Local Industry Bias in Investor Behavior: Evidence from Mutual Funds (Paper)
This paper documents that mutual fund managers extrapolate from local industry conditions when making portfolio investment choices. I construct a dataset linking mutual fund holdings, manager locations, and industry employment in the fund manager's county to analyze how local industry trends influence investment in the industry. I find that local industry employment share positively influences mutual fund managers' industry portfolio share--moving from the 25th to 75th percentile of industry employment share increases managers' portfolio share allocated to an industry by 9.3% of mean investment in a single industry. This finding is not driven by home bias (investment in local stocks). Results from tests of fund returns by the extent of industry portfolio share sensitivity to local industry employment share are consistent with an extrapolation channel. Funds in counties with the highest sensitivity have lower annualized mean returns of 1.12%-1.56% relative to funds in counties exhibiting the least sensitivity.
Government-Induced Credit Supply Shocks and Small Business Activity (Paper)
This paper studies the effect of a supply-side shock to small business lending from a government loan pilot program on borrowing and the composition of establishments.
Work in Progress
The Real Effects of Bank Litigation
I study the effect of a bank undergoing litigation on households and small businesses when the bank's customer base is highly localized
Geographic Dispersion of Lenders and Loan Offers
I study the effect of the geographic dispersion of potential lenders on the pool of loan offers to a household.