Spillover effects in empirical corporate finance

Reporting Regulation and Corporate Innovation

“…27 These comparisons illustrate the positive spillovers (e.g., to other firms in the industry) resulting from mandatory reporting. The results also highlight why it is important to conduct the regulatory analysis at an aggregate level, as otherwise spillovers confound the analysis (Berg et al 2021).…”

“…This redistribution could leave aggregate innovation unchanged or even enhance it if mandatory reporting speeds up the adoption of novel processes and products, or if it generates substantial follow-on innovation by other firms. The potential for such spillovers implies that estimating the direct effect of regulation on regulated firms' innovation is difficult (Glaeser & Guay 2017;Berg et al 2021) and, furthermore, that the aggregate and distributional effects of financial reporting regulation on corporate innovation are far from clear.…”

Uneven Regulation and Economic Reallocation: Evidence from Transparency Regulation

“…In the presence of spillovers, the regulatory effects in these studies comingle the direct impact and the indirect impact of transparency regulation (Glaeser & Guay 2017). By contrast, we explicitly disentangle the two distinct impacts, following recent guidance for handling spillovers in research designs (Berg et al 2021). We find evidence of a negative direct effect and a positive indirect effect.…”

Delays in Banks’ Loan Loss Provisioning and Economic Downturns: Evidence from the U.S. Housing Market

“…In addition, I examine the concern that a reallocation of mortgage lending could occur across banks or even ZIP codes, which can bias estimates from the difference-in-differences approach if control-group units benefit from a negative shock to treated units (Berg, Reisinger and Streitz, [2021]). To mitigate the concern, I investigate whether neighboring ZIP codes' exposure to DLR influences the focal ZIP code's housing outcomes, following Breuer and Breuer [2020].…”