across the nation, these findings are particularly noteworthy.
Legislative efforts, like the ECOA, seem insufficient to overcome the additional barriers that laws restricting access to reproductive rights create. Accordingly, to overcome the gender gap in access to credit, legislative and policy efforts must address more deeply entrenched discriminatory patterns and cultural norms. To that end, this Article proposes three modes of action that could potentially mitigate the devastating effects on women’s equal participation in the economy in a post-Dobbs era: (1) government-led action; (2) civil society-led efforts; and (3) business owners-led initiatives.
Changes in leverage ratio pre and post a TRAP law enactment.
Journal of Financial Economics, Volume 140, Issue 3, 2021
Better access to reproductive healthcare increases women's propensity to become entrepreneurs. Access correlates positively with female entrepreneurial activity and negatively with female entrepreneurial age. Examining firm size and personal income suggests it also improves success of female-led businesses. None of these results hold when tested on men, women above 40, or other placebo professions. To establish causality, I exploit Roe v. Wade, state laws restricting abortion providers, and an index tracking state-level regulation of reproductive care. All three analyses suggest that policies securing better reproductive care enable more women to become entrepreneurs. I conclude by discussing various possible channels and mechanisms.
Percentage of female entrepreneurs over the average level of the access index for the years 2006-2017.
The Journal of Business, Entrepreneurship & the Law, Volume 11, Issue 2, 2018. With Alon Brav and J.B. Heaton
The Brokaw Act was proposed legislation aimed at “financial abuses being carried out by activist hedge funds who promote short-term gains at the expense of long-term growth . . . .” Sponsoring Senators named it after a small town in Wisconsin that, according to the Act’s sponsors, was decimated by the actions of a hedge fund activist in shutting down the local paper mill with a loss of hundreds of jobs. The Brokaw Act represented the first attempt at federal legislation aimed at restricting hedge fund activism. Since then, new and similar bipartisan proposals have appeared as have threats of state regulation. In this Comment, we show that the occurrences in Brokaw, Wisconsin are far different from the representations the sponsoring Senators made. Hedge fund activists played essentially no role in the closure of the Brokaw mill. To the contrary, the paper company’s incumbent management closed the mill—just the latest in a series of management’s mill closures—amid an industry-wide decline that made the mill uneconomic to keep open. We then consider two claims of hedge fund activism’s opponents that appear to motivate the Brokaw Act. The first claim—that hedge fund activists typically use the ten-day disclosure period of Rule 13d-1 to accumulate positions significantly in excess of 5%—has been the subject of empirical study and is incorrect. The second claim—that hedge fund activists often form a “wolf pack” in the pre-disclosure period to act collectively against a target—is also without support from empirical evidence. Neither claim warrants legislative action. Finally, we consider two additional parts of the Brokaw Act. The first would expand the concept of beneficial ownership to include certain derivatives linked to the value of equity securities, while the second would require increased disclosure of short positions in the stock of public companies. Neither activity plays an important role in hedge fund activism, and both require additional study before the passage of any legislation.
Employment Trends in the Paper and Paper Products Industry.
Working Paper, with Nir Sharon
The article derives the optimal allocation of projects when two firms are engaged in a strategic alliance with an asymmetric liquidation option. Our model solves for the optimal allocation when a manager can liquidate the internally managed project and reallocate the funds to the alliance but has no control over the alliance's assets. We find the somewhat surprising result, which in some cases, the probabilities of success of the two projects are irrelevant to the initial allocation of the projects. Finally, we parametrize our model and demonstrate graphically how the choice of projects vary across the various scenarios.
The decision as a function of γ−1 and μ. The highlighted region represents areas where it is optimal to operate the mainstream project internally.