We study the effect of treatment on an outcome when parallel trends hold conditional on an interactive fixed effects structure. In contrast to the majority of the literature, we propose identification using time-varying covariates. We assume the untreated outcomes and covariates follow a common...

This paper studies how to incorporate observable factors in difference-in-differences and document their empirical relevance. We show that even under random assignment directly adding factors with unit-specific loadings into the difference-in-differences estimation results in biased estimates....

With rising political debates about the role of environmental, social, and corporate governance (ESG), companies must rethink their prioritization of different stakeholder groups. We thus examine how management represents stakeholder satisfaction and interdependencies. To this end, we extract...

This paper is written by Hongyi Chen (Hong Kong Institute for Monetary and Financial Research) and Pierre Siklos (Wilfrid Laurier University and Balsillie school of International Affairs).Digitalization, spurred by the pandemic, has accelerated plans by many central banks to introduce retail...

Relying on theories in which bank loans create deposits—a process we call “funding liquidity creation”—we measure how much funding liquidity the U.S. banking system creates. Private money creation by banks enables lending to not be constrained by the supply of cash deposits. During the...

Testing for causation—defined as the preceding impact of the past value(s) of one variable on the current value of another when all other pertinent information is accounted for—is increasingly utilized in empirical research using the time-series data in different scientific disciplines. A...