Manju Puri

Duke University | DU

Based on a survey of AFA members, we analyze how demographics, time allocation, production mechanisms, and institutional factors affect research production during the pandemic. Consistent with the literature, research productivity falls more for women and faculty with young children. Independently, and novel, extra time spent teaching (much more li...

We analyze the information content of a digital footprint—that is, information that users leave online simply by accessing or registering on a Web site—for predicting consumer default. We show that even simple, easily accessible variables from a digital footprint match the information content of credit bureau scores. A digital footprint complements...

Manipulation of hard information has been at the center of a wave of investigations into fraudulent bank behavior, such as mis-selling of mortgages and rigging of London Interbank Offered Rate and Foreign Exchange rates. Despite these prominent cases, little is known as to why employees manipulate hard information. Using almost a quarter million re...

This paper analyzes the substantially growing markets for crowdfunding, in which retail investors lend to borrowers without financial intermediaries. Critics suggest that these markets allow sophisticated investors to take advantage of unsophisticated investors. The growth and viability of these markets critically depend on the underlying incentive...

Using a unique dataset of more than 1 million loans made by 296 German banks, we evaluate the impact of many aspects of customer-bank relationships on loan default rates. Our research suggests a practical solution to reducing loan defaults for new customers: Have the customer open a simple transactions account - savings or checking account. Observe...

We provide new evidence that the subjective “look of competence” rather than beauty is important for CEO selection and compensation. Our experiments, studying the facial traits of CEOs using nearly 2,000 subjects, link facial characteristics to both CEO compensation and performance. In one experiment, we use pairs of photographs and find that subje...

We examine heterogeneity in depositor responses to solvency risk using depositor-level data for a bank that faced two different runs. We find that depositors with loans and bank staff are less likely to run than others during a low-solvency-risk shock, but are more likely to run during a high-solvency-risk shock. Uninsured depositors are also sensi...

We analyze how increased access to financing affects firm total factor productivity (TFP) by exploiting a natural experiment following interstate banking deregulations that increased access to bank financing. We find that firms' TFP increases after their states implement these deregulations. Using a regression discontinuity approach based on the Sm...

Using depositor-level data, we examine whether depositor actions reflect solvency risk for a bank that faced runs. We find that depositors with loans and bank staff are less likely than others to run in a low solvency-risk shock, but relatively more likely to in a high solvency-risk shock. Uninsured depositors always run more and this difference gr...

This paper analyzes the substantially growing markets for crowdfunding, in which retail investors lend to borrowers without financial intermediaries. Critics suggest that these markets allow sophisticated investors to take advantage of unsophisticated investors. The growth and viability of these markets critically depend on the underlying incentive...

How are decision-making authority and investment dollars delegated within firms? We study these issues using a quantitative measure of delegation derived by directly asking top executives how high-level decisions are made within their firms. Our survey of more than 1,000 Chief Executive Officers and Chief Financial Officers allows us to investigate...

We use unique micro-level depositor data for a bank that faced a run due to a shock to its solvency to study whether depositors monitor banks. Specifically, we examine depositor withdrawal patterns in response to a timeline of private and public signals of the bank’s financial health. In response to a public announcement of the bank’s financial tro...

Poor loan quality is often attributed to loan officers exercising poor judgment. A potential solution is to base loans on hard information alone. However, we find other consequences of bypassing discretion stemming from loan officer incentives and limits of hard information verifiability. Using unique data where loans are based on hard information,...

We analyze how increased access to …financing affects firm total factor productivity (TFP) by exploiting a natural experiment following interstate banking deregulations which increased access to bank …financing. We find that firms’ TFP increases after their states implement these deregulations. Using a regression discontinuity approach based on Sma...

We use data over 25 years to understand the life cycle dynamics of VC‐ and non‐VC‐financed firms. We find successful and failed VC‐financed firms achieve larger scale but are not more profitable at exit than matched non‐VC‐financed firms. Cumulative failure rates of VC‐financed firms are lower, with the difference driven largely by lower failure ra...

