Working Papers

The CEO Beauty Premium


R&R at Strategic Entrepreneurship Journal (with M. G. Colombo, C. Fisch, S. Vismara)

Abstract: How do top executives’ physical attributes impact firm value? Our study combines Upper Echelons Theory (UET) with insights from social psychology and labor economics to investigate how Chief Executive Officers’ (CEOs’) facial attractiveness influences firm valuation by investors in Initial Coin Offerings (ICOs). We document a pronounced CEO beauty premium. The positive relationship between CEO attractiveness and firm valuation is not driven by stereotype-based evaluations; that is, investors do not mistake attractiveness for other latent traits, such as competence, intelligence, likeability, or trustworthiness. Rather, CEO attractiveness seems to bear economic value per se. It helps attract institutional investors and has a sustainable effect on token price performance. Our results are immune to recall and confirmation biases, reverse causality, and unobserved heterogeneity.

Private Investments in Public Equity: Discount for Lack of Marketability and Fair-Value Hypothesis


Work in progress (with A. Bernardo, I. Welch)

Working paper will be posted soon.

Abstract: The pricing of illiquidity (due to lack of marketability) is a contentious issue in Private Investments in Public Equity (PIPEs). We exploit the 2008 amendment to Rule 144(k) to estimate the effect of the shortening of the mandatory holding period on the discount for lack of marketability (DLOM). The annualized inferred DLOM is 3-4%. The DLOM can be larger when marketability is a greater concern. Our paper also contributes to the PIPE performance puzzle (Hertzel et al., 2002). While non-participating investors in PIPE companies incur significant losses post-PIPE, participating investors purchasing stock privately at a discount earn a zero-abnormal return over the expected illiquidity period. Our results support the hypothesis that PIPE investors are able to negotiate discounts commensurate with the expected underperformance of PIPEs companies.