Torin McFarland

Regulating Inventors

- 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 and the text of paperwork regulations, I develop a time-varying inventor-specific measure of regulatory burden.  I show that inventors facing high burden exhibit decreased productivity and lower quality innovations.  A 1 standard deviation increase in time spent on compliance decreases patenting by 5.4%, citations accrued by 5.1%, and novel terms introduced by 3.1%.  In labor markets, I find evidence consistent with a disutility channel:  after experiencing increases in burden, inventors are more likely to change jobs and seek lower burden technology areas.

Presentations:  Financial Intermediation Research Society Annual Meeting 2025, Georgetown University Spring 2025 Labor and Finance Group Conference, 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, University of Mississippi (Ole Miss) 2025, University of Massachusetts Amherst 2025, University of Denver 2024, Marquette University 2024, Florida Atlantic University 2024, San Diego State University 2024

Beyond Local Labor Markets: Social Connections and Inventor Mobility 

with Jason (Pang-Li) Chen and Melissa Crumling

Abstract:  We examine how social connections relate to inventor mobility and innovation when local employment opportunities become more restrictive. We exploit state-level increases in non-compete enforceability as shocks to inventors' incentives to seek employment outside local labor markets. Interstate mobility increases more among inventors with greater non-compete exposure, with the differential response concentrated in socially connected destinations. This pattern persists after accounting for distance, destination enforcement, technological and industry similarity, and co-inventor ties. Movers to more socially connected destinations find closer technological matches with employers and exhibit larger post-move increases in innovative output. This increase in output is weaker among inventors who previously lived in the destination county and stronger among those joining employers without patenting histories, consistent with social connections helping inventors identify and evaluate employment opportunities. Following the reforms, destination counties with high social proximity to affected inventors experience relative increases of 8.7% in inventor population, 13.3% in patents, and 14.3% in citation-weighted patents, alongside greater entrepreneurial activity. These findings are consistent with social connections easing search frictions across local labor markets and shaping the geographic distribution of innovation.

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

Limited Financial Reporting as a Takeover Barrier

with Eliezer Fich and Paolo Volpin

Abstract:  US-listed firms with reduced financial reporting are 14\% less likely to become takeover targets than other firms. This finding is robust to propensity score matching, regression discontinuity (around the threshold for reduced reporting eligibility), and difference-in-differences analysis (leveraging the introduction of the smaller-reporting-companies category). Asymmetric information is the likely explanation: reduced-reporting firms exhibit wider bid-ask spreads; when acquired, they receive higher premia but less cash than other targets; and their positive revaluation persists even when the acquisition fails. Consistent with limited disclosure being a takeover barrier, firms without other takeover defenses are more likely to qualify for reduced financial reporting.

Presentations:  Eastern Finance Association Annual Meeting 2025, Bretton Woods Accounting and Finance Ski Conference 2025*, Bayes MARC Conference 2024*, Bocconi University 2025*, Rutgers University 2025*, University of Miami 2025*, University of Richmond 2025*, University of Delaware 2024*

Nota Bene:  * indicates presentation by co-author