Faculty & Research

John Barrios

John Barrios

Assistant Professor of Accounting

John M. Barrios’ general research interests focus on the intersection of labor economics and financial and managerial accounting. Specifically, his research has examined the areas of human capital, financial reporting, regulation, managerial incentives, and corporate governance. In addition to his research he has experience as an economic analyst for a political strategist.

Barrios earned his Ph.D. in Accounting from the University of Miami. During his time in the Ph.D. program, he was awarded the KPMG Scholarship from the KPMG Foundation. Additionally, he holds a Masters in Professional Accounting from the University of Miami and a B.S. in Industrial and Labor Relations from Cornell University.

His hobbies and interests include reading, politics, cooking, fly-fishing, and salsa dancing.

 

New: Informing Entrepreneurs: Public Corporate Disclosure and New Business Formation
Date Posted: Jul  07, 2020
We examine the relationship between public firm disclosure and aggregate new business formation. Consistent with the notion that public company disclosures provide information spillovers that reduce the extent of uncertainty about new investment opportunities, we find that increased public firm presence is positively associated with new business formation in an industry. Furthermore, using plausibly exogenous information shocks generated by new IPOs in a geographic area, we find that post-IPO, new business registration in the public company's geographic area rise by 4 to 10%, consistent with soft information channels serving to reinforce hard information in public disclosures. New IPOs are associated with significant increases in Edgar downloading activity in the IPOs’ geographic area, consistent with the notion that public firm disclosures are providing important investment opportunity information that facilitates new business formation.

New: Assessing the Payroll Protection Program: A Framework and Preliminary Results
Date Posted: Jun  05, 2020
We develop a simple model to predict requests for the Payroll Protection Program (PPP) and compare these predictions to the actual allocations. The model suggests the amount of requested funds could total $750 billion, though this is likely a high watermark conditional on several assumptions. The model also generates expectations by industry, state, and firm size, allowing us to assess model performance in the cross-section. The model performs reasonably well. Through the May 1 funding, the state-level cross-sectional model has an R2 of 99.3% and the average absolute prediction error across states is 6.4%. Interestingly, the prediction errors from the first funding round are significantly negatively correlated to the errors in the second funding round, revealing that the allocations were systematically different in the two rounds. Ultimately, the results suggest that the payroll-based model predicts PPP allocations well and that the funds were allocated as designed. One potential ...

REVISION: Civic Capital and Social Distancing During the COVID-19 Pandemic
Date Posted: Jun  03, 2020
The success of non-pharmaceutical interventions to contain pandemics often depends greatly upon voluntary compliance with government guidelines. What explains variation in voluntary compliance? Using mobile phone and survey data, we show that during the early phases of COVID-19, voluntary social distancing was higher when individuals exhibit a higher sense of civic duty. This is true for U.S. individuals, U.S. counties, and European regions. We also show that after U.S. states began re-opening, social distancing remained more prevalent in high civic capital counties. Our evidence points to the importance of civic capital in designing public policy responses to pandemics.

REVISION: Risk Perception Through the Lens of Politics in the Time of the COVID-19 Pandemic
Date Posted: Apr  13, 2020
Even when — objectively speaking — death is on the line, partisan bias still colors beliefs about facts. We use data on internet searches as well as proprietary data on county-level average daily travel distance and visits to non-essential businesses from a large sample of U.S. smartphones at the daily level and show that the higher the percentage of Trump voters in a county, holding all else equal, the lower the perception of risk associated with the COVID-19 virus and the lower the level of social distancing behavior exhibited. As Trump vote share rises, individuals search less for information on the virus, they search less for information about unemployment benefits, and they exhibit lower reductions in both their daily distance traveled and their visits to non-essential businesses. Risk perceptions in areas with high Trump vote shares increase in these areas only after 3/9/20, when it was announced that COVID-19 had struck the Conservative Political Action Committee meetings and ...

New: In Living Color: Does In-Person Screening Affect Who Gets Hired?
Date Posted: Apr  09, 2020
When hiring new workers, employers often screen large numbers of written applications before selecting a subset for more costly, in-person interviews. A large literature suggests that information frictions lead to screening on imperfect quality signals - e.g., educational pedigree and network-based referrals - and that these practices can perpetuate labor-market inequities. In theory, a reduction in the cost of in-person screening could lead to improvements in both efficiency and equity by reducing the use of blunt signals that disadvantage certain groups. We test this hypothesis by studying the introduction of a labor-market intermediary, the Accounting Rookie Camp (ARC), that greatly facilitated in-person screening in the labor market for PhD accountants. Using a novel data set with information on new PhDs, recruiters and market outcomes over 11 years, we estimate difference-in-difference models that leverage variation in the timing of ARC adoption. We find that degree program rank ...

