In the first chapter, I investigate how external analyst forecasts influence managerial earnings decisions. Using shifts in analyst composition effected by brokerage mergers as a source of exogenous variation, I establish a one-to-one response of firm earnings to analyst forecasts. This response is driven by accounting accruals, consistent with short-termist earnings management. I find that the market perceives these accruals as costly to the firm. I present a model where this behavior emerges as a rational equilibrium, confirmed by a calibration that mirrors a one-to-one forecast-earnings relationship. Calibration outcomes align with real-world earnings and forecast patterns. In the second chapter (co-authored with Harrison Hong and Jeffrey Kubik), we estimate the cost to capital of climate policy. Many US states have set ambitious renewable portfolio standards (RPS) that require utilities to switch from fossil fuels toward renewables. RPS increases the renewables capacity, bond issuance, maturity, and yield spreads of investor-owned utilities compared to municipal producers that are exempted from this climate policy. Contrary to stranded-asset concerns, the hit to overall firm financial health is moderate. Falling cost of renewables and pass through of these costs to consumers mitigate the burden of RPS on firms. Using a Tobin’s 𝒒 model, we show that, absent these mitigating factors, the impact of RPS on firm valuations would have been severe. In the third chapter (co-authored with Lukas Fischer), we identify a source of peer group influence that is plausibly orthogonal to information provision, yet nonetheless affects economic decision-making: the shock to an equity analyst of their undergraduate college football team winning the NCAA Championship Game. We find that analysts’ forecasts respond positively to their undergraduate school’s football team winning the NCAA final. We then show that the shock of ‘winning’ spreads within an analyst’s brokerage, positively influencing the forecasts of their colleagues. Brokerages where the degree of this diffusion is greater have lower female representation in their analyst teams, as well as lower ESG scores.

This dissertation studies three topics related to different types of network effects in financial economics. The first chapter, "Of Coupons and Cargo - International Debt, Production, and Trade," quantifies the relationship between firms' supply chain networks and financing decisions. Most multinational corporations raise a significant amount of debt capital outside their home country. In contrast to prevailing evidence, access to deeper financial markets cannot explain this phenomenon in its entirety, as international debt issues carry higher spreads than securities concurrently issued domestically. Novel data on the universe of fixed income securities, subsidiary locations, and shipment-level trade flows from seventeen countries, is used to understand the drivers of international debt issuance. On the extensive margin firms raise debt in exactly those markets which play a key role in their supply chain (through subsidiaries, suppliers, or customers). Tests on the intensive margin indicate that firms adjust the face value of debt outstanding in a given country following exogenous changes in their operating exposure. These results are consistent with firms using international capital markets to hedge their exposure to fluctuations in exchange rates. The second chapter, "Did You Catch the Game Last Night? - Peer Group Effects in Sell-Side Analyst Forecasts," assesses the reaction of sell-side equity analysts to sentiment shocks, as well as how such non-financial information permeates through social networks. We identify a source of peer group influence that is plausibly orthogonal to information provision, yet nonetheless affects economic decision-making: the shock to an equity analyst of their undergraduate college football team winning the NCAA Championship Game. We find that analysts' forecasts respond positively to their undergraduate school's football team winning the NCAA final. We then show that the shock of 'winning' spreads within an analyst's brokerage, positively influencing the forecasts of their colleagues. Brokerages where the degree of this diffusion is greater have lower female representation in their analyst teams, as well as lower ESG scores. The third chapter, "Sharing is Caring? - Knowledge Diffusion in Researcher Networks," focuses on the effects of social networks in innovation. Social interactions are at the core of many economic processes, including research and development. Yet their contribution to innovation is not well understood. A novel dataset on more than 19,000 economists linked to more than one million unique research projects and fifty million tweets (#EconTwitter) is used as laboratory to explore the relationship between different social interactions and research outcomes. Results suggest that interactions play a dominant role in the idea generation phase of research and a lesser one in the context of ongoing projects. They seem to matter little for completed research projects. More socially active scholars are more productive, as measured by the number of papers written, and their working papers are more visible (i.e., downloaded more frequently). A working paper being endorsed leads to an increase in downloads by 20%. However, indicative of a trade-off in spending their valuable time, these projects are less impactful based on citation measures.