Leveraging three environmental regulatory changes as quasi-natural experiments, and employing difference-in-differences models, we find robust evidence that stringent environmental regulations increase workplace safety violations across all experimental settings. This effect is primarily due to financial constraints and operational adjustments required for compliance, with their interaction further intensifying the effect. The adverse impact is more pronounced when stakeholders heighten their focus on environmental issues and when product market competitiveness is intense. Our findings reveal a significant unintended consequence of climate policies, underscoring a critical trade-off between environmental and social dimensions of ESG.

Ebenezer Effah, Yaxuan Qi, Rengong Zhang

September 2025

This paper examines the effect of trade conflicts on corporate carbon emissions through global supply chains. Exploiting the 2018–2019 U.S.-China tariff hikes as a quasi-natural experiment, we find that U.S. firms subjected to higher import tariffs increased Scope 1 and 2 emissions by 15% and 8%, respectively, compared to minimally affected peers. The effect is amplified for firms reliant on green product imports from China, highlighting supply chain disruptions as a key channel. Financial constraints further exacerbate emissions, as tariff-induced cost pressures reduce green innovation and employment. Cross-sectional tests reveal that firms with weaker climate change ideologies and less diversified supply chains exhibit more pronounced emission increases. Overall, our findings demonstrate that geopolitical trade risks undermine firm-level decarbonization efforts, with implications for policymakers and firms navigating climate goals amid rising protectionism.

Zeyun Bei, Ebenezer Effah, Yaxuan Qi

March 2025

This study provides the first evidence on private firms’ debt specialization. Contrary to existing evidence that firms with higher expected bankruptcy costs, constrained access to capital, and higher information asymmetry specialize in their debt borrowing, we find that private firms adopt more diversified debt portfolios than public firms. We show that private firms’ debt diversification is mainly driven by the need to mitigate lender holdup costs arising from high information asymmetry. We also find that the concentration of equity ownership is negatively related to debt specialization, suggesting private firms have less motivation to use specialized debt as a governance mechanism. Our findings highlight the roles of financial flexibility and reduced monitoring in shaping private firms’ debt structure decisions.

Ebenezer Effah, Yaxuan Qi

August 2025

An optimal debt structure balances the benefits of deterring strategic defaults against the costs of liquidation inefficiencies. This study builds on the role of litigation risk in this cost-benefit trade-off and examines whether threats of lawsuits affect firms’ debt dispersion decisions (i.e., the extent to which firms rely on multiple types of debt simultaneously). Exploiting a matching-based fixed effect difference-in-differences design around two legal events that generate exogenous variations in litigation risk, I find that firms increase debt dispersion upon an increase in litigation risk. Consistent with litigation risk mitigating creditor coordination problems, the effect is stronger for firms facing higher distress risk. Further tests suggest that the mitigation of creditor coordination problems occurs through improved corporate oversight. Beyond debt types, I also demonstrate that litigation risk is associated with firms’ creditor composition as well as debt maturity dispersion. Overall, I document a new channel through which litigation risk affects firm value by advancing our knowledge of an important yet often neglected aspect of debt.

Ebenezer Effah

May 2025

This study examines the economic implications of non-financial information disclosure for firms’ use of informal financing. Using a staggered difference-in-differences design, I find that firms increase their reliance on trade credit following the introduction of ESG disclosure mandates. Consistent with ESG disclosure regulations improving information environment, I document that the effect is stronger in countries with poor pre-regulation information environments, low levels of societal trust, and high levels of ESG awareness. The relation is also more pronounced if the disclosure requirements are implemented by government institutions and on a full compliance basis. Firms with higher liquidity needs benefit more from ESG disclosure mandates. The effect moves down through the supply chain as firms give more trade credit to their customers after ESG disclosure is mandated. Overall, the results suggest that non-financial information plays a critical role in firms’ access to informal financing.

Ebenezer Effah

September 2025

Ebenezer Effah

Ebenezer Effah, Yaxuan Qi

Ebenezer Effah, Xiaoli Hu, Yaxuan Qi, Rengong Zhang

Ebenezer Effah

Ebenezer Effah