Torin McFarland
I am a Ph.D. Candidate in Finance at Drexel University's LeBow College of Business, and I am on the 2024-2025 job market.
My research examines the intersection of government and empirical corporate finance, specifically in the areas of innovation, labor, and corporate governance. I teach Stata, SAS, and programming essentials to doctoral students, as well as introductory finance topics to undergrads.
I use R for machine learning and natural language processing (structural topic modeling, LDA).
I received the Southern Finance Association Outstanding Doctoral Student Paper Award (2024), as well as the John J. Clark Award for Outstanding Research in Economics (2024).
Email: torinmcfarland@gmail.com or tmm462@drexel.edu
Working Papers
(Job Market Paper)
Invited for Dual Submission to the Review of Financial Studies
- Dr. John J. Clark Outstanding Economics Research Paper Award, LeBow College of Business, 2024.
- Outstanding Doctoral Student Paper, Southern Finance Association, 2024.
Abstract: I study how regulatory burden disrupts the careers of productive inventors. Using structural topic modeling, I link the text of paperwork regulations to the text of patents, and develop a time-varying inventor-specific measure of regulatory burden. These estimates increase during expansionary regulatory regimes and are significantly higher in heavily scrutinized industries. In a sample of 1.4 million inventors, I show that inventors facing high burden exhibit decreased productivity and lower quality innovations. These results are concentrated in Star Inventors. A 1 standard deviation increase in time spent on compliance decreases Star patenting by 13.9% (14,900 patents annually in aggregate) and decreases citations accrued by 2.8%. Citation and text-based measures of characterization suggest completed innovations are narrower and less impactful, meaning that inventors pursue more incremental projects. All results are identified within inventor over time, net of employer-city trends, ruling out alternative explanations like time-varying employer innovation strategy or location-specific innovation factors. In terms of labor market outcomes, I find evidence consistent with a disutility channel: after experiencing increases in burden, inventors are more likely to switch jobs, and to seek positions at larger employers. Overall, the findings document the innovation consequences of regulatory burden, influencing both the quantity and quality of patented inventions, and the mobility of inventors.
Presentations: Southern Finance Association 2024, Financial Management Association 2024, Financial Management Association European Conference 2024, American Law & Economics Association 2024 (Roundtable), Eastern Finance Association 2024, American Finance Association 2024 (PhD Poster Session), Financial Management Association 2023 (Special PhD Paper Presentation and Doctoral Consortium), Federal Reserve Bank of Philadelphia 2023, Financial Management Association European Conference 2023 (Doctoral Consortium), IFPHD Seminar 2024
Escaping Non-Compete Agreements
with Jason (Pang-Li) Chen and Melissa Crumling
Abstract: This paper studies the spillover effects of increasing the enforceability of non-compete agreements at the state level. We find that inventors respond to strengthening of NCs by leaving their current state. Further, we find that search costs for out-of-state positions, measured by high social ties with out-of-state employers, and demand for innovators' skill sets, as proxied by whether the inventor is working in rapidly emerging technology classes, drive the decision to migrate to other states. Motivated by these mechanisms, we show that these out-of-state regions experience significant benefits, namely increases in inventor population, innovation output, and new firm creation.
Presentations: Southern Finance Association 2024*, American Law & Economics Association 2024 (Roundtable)*, Eastern Finance Association 2024*, Columbia PE Conference PhD Workshop 2024*, IMFB Conference 2024*, Financial Management Association 2023*, WEFI Fellows Workshop 2023*, Drexel University Brownbag 2023
How Does Financial Reporting Affect the Market for Corporate Control?
with Eliezer Fich and Paolo Volpin
Abstract: US listed firms with reduced financial reporting (“non-accelerated filers” and “smaller reporting companies”) are 20% less likely to become takeover targets, compared with other firms. This result holds across several empirical specifications, including regression discontinuity analyses (around the public float cutoff to qualify for reduced reporting) and difference-in-differences tests (using the 2007 regulatory change that introduced the “smaller reporting companies” classification). Reduced-reporting firms are sold for less cash but receive higher premiums than other targets. We find no evidence (using both stock market and accounting performance metrics) that their acquirers are worse off than other acquirers. Consistent with the rationale that financial reporting alleviates asymmetric information, reduced-reporting firms are targeted later in merger waves relative to their industry peers and subject to a permanent stock price revaluation when M&A deals fail.
Presentations: Bayes MARC Conference 2024*, University of Delaware 2024*
Scheduled: Bretton Woods Accounting and Finance Ski Conference 2025
Nota Bene: * indicates presentation by co-author