We use unique depositor-level data for a bank that faced a run to understand the factors that affect depositor behavior. We find uninsured depositors are most likely to run. Deposit insurance helps, but is only partially effective. Bank-depositor relationships mitigate runs, suggesting that relationship with depositors help banks reduce fragility....

We administer psychometric tests to senior executives to obtain evidence on their underlying psychological traits and attitudes. We find U.S. CEOs differ significantly from non-U.S. CEOs in terms of their underlying attitudes. In addition, we find that CEOs are significantly more optimistic and risk-tolerant than the lay population. We provide evid...

We use unique, depositor-level data for a bank that faced a run and was placed in receivership to study whether depositors monitor banks. Depositors with uninsured balances, depositors with loan linkages and staff of the bank are far more likely to withdraw in response to the shock. We are able to contrast depositor behavior to this fundamental sho...

This paper analyzes the importance of retail consumers’ banking relationships for loan defaults using a unique, comprehensive dataset of over one million loans by savings banks in Germany. We find that loans of retail customers, who have a relationship with their savings bank prior to applying for a loan, default significantly less than customers w...

This survey reviews the growing body of academic work on venture capital. It lays out the major data sources used. It examines the work on venture capital investments in companies, looking at issues of selection, contracting, post-investment services and exits. The survey considers recent work on organizational structures of venture capital firms,...

This paper analyzes the importance of discretion in bank lending decisions. We use a unique dataset of more than 1 million loan applications to customers of German savings banks and can observe accept and reject decisions as well as loan performance. We document that discretion is widespread and economically significant, in particular for customers...

We conduct beauty contest experiments, using close to 2,000 subjects to study the facial traits of CEOs. In one experiment we use pairs of photographs and find that subjects rate CEO faces as appearing more “competent” and less “likable” than non-CEO faces. Another experiment matches CEOs from large firms against CEOs from smaller firms and finds l...

This paper analyzes the certification mechanisms and incentives that enable an online social lending market to match demand and supply despite the absence of financial intermediaries and personal contacts. Our analysis shows that the creation of self-organized groups helps this online market to work efficiently but allowing group leaders rewards, s...

We survey more than 1,000 CEOs and CFOs to understand how capital is allocated, and decision-making authority is delegated, within firms. We find that CEOs are least likely to share or delegate decision-making authority in mergers and acquisitions, relative to delegation of capital structure, payout, investment, and capital allocation decisions. We...

This paper analyzes the importance of bank relationships on default risk in consumer lending using a unique, comprehensive, dataset of over one million loans by German savings banks. We find that retail customers with bank-depositor relationships prior to applying for a loan default significantly less than customers without prior relationships, eve...

This paper examines the broader effects of the US financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany using a unique data set of German savings banks during the period 2006 through 2008 for which we have the universe of loan applications and loans granted. Our experimental setting allows u...

This paper examines the broader effects of the US financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany using a unique data set of German savings banks during the period 2006 through 2008 for which we have the universe of loan applications and loans granted. Our experimental setting allows u...

This paper examines the effects of the U.S. financial crisis on global lending to retail customers. In particular we examine retail bank lending in Germany taking advantage of a unique dataset of German savings banks over the period 2006-2008 for which we have the universe of loan applications and loans granted in this time period. Our experimental...

This paper examines the secondary market for loan sales and, in particular, loan contract design as a mechanism to resolve informational issues in loan sales and associated costs and benefits. Using loan-level data, we find that sold loans contain additional covenants and more restrictive net worth covenants, particularly when agency and informatio...

The paper studies how the attitudes of entrepreneurs, in general, and family business owners, in particular, differ from others in the economy. Family business owners are entrepreneurs who operate a business with their spouse or adult children. We use data from the Survey of Consumer Finance to measure and isolate the enjoyment of private benefits,...

