Andres Donangelo


  1. Labor Mobility: Implications for Asset Pricing, [Internet Appendix], [data]

          Journal of Finance, June 2014, 68(3), 1321-1346.
          Winner of the Trefftzs Award for the Best Student Paper, WFA 2011

    1. Abstract: Labor mobility is the flexibility of workers to walk away from an industry in response to better opportunities. I develop a model in which labor flows make bad times worse for shareholders who are left with capital that is less productive. The model shows that firms face greater operating leverage by providing flexibility to mobile workers. I construct an empirical measure of labor mobility consistent with the model and document an economically significant cross-sectional relation between mobility, operating leverage, and stock returns. I find that firms in mobile industries earn returns over 5% higher than those in less mobile industries.

    Product Market Competition and Industry Returns (2014), (with M. Cecilia Bustamante), [Internet Appendix],

          revise and resubmit at Review of Financial Studies

    1. Abstract: This paper shows that product market competition has two opposing effects on asset returns. The first relates to the procyclical nature of the value destruction from expansion of competitors, which lowers exposure to systematic risk in more competitive industries. The second is related to the narrower profit margins due to competition, which increase exposure to systematic risk. We find that the first effect dominates the second, so that firms in more competitive industries generally earn lower asset returns. Our results are robust to using five alternative measures of competition and to controlling for the sample selection bias of publicly-listed firms.

    Aggregate Asset-Pricing Implications of Human Capital Mobility in General Equilibrium (2011), (with Esther Eiling and Miguel Palacios)

    1. Abstract: We present a model in which aggregate mobility of labor affects risk and expected equity returns. Our setup is based on a multi-industry dynamic economy with production. We consider two different types of human capital. Generalist human capital can move between industries, while specialized human capital and physical capital cannot. The greater relative mobility of human capital relative to physical capital affects how aggregate risk in the economy is split between these two components of total wealth. We show that aggregate consumption and wealth increase when human capital is more mobile. However, at the same time, aggregate risk and the equity risk premium also increase under human capital mobility.

Assistant Professor of Finance

McCombs School of Business, U.T. Austin

Research Interests

Asset Pricing, Human Capital, Real Options


Contact Information

McCombs School of Business

University of Texas at Austin

1 University Station; B6600

Austin, TX 78712