- No-Sign Borrowing (working paper, 2017) [ download at SSRN ]
Borrowers are more likely to default on a mortgage loan they have not signed. For causal identification, I exploit an underwriting rule that allows borrowers to delegate loan signing to a third party via a Power of Attorney (POA) only when unexpected circumstances prevent the borrower from attending the closing in person. Fixed effects for over 570,000 property owners and 23,000 geographic city blocks adjust for individual borrower default propensity and local socioeconomic heterogeneity. I find that POAs substantially increase the likelihood of 90-day mortgage delinquency. Properties purchased by POA are subsequently sold at a lower price than non-POA properties. Contract terms extracted from these mortgages suggest that default is driven by reduced ex post commitment rather than ex ante information.
How Quickly Do Markets Learn? Private Information Dissemination in a Natural Experiment (working paper, 2017) (with Robert J. Jackson, Jr. & Wei Jiang) [ download at SSRN ] Using a unique episode in which the SEC distributed securities disclosures to some investors before the public, we study the impounding of private information into stock prices. Because the delay between the private and public release of the information was random, our setting offers a rare natural experiment for studying how markets process private information. As theory predicts, speculators seem to smooth out the price impact of their trading, and more information is impounded into prices during the expected rather than the actual delay before the information becomes public. Finally, we document investors overreaction when already-stale filings are publicly released.
Joshua Mitts studies corporate and securities law and contract law, with a focus on information disclosure in capital markets, consumer financial protection and related topics in law and finance. Mitts uses empirical methods, including statistical analysis and machine learning, to examine information transmission and contracting practices in financial markets.
His work has been published in the Cornell Law Review, Harvard Business Law Review, Journal of Financial Regulation, Delaware Journal of Corporate Law, and the Yale Journal on Regulation. He has presented his research at the American Law & Economics Association Annual Meeting, Conference on Empirical Legal Studies, and Annual Meeting (2016) of the American Finance Association.
Prior to joining the faculty at the Law School, Mitts was a Fellow at Columbia's Program on Corporate Law & Policy and worked as an associate at Sullivan & Cromwell.
- Securities law
- Corporations and corporate governance
- Contract law
- Consumer protection law
- Law and finance
- Empirical methods in law
- Ph.D. (expected) in Finance & Economics, Columbia Business School
- J.D., Yale Law School, 2013
- B.A. in Liberal Studies, Georgetown University, 2010