Research

Working Papers

Keeping Up in the Digital Era: How Mobile Technology Is Reshaping the Banking Sector (JMP)

• BC Brownbag*, BC-BU Green Line Macro Meeting*, Colorado Finance Summit 2022 (Job Market Session)*, MFA 2023*, EFA 2023*, FMA 2024*, Sydney Banking and Financial Stability Conference 2024* (scheduled).

I hand-collect data on the roll-out of mobile banking apps in the U.S. over the previous decade and pair them with local positive shocks to the importance of mobile services. I find that digital competition among banks increases in response to these shocks. Specifically, small community banks without or with low-quality apps (SCBs) lose deposits and small business lending to nearby larger and better-digitalized banks (LBs). Additionally, I provide evidence of a paradigm shift in local lending practices. While SCBs decrease their branch-based small business lending activities, better-digitalized LBs increase small business lending only in areas where they do not operate branches. A significant gap in local economic growth arises as LBs do not seem able to fully compensate for the decrease in SCB lending under this paradigm shift. 

The Financial Restitution Gap in Consumer Finance: Insights from Complaints Filed with the CFPB

with Rawley Heimer (Arizona State University)

• MarketWatch, Business Scholarship Podcast

• MFA 2021*, SFS Cavalcade 2021*, FMA 2021*, EFA 2022*, Treasury-OCC*.

Who benefits most from government-facilitated dispute resolution in financial services? Using confidential internal data from the Consumer Financial Protection Bureau (CFPB), we find that high-income, highly educated, and white consumers (high-SES) are nearly twice as likely to secure financial restitution after filing complaints. A financial sophistication channel partially explains these disparities, as high-SES consumers are more likely to seek financial compensation and identify potential fraud. However, CFPB investigations reveal that companies also disproportionately mishandle complaints from low-SES consumers. Further, we employ a difference-in-differences framework to examine the impact of formal reports highlighting the complaint handling deficiencies sent to companies following the investigations. These nudges significantly increase financial restitution but primarily benefit high-SES filers. Our results underscore the unequal beneficiaries of government interventions, highlighting the complementary role of financial sophistication.

Work-in-Progress

Who generates the predictability in the cross-section of intraday stock returns?

with Steven L. Heston (University of Maryland), Robert A. Korajczyk (Northwestern University), Ronnie Sadka (Boston College)

Heston et al. (2010) find a pronounced intra-day pattern in stock prices in which stocks with higher-than-average returns in half-hour time period of the trading day tend to have higher-than-average returns in the same half-hour time period of the trading day on subsequent days. The pattern in statistically significant for at least 40 trading days. We study the same phenomenon, out of sample, over the period 2010 to 2020. This allows us determine if the results are robust, as opposed to either subsequently arbitraged away or due to data snooping. We find that pattern persists. We expand the analysis to include the overnight period and investigate a set of possible causes of the pattern such as the influence of institutional and retail traders, short selling costs, periodicity of the news cycle.

Discussions