Elena S. Pikulina
Assistant Professor
Finance Division
Sauder School of Business
University of British Columbia
Email: elena (dot) pikulina (at) sauder.ubc.ca
Phone: +1 604 822 3314
2053 Main Mall, HA864
Vancouver BC
V6T 1Z2 Canada
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Working Papers
We present a model of promotions where vacancies, wages, and internal career paths are endogenously determined in a labor market equilibrium. Workers differ only by a non-productive label: "blue" or "red." Firms are biased towards blue workers in promotions. In equilibrium, two types of firms emerge: (i) "Mixed firms" hire both types of workers, offer risky career paths (where promotion is not guaranteed), are large, and pay high wages; (ii) "Red firms" hire only red workers, offer safe careers with seniority-based promotions, are small, and pay low wages. A large bias against red workers is socially inefficient and harms both worker types. Although firms individually prefer to be unbiased, paradoxically, they collectively benefit from the bias, as equilibrium profits increase with the bias. Our model provides numerous testable predictions, which can guide future empirical work on promotions, discrimination, and inequality.
Wharton School - WRDS Award For the Best Empirical Finance Paper, 2023 WFA (San Francisco, USA)
Presented at: The Sydney Banking and Financial Stability Conference; The USC Social and Behavioral Finance Conference; 2023 WFA Meetings; 2023 Eastern Finance Association Meetings; 2023 AFFECT Workshop
We document that over the last two decades, differences in political preferences between U.S. counties have increasingly shaped the equity portfolio composition of wealthy households. This rising partisan portfolio disagreement reflects the growing number of partisan stocks across various industries, particularly among large-cap stocks. The trend appears to be driven more by a widening gap in politically shaped values and an increasingly adverse attitude towards the opposing party, than by differences in politically shaped economic expectations. Our study suggests that the growing political divide can lead to segmentation of U.S. equity markets along political and geographic lines.
Recent literature points to individuals having preferences for autonomy, which has two dimensions. The first is an individual's ability to influence their own outcomes. The second is enjoying a certain degree of non-interference from others. In this paper, we focus on the non-interference in pay. We show that most subjects are unwilling to pay to reduce interference from others when this reduction has no instrumental value. That is, they do not have intrinsic preferences for non-interference. However, those who do show such preferences are willing to sacrifice a meaningful part of their pay to reduce non-interference.
Subtle discrimination, with Daniel Ferreira. Forthcoming at the Journal of Finance.
Best Paper Award at the CSEF-RCFS Finance, Labor and Inequality Conference (Capri, Italy)
Presented at: Vienna Festival of Finance Theory, 2023 NBER SI, Personnel Economics; 2023 CSEF-RCFS Finance, Labor and Inequality Conference; Adam Smith Workshop Spring 2023; NBER Corporate Finance Meetings, Spring 2023; 2023 FMA Napa/Sonoma Finance Conference; ESCP Workshop on ESG; 2023 AFA Meetings
We introduce the concept of subtle discrimination—biased acts that cannot be objectively ascertained as discriminatory—and study its implications in a model of competitive promotions. We show that subtle (as opposed to overt) discrimination has unique implications. Discriminated candidates perform better in low-stakes careers, while favored candidates perform better in high-stakes careers. In equilibrium, firms are polarized: high-productivity firms become “progressive” and have diverse management teams, while low-productivity firms choose to be “conservative” and homogeneous at the top. Subtle discrimination also has unique empirical predictions in contexts such as equity analysis, lending, fund flows, banking careers, and entrepreneurial finance.
Work in Progress
Who you know still matters: Women on boards and firm value, with Renee B. Adams, Daniel Ferreira, and Benjamin Posmanick.
The cost of financial advice, with Yihui Pan, Stephan Siegel, and Tracy Wang.
Developer competition and housing affordability, with Jack Favilukis and Tianping Wu.
Are mandates for affordable housing effective?, with Jack Favilukis and Khalil Esmkhani.
Corporate culture and investment in human capital, with Daniel Ferreira and Isaac Hacamo.
Publications
Pan, Yuhui, Elena S. Pikulina, Stephan Siegel and Tracy Yue Wang. Do equity markets care about income inequality? Evidence from pay ratio disclosure. The Journal of Finance 77 (2022): 1371-1411. BibTeX
Pikulina, Elena and Chloe Tergiman. Preferences for power. Journal of Public Economics 185 (2020): 104-173. BibTeX
Pikulina, Elena, Luc Renneboog, and Philippe N. Tobler. Do confident individuals generally work harder? Journal of Multinational Financial Management 44 (2018): 51-60.
Pikulina, Elena, Luc Renneboog, and Philippe N. Tobler. Overconfidence and Investment: An Experimental Approach. Journal of Corporate Finance 43 (2017): 175-192. Experimental instructions.
Pikulina, Elena, and Luc Renneboog. 14. Serial takeovers, large shareholders, and CEOs' equity-based compensation. Research Handbook on Shareholder Power (2015): 297.
Pikulina, Elena, Luc Renneboog, Jenke Ter Horst, and Philippe N. Tobler. Bonus schemes and trading activity. Journal of Corporate Finance 29 (2014): 369-389.
Drobyshevsky, Sergey, Sergey Narkevich, Elena Pikulina, and Dmitry Polevoy. Analysis of a possible bubble on the Russian real estate market. Gaidar Institute for Economic Policy Research Paper Series 128 (2009).
Data
Download the pay ratio data from my JF paper with Yihui Pan, Stephan Siegel, and Tracy Wang.
Mount Thompson summit view to the east, Canadian Rockies