We study the fiscal debt crisis in the US during early 2023 on Money Market Funds (MMFs). We report a spike in yields by approximately 150 basis points for MMFs investing in federal government securities. In addition, due to the debt crisis, investors started withdrawing money from treasury funds due to a "flight to safety." However, there is no statistically significant asset flow from the government and prime MMFs. Finally, we discuss the implications of our results. 

( Updated draft is coming soon..)

This paper studies the effects of the 2023 US banking crisis on the money market fund (MMF) industry. In a novel result, MMFs sponsored by banks experienced significantly higher fund outflow after the crisis began. In addition, funds with an ex-ante exposure to the financial sector saw large fund outflow. Furthermore, Funds holding higher illiquid assets were subjected to higher investment outflow. Finally, we found evidence that the liquidity-contingent fees imposed during the 2016 MMF reforms exacerbated the run on prime MMFs. Therefore, we provide evidence of the limitations of the 2016 MMF reforms.

The United Kingdom (UK) Prime Minister announced "the Growth Plan," which included borrowed spending and tax cuts, in September 2022. This study evaluates the spillover effects of this fiscal shock on Money Market Funds (MMFs). Constant Net Asset Value (CNAV) MMFs were hitherto assumed to be immune to the runs. However, we find that the Pound sterling-dominated CNAV MMFs faced investment outflow, and the Bank of England's interventions reversed the money flow. MMFs that have more liquidity faced fewer redemptions. MMFs whose liquidity approached the regulatory threshold faced higher redemptions. Finally, we find that MMFs exposed to the UK face capital flight. Therefore, the results of this paper show that MMF reforms, such as redemption gates, had limited effectiveness during the crisis. 

From 2016 to 2019, the United States and China engaged in a trade conflict. As a result of tariffs imposed by the US and retaliation from China that started in 2018, the US economy witnessed an unprecedented increase in trade policy uncertainty (TPU). Using a new instrumental variable, I find a significant negative relation between aggregate TPU and corporate investment. Deviating from the existing literature in corporate finance that uses measures of overall economic policy uncertainty (EPU), I use a focused measure of TPU to show that a real options channel partly drives the relationship between uncertainty and corporate investment. Furthermore, I identify a foreign exchange channel: businesses more exposed to exchange rate fluctuations are also more susceptible to the negative effect of TPU. These findings are robust to controlling for firm-level and time-level fixed effects, using an alternative definition of aggregate TPU and firm-level (rather than aggregate) TPU.

Do corporate financial decisions made by female executives differ from that of male executives? This paper tries to answer the question by using firm-level data. Using a unique instrumental variable, I identify a few critical differences between corporations run by gender-homogeneous versus gender-heterogeneous executive boards. First, the firms run by heterogeneous groups issue less debt. Second, the heterogeneous boards experience positive asset growth. However, there is no significant difference between the two groups when making an acquisition, market leverage, and equity issuance decisions. These results are robust to industry-level fixed effects, an alternative definition of the gender diversity of a corporate board, and whether a firm has a female CEO. Moreover, when faced with uncertainty related to the pandemic, both groups make similar capital structures and corporate investment decisions. The results of this study point to the 'Male Executive Overconfidence' theory in financial economics.

We use novel hand-collected data on political connections to find politically connected firms earn more positive (less negative) Cumulative Abnormal Returns (CARs) than those without political connections as a response to favorable (unfavorable) macroeconomic news. Using the Difference-in-Difference technique, we show that firms with political ties have performed better during post-pandemic recovery. This paper employs machine learning algorithms to identify the mechanisms behind these results. Our work theorizes that corporate executives either gather helpful information about policy formulation from their interactions with government officials or exploit economic favors in a quid-pro-quo arrangement.