Curriculum Vitae (2024.09)
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Academic Appointments
Assistant Professor of Finance (2020 - present)
HOPE Teaching Award Nominee (2024)
SMU Cox School of Business
Dallas, TX

Education
PhD Finance and Business Economics (2020)
David Bonderman Distinguished Leader PhD Fellow
University of Washington
Foster School of Business
Seattle, WA
BBA Finance and Economics (2010)
Certificate in Personal and Organizational Leadership
University of Georgia
Terry College of Business
Athens, GA

Research Interests:

Corporate Finance, Payout Policy, Mergers and Acquisitions, Taxation, Conflicts of Interest

Working Papers:

1. State Shareholder Taxation and Corporate Payout Policy
   (solo-authored)
   Unlike dividends, share repurchases embed the right to time and locate state individual income taxes, letting shareholders mitigate tax costs. A parsimonious model predicts a negative relation between state tax rates and dividend payouts. Estimates from a natural experiment around the 2017 Tax Cuts and Jobs Act are consistent with the model predictions. The estimates show substitution to repurchases in higher tax states. Firms with high institutional ownership pay dividends despite high state taxation. Abnormal returns around increased dividend announcements relate positively with state tax rates after 2017, as predicted by dividend signaling models.

   Presentations: Lone Star Finance Conference (2023), University of Washington Summer Alumni Meeting (2024)
   

2. The Economic Effects of Political Polarization: Evidence from the Real Asset Market
   (with Ran Duchin, Abed El Karim Farroukh, and Jarrad Harford)
   Revise and Resubmit at Journal of Finance
   Politically divergent firms are considerably less likely to merge. This effect concentrates in years with high political polarization, and when firms plan to integrate their operations. The results hold after including industry-by-year and deal fixed effects, and controlling for geographical distance, product similarity, and nonpolitical differences in corporate culture or ESG policies. Following politically divergent mergers, employee turnover is higher, particularly of employees whose views misalign with the merger partner. Overall, the rise in political polarization changed the landscape of the real asset market in the U.S., with fewer mergers between politically divergent firms or firms from politically divergent states.

   Presentations (by me or coauthors): 11th Miami Behavioral Finance Conference (2021), Finance Down Under Conference (2022), NHH Corporate Finance Conference (2022), the American Finance Association Meetings (2023), the European Finance Association Meetings (2023), Northeastern University, University of California Irvine, University of Connecticut, University of Colorado, University of Houston, University of Macau, University of Texas at Dallas, University of Texas at El Paso, George Mason University, American University of Beirut, Singapore Management University, National University of Singapore, National Central University, and West Virginia University.
   

3. Do Commissions Cause Investment Adviser Misconduct?
   (solo-authored, job market paper)
   Sales commissions may present a conflict of interest that allows investment advisers to obtain rents from uninformed clients. Alternatively, commissions might be a contracting solution to motivate information provision. To analyze the relation between commissions and adviser misconduct, I exploit quasi-exogenous changes in individual investment advisers' compensation arrangements caused by mergers between large registered investment advisory firms. The opportunity to earn sales commissions increases the probability that an adviser engages in misconduct, but competition is an important mediator. In regions with greater competition, sales commissions decrease misconduct claims. Increased misconduct from commissions is concentrated among low-experience advisers and male advisers. Damages paid out in claims involving commission-motivated advisers are $25,013 (36%) greater than other claims. The experimental design rules out latent firm and market explanations. Overall, I find that the connection between conflicts of interest and information provision depends on the competitive environment.

   Awards: PhD Forum Prize for best paper, AFBC (2019)
   Presentations: 32nd Australasian Finance and Banking Conference + PhD Forum (2019), American Finance Association PhD Poster Session (2020), Southern Methodist University, University of South Carolina, University of Arkansas.
   

4. Equity Ownership in IPO Issuers by Brokerage Firms and Analyst Recommendations
   (with Qiang Kang, Xi Li, and Ronald W. Masulis)
   We examine recommendation informativeness of analysts affiliated with brokerage firms having venture capital ownership in initial public offerings (IPOs). Using a difference-in-differences design around IPO lockup expirations, we find that affiliated analyst recommendations yield larger abnormal return reactions than unaffiliated analyst recommendations during the lockup period, especially for issuers with greater information asymmetry. The difference disappears after lockup agreement expirations when venture capitalists generally sell or distribute their shareholdings. The results suggest that, despite potential conflicts of interest, combining venture capital investment and analyst coverage enhances the credibility of affiliated analysts and benefits IPO issuers and public investors.

   Presentations (by me or coauthors): Financial Management Association Meetings, CAPANA Conference, China International Conference in Finance, European Winter Finance Summit, The Financial Intermediation Research Society Conference, Conference on Securities Markets: Trends, Risks, and Policies, Chinese University of Hong Kong (Shenzhen), City University of Hong Kong, Hong Kong University of Science and Technology, McMaster University, Nanyang Business School, Northeastern University, Shanghai University of Finance and Economics, University of Arkansas, University of Central Florida, University of Miami, University of South Florida, University of Wisconsin at Milwaukee, Xiamen University.
   

5. Does a Cocktail to-go come with a Free Lunch?
   (with Yufeng “Sophia” Mao)
   This paper studies the consequences of to-go alcohol policies in the United States. Allowing consumers to take beverages with them from restaurants eases access to alcohol, resulting in greater excise tax revenues. The support of restaurants during the Covid-19 crisis might have had substantial spillover benefits as measured by general sales tax revenues. However, the benefits come at a social cost; to-go alcohol policies appear to increase incidences of drinking and driving. The number of fatalities from collisions involving a drinking driver increases with the implementation of to-go alcohol policies, suggesting to-go alcohol does not come with a free lunch.
   

Works in Progress

• Organizational Forms, Taxation, and Capital: Evidence from Publicly Traded Partnerships
  (solo-authored)
  I study the allocation of capital across organizational forms using a set of publicly traded partnerships (PTPs) in the energy industry. I track the relative tax efficiency of noncorporations to corporations, showing a steady decline since 1987. As the tax efficiency of an organizational form increases, ceteris paribus, its share of capital should increase. However, households invest through institutions, nesting organizational forms and altering tax efficiency. I show that noncorporate capital becomes sensitive to tax efficiency only after a reform to institutional taxation in the American Jobs Creation Act. The results highlight the importance of institutions as tax conduits.
  
  

• Supermajorities, Partisanship, and Municipal Borrowing Costs
  (with Abed el Karim Farroukh)

Address:
Office 2183
Edwin L. Cox School of Business
Southern Methodist University
6214 Bishop Blvd
Dallas, TX 75275

Contact
tdpatel@smu.edu
tarun625@gmail.com
(404)-641-6431