We use U.S. Census data over twenty-five years to understand the lifecycle dynamics of VC- and non-VC-financed firms. We find both successful and failed VC-financed firms achieve larger scale but are not more profitable at exit than matched non-VCfinanced firms. Cumulative failure rates of VC-financed firms are lower, with the difference being driv...

We use proprietary data to analyze the importance of retail banking relationships to commercial banks and their depositors when banks underwrite securities. We find lead underwriters’ retail customers benefit as they demand and end up with significantly more of the highly underpriced issues. We find it is actual underpricing beyond that predicted b...

This paper examines bank behavior in venture capital. It considers the relation between a bank's venture capital investments and its subsequent lending, which can be thought of as intertemporal cross-selling. Theory suggests that unlike independent venture capital firms, banks may be strategic investors who seek complementarities between venture ca...

We use a unique, new, database to examine micro depositor level data for a bank that faced a run. We use minute-by-minute depositor withdrawal data to understand the role of social networks, the effectiveness of deposit insurance, the role of relationships and other factors in influencing depositor propensity to run. We employ methods from the epid...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effect...

Banks are an important source of funding in economies all around the world, making it vital to understand how banks directly and indirectly affect funding through capital markets. Few regulatory issues have been as controversial as the appropriate scope of bank activities. This chapter reviews the arguments and theoretical models that consider the...

We create a novel measure of optimism using the Survey of Consumer Finance by comparing self-reported life expectancy to that implied by statistical tables. This measure of optimism correlates with positive beliefs about future economic conditions and with psychometric tests of optimism. Optimism is related to numerous work/life choices: more optim...

This paper examines the secondary market for loan sales and, in particular, loan contract design as a mechanism to resolve informational issues in loan sales and associated costs and benefits. Using loan-level data, we find that sold loans contain additional covenants and more restrictive net worth covenants, particularly when agency and informatio...

We use proprietary data to analyze the importance of retail banking relationships to commercial banks and their depositors when banks underwrite securities. We find lead underwriters' retail customers benefit as they demand and end up with significantly more of the highly underpriced issues. We find it is actual underpricing beyond that predicted b...

This paper presents micro level evidence on the importance of individual characteristics of depositors in a bank panic. We use a unique data set that provides exhaustive details on individual depositor characteristics in conjunction with a bank run to study the factors that affect depositor panic. Firstly we find that depositors with longer duratio...

There is a burgeoning literature on IPO allocations to institutions with retail clientele typically being treated as a monolithic entity. However, there is potential for differential treatment of different groups of retail investors because of the underlying relationship with the underwriter. We use a unique proprietary dataset from Germany to anal...

Banks are an important source of funding in economies all around the world, making it vital to understand how banks directly and indirectly affect funding through capital markets. Few issues have perhaps been as controversial as the appropriate scope of bank activities and whether banks should participate directly in capital market activities, prov...

We present new evidence from a natural experiment to show circumstances in which ownership restrictions can enhance value. Our evidence is based on multiple restricted bond issues by an emerging market issuer at 150 basis points lower than comparable bonds, resulting in a billion dollars saving. This is intriguing: how can an emerging market issuer...

This paper examines whether there are efficiencies that benefit issuers and underwriters when a financial intermediary concurrently lends to an issuer while also underwriting its public securities offering. We find issuers, particularly noninvestment-grade issuers for whom informational economies of scope are likely to be large, benefit through low...

Although evidence suggests that institutional investors play a role in monitoring management,not all institutions are equally willing or able to serve this function. We present a stylized model that examines the effects of institutional monitoring on executive compensation. The model predicts that institutions’ influence on managers’ pay-for-perfor...

This paper analyzes how universal banks treat different groups of retail investors in new equity issues. Do banks take advantage of their retail investors to sell "lemons" or do their retail investors benefit from getting more of the "hot" issues? We provide evidence from a proprietary dataset to show that lead underwriter's retail customers demand...

