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*.

I use new hand-collected data on banks' mobile apps to analyze how financial services digitalization has changed traditional banking. I show that small community banks (SCBs) have been slow to provide mobile banking apps compared to larger banks (LBs). As a result, they have lost both deposits and small business lending. In contrast, LBs have gained deposits and small business loans by substituting SCBs' traditional branch- and relationship-based model with financial technology. However, this substitution appears incomplete, as I show that the local economy benefits less from digital progress in areas that relied more on SCBs beforehand.

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

with Rawley Heimer (Arizona State University)

MFA 2021*, SFS Cavalcade 2021*, FMA 2021*, EFA 2022*, MarketWatch, Business Scholarship Podcast.

Consumers seek restitution for disputed financial services by filing complaints with the Consumer Financial Protection Bureau (CFPB). We find that filings from low-income and Black zip codes were 30% less likely to be resolved with the consumer receiving financial restitution. The gap in financial restitution was scarcely present under the Obama administration, but grew substantially under the Trump administration. We attribute the change in financial restitution under different political regimes to companies anticipating a more industry-friendly CFPB, as well as to the more industry-friendly leadership of the CFPB achieving less financial restitution for low-income and Black filers. The financial restitution gap cannot be explained by differences in product usage nor the quality of complaints, which we measure using textual analysis.

* presented by me.

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, Korajczyk, and Sadka (Journal of Finance, 2010) document distinct patterns in the cross-section of stock returns, that is, return continuation at half-hour intervals that are exact multiples of a trading day and reversal over other half-hour intervals, lasting for over a week. This paper generalizes the framework to include the overnight period as an additional return interval, extends the sample period to 2020, and considers recent measures of retail trading as an explanation. We find that the previously documented patterns continue to hold in the generalized framework through the extended sample. Moreover, after the opening half hour and especially at close, an interaction with retail trading carries about half the magnitude of the return continuation at half-hour intervals that are exact multiples of a trading day, albeit negatively. It carries roughly the entire magnitude of the return reversal at other half-hour intervals, albeit positively. Therefore, the previously identified intraday return patterns are far less pronounced for stocks with high retail trading, lending support to the conjecture that they are likely generated by institutional trading.