Tianjiao (Joy) Tong

• Tong, J. T., 2024, "Health Care Costs and Corporate Investment", Review of Financial Studies, April 37(4): 1078 - 1117.
  Abstract: Health care costs for U.S. employers have tripled over the past 20 years. Using firm-specific health expense data, I show that firms negatively adjust capital expenditures and R&D expenses in response to increases in health care costs. The effects are more pronounced for firms that are financially constrained, employ more high-skilled workers, and have less bargaining power relative to insurers. Furthermore, policy uncertainty surrounding health care costs is substantial and discourages capital investment. These findings suggest that an elevated level of health care costs and the associated uncertainty limit a firm's ability to expand physically or through innovation.

  Link(s) to publication:

  https://academic.oup.com/rfs/advance-article/doi/10.1093/rfs/hhad088/7451854?utm_source=advanceaccess&utm_campaign=rfs&utm_medium=email

  http://dx.doi.org/10.1093/rfs/hhad088

• Ma, S.; Tong, J. T.; Wang, W., 2022, "Bankrupt Innovative Firms", Management Science, September 68(9): 6971 - 6992.
  Abstract: We study how innovative firms manage their innovation portfolios after filing for Chapter 11 reorganization using three decades of data. We find that they sell off core (i.e., technologically critical and valuable), rather than peripheral, patents in bankruptcy. The selling pattern is driven almost entirely by firms with greater use of secured debt, and the mechanism is secured creditors exercising their control rights on collateralized patents. Creditor-driven patent sales in bankruptcy have implications for technology diffusion—the sold patents diffuse more slowly under new ownership and are more likely to be purchased by patent trolls. This paper was accepted by Gustavo Manso, finance.

  Link(s) to publication:

  http://dx.doi.org/10.1287/mnsc.2021.4141

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