This paper presents some of the first large-scale survey evidence linking optimism to major economic choices. We create a novel measure of optimism using the Survey of Consumer Finance by comparing a person's self-reported life expectancy to that implied by statistical tables. Optimists are more likely to believe that future economic conditions wil...

This paper analyzes how universal banks treat different groups of retail investors in new equity issues. Do banks take advantage of their retail investors to sell "lemons" or do their retail investors benefit from getting more of the "hot" issues? We provide evidence from a proprietary dataset to show that lead underwriter's retail customers demand...

The importance of an investor's organizational structure is increasingly recognized in modern finance. This paper examines the role of banks in the US venture capital market. Theory suggests that unlike independent venture capital firms, banks can seek complementarities between their venture capital and lending activities. Our empirical analysis su...

This article examines the practice of “tying,” which occurs when an underwriter lends to an issuer around the time of a public securities offering. We examine whether there are efficiencies from tying lending and underwriting which lead to benefits for issuers and underwriters. We find evidence consistent with tying occurring for issues when there...

The paper focuses on satisfaction with income and proposes a utility model built on two value systems, the `Ego' system - described as one own income assessment relatively to one own past and future income - and the `Alter' system - described as one own income assessment relatively to a reference group. We show how the union of these two value syst...

This article studies how collateral affects bond yields. Using a large data set of public bonds, we document that collateralized debt has higher yield than general debt, after controlling for credit rating. Our model of agency problems between managers and claim holders explains this puzzling result by recognizing imperfections in the rating proces...

Using a sample of 495 project finance loan tranches (worth $151 billion) to borrowers in 61 different countries, we examine the relation between legal risk and debt ownership structure. The tranches exhibit high absolute levels of debt ownership concentration: the largest single bank holds 20.3% while the top five banks collectively hold 61.2% of a...

This article examines the information content of the sale announcement of a borrower's loans by its lending bank. We find significant negative stock returns for the borrower on the loan sale announcement, particularly for subpar loan sales, where the bank's information advantage is greatest. Further, a large proportion of these borrowers file for b...

Debtor-in-Possession (DIP) financing is a unique form of enhanced secured financing that is granted to firms filing for reorganization under Chapter 11 of the US Bankruptcy Code. Opponents of DIP financing argue that such financing can lead to overinvestment, i.e., excessive investment in risky, (even negative NPV) projects. Alternatively, DIP fina...

The Riemann hypothesis has endured for more than a century as a widely believed conjecture. There are many reasons why it has endured, and captured the imagination of mathematicians worldwide. In this chapter we will explore the most direct form of evidence for the Riemann hypothesis: empirical evidence. Arguments for the Riemann hypothesis often i...

We analyze institutional allocation in initial public offerings (IPOs) using a new dataset of US offerings between 1997 and 1998. We document a positive relation between institutional allocation and day 1 IPO returns: for instance, institutions get under 60% of overpriced issues but about 75% of underpriced issues. The positive relation is partly e...

This paper examines the impact venture capital can have on the development of new firms. Using a hand-collected data set on Silicon Valley start-ups, we find that venture capital is related to a variety of professionalization measures, such as human resource policies, the adoption of stock option plans, and the hiring of a marketing VP. Venture-cap...

We analyze institutional allocation in initial public offerings (IPOs) using a new data set of U.S. offerings between 1997 and 1998. We document a positive relationship between institutional allocation and day one IPO returns. This is partly explained by the practice of giving institutions more shares in IPOs with strong premarket demand, consisten...

This paper studies how collateral affects bond yields. Using a large dataset of public bonds, we document that collateralized debt has higher yield than general debt, after controlling for credit rating. Our model of agency problems between managers and claimholders explains this puzzling result by recognizing imperfections in the rating process. W...

The venture capital industry experienced its biggest decline ever in 2001. The National Venture Capital Association reports that, in the fourth quarter of 2001, investments by venture capital firms were at approximately a third of the level the year before and the amount of money raised by these firms had dropped 80 percent. Many people question wh...

This paper examines empirical evidence on the impact that venture capitalists have on the development path of new firms. We use a hand-collected data set on Silicon Valley start-up companies that allows us to "look inside the black box" and analyze the influence of venture capital on the professionalization of firms' internal organization. The evid...

Debtor-in-Possession (DIP) financing is a unique form of financing that is allowed to firms filing under Chapter 11 of the US Bankruptcy Code. The legal provisions confer enhanced seniority on this financing. It is argued that such financing leads to excessive investment in risky, (even negative NPV) projects. Defenders of DIP financing, on the oth...

Venture capital financing is widely believed to be influential for new innovative companies. We provide empirical evidence that venture capital financing is related to product market strategies and outcomes of start-ups. Using a unique hand-collected database of Silicon Valley high-tech start-ups we find that innovator firms are more likely to obta...

Commercial bank entry into securities underwriting can affect underwriter behavior because, unlike investment houses, banks also lend to firms. This raises several issues. Are banks better certifiers of firms’ securities than investment houses? If banks hold equity in firms rather than debt, does this make certification more credible? Would one typ...

I assess the role of wealth and systemic risk in explaining future asset returns. I show that the residuals of the trend relationship among asset wealth and human wealth predict both stock returns and government bond yields. Using data for a set of industrialized countries, I find that when the wealth-to-income ratio falls, investors demand a highe...

While it is extensively documented that underwriters often "stabilize" or "support" initial public offerings (IPOs), less is known about how this practice impacts the IPO process. We argue that price support creates a short put position for underwriters, and thereby gives underwriters the incentive to reduce the ex-ante price risk of IPOs. We provi...

When commercial banks make loans to firms and also underwrite securities, does this hamper or enhance their role as certifiers of firm value? This paper examines empirically the pricing of bank-underwritten securities as compared to investment-house-underwritten securities over a unique period in the U.S. (pre-Glass-Steagall) when both banks and in...

This paper examines recent evidence on the characteristics and pricing of debt securities underwritten by Section 20 subsidiaries of U.S. commercial bank holding companies relative to those underwritten by investment houses. Our results show that Section 20 underwritings of lower-credit rated firms in which the bank has a lending stake, results in...

The paper models securities underwriting where the intermediaries (commercial banks and investment houses) have diverse conflicts of interest leading to differential pricing of securities. When underwriting securities, investment houses have an incentive to underinvest in costly information production. Banks obtain such information from loan monito...

The Glass-Steagall Act of 1933 barred commercial banks and their affiliates from underwriting and dealing in securities activities, amidst concerns that banks abused the trust of their depositors and clientele by systematically underwriting poor quality security issues. This paper examines if these concerns were justified by studying the long-term...

This paper empirically investigates how the intensity of product market com-petition impacts the …rms' …nancing costs. Using a large sample of loans to publicly traded US manufacturing …rms, I …nd evidence that an intensi…cation of product market competition among …rms signi…cantly increases the cost of bank loans. Further investigations reveal tha...

This paper analyzes the importance of retail consumers' banking relationships for loan defaults using a unique, comprehensive dataset of over one million loans. We find that loans of retail customers, who have a relationship with their savings bank prior to applying for a loan, default significantly less than customers with no prior relationship. W...

This paper uses the Survey of Consumer Finance to study how the attitudes of en-trepreneurs differ from others in the economy. By using a measure of optimism based on life expectancy miscalibration we can separately identify optimism from risk-taking and non-pecuniary benefits. Entrepreneurs are more optimistic, more risk loving and choose to work...

This paper presents some of the first large scale ev-idence linking optimism to significant work/life choices and en-trepreneurship. We create a novel measure of optimism based on life expectancy biases using the Survey of Consumer Finance. We find that entreprenueurs are more optimistic than non-entrepreneurs. Moreever, more optimistic people in g...

Typescript. Thesis (Ph.D.)--New York University, Leonard N. Stern School of Business, 1995. Includes bibliographical references (leaves: 101-107)