New: Launching with a Parachute: The Gig Economy and Entrepreneurial Entry
Date Posted: Mar  24, 2020
The introduction of the gig economy creates opportunities for would-be entrepreneurs to supplement their income in downside states of the world, and provides insurance in the form of an income fallback in the event of failure. We present a conceptual framework supporting the notion that the gig economy may serve as an income supplement and as insurance against entrepreneurial-related income volatility, and utilize the arrival of the on-demand, platform-enabled gig economy in the form of the staggered rollout of ridehailing in U.S. cities to examine the effect of the arrival of the gig economy on entrepreneurial entry. The introduction of gig opportunities is associated with an increase of ~5% in the number of new business registrations in the local area, and a correspondingly-sized increase in small business lending to newly registered businesses. Internet searches for entrepreneurship-related keywords increase ~7%, lending further credence to the predictions of our conceptual ...

REVISION: Boards of a Feather: Homophily in Foreign Director Appointments Around the World
Date Posted: Mar  20, 2020
We examine whether similarities in legal, sociological, and cultural characteristics between countries (country-pair homophily) affect foreign director appointments. Our results from estimating a gravity model, which includes economic and geographic country characteristics, indicate that country-pair homophily is associated with foreign director appointments to corporate boards. Country-pair homophily plays a more significant role in the foreign director market than in other cross-border exchange, such as trade, migration, and foreign investment, consistent with homophily being more important in bilateral voluntary human exchange. We use the international IFRS adoption and the gender-quota adoption in Norway as regulatory interventions to assess the role of country-pair homophily in new foreign director appointments. We find that both events led firms to appoint directors from countries that were, prior to the regulation, less institutionally, socially and culturally similar, ...

New: Boards of a Feather: Homophily in Foreign Director Appointments Around the World
Date Posted: Mar  18, 2020
We examine whether similarities in legal, sociological, and cultural characteristics between countries (country-pair homophily) affect foreign director appointments. Our results from estimating a gravity model, which includes economic and geographic country characteristics, indicate that country-pair homophily is associated with foreign director appointments to corporate boards. Country-pair homophily plays a more significant role in the foreign director market than in other cross-border exchange, such as trade, migration, and foreign investment, consistent with homophily being more important in bilateral voluntary human exchange. We use the international IFRS adoption and the gender-quota adoption in Norway as regulatory interventions to assess the role of country-pair homophily in new foreign director appointments. We find that both events led firms to appoint directors from countries that were, prior to the regulation, less institutionally, socially and culturally similar, ...

REVISION: The Cost of Convenience: Ridehailing and Traffic Fatalities
Date Posted: Mar  04, 2020
We examine the effect of the introduction of ridehailing in U.S. cities on fatal traffic accidents. The arrival of ridehailing is associated with an increase of approximately 3% in the number of fatalities and fatal accidents, for both vehicle occupants and pedestrians. The effects persist when controlling for proxies for smartphone adoption patterns. Consistent with ridehailing increasing congestion and road usage, we find that introduction is associated with an increase in arterial vehicle miles traveled, excess gas consumption, and annual hours of delay in traffic. On the extensive margin, ridehailing’s arrival is also associated with an increase in new car registrations. These effects are higher in cities with prior higher use of public transportation and carpools, consistent with a substitution effect, and in larger cities. These effects persist over time. Back-of-the-envelope estimates of the annual cost in human lives range from $5.33B to $13.24B.

REVISION: The Cost of Convenience: Ridehailing and Traffic Fatalities
Date Posted: Jun  30, 2019
We examine the effect of the introduction of ridehailing in U.S. cities on fatal traffic accidents. The arrival of ridehailing is associated with an increase of approximately 3% in the number of fatalities and fatal accidents, for both vehicle occupants and pedestrians. Consistent with ridehailing increasing congestion and road usage, we find that introduction is associated with an increase in arterial vehicle miles traveled, excess gas consumption, and annual hours of delay in traffic, as well as new car registrations. These effects persist over time. Back-of-the-envelope estimates of the annual cost in human lives range from $5.33B to $13.24B.

REVISION: Tax-Related Human Capital: Evidence from Employee Movements
Date Posted: May  19, 2019
Despite the human capital in corporate tax departments representing the average firm’s most direct and substantial investment in tax compliance and planning, our understanding of it is limited. We shed light on the determinants and consequences of tax-related human capital by examining employee movement between the tax departments of large U.S. corporations. We first show that deteriorations in firm tax performance, measured either by increases in cash effective tax rates (ETRs) or tax-related internal control weaknesses or restatements, are associated with an increased likelihood of tax department hiring. Second, we find that tax departments tend to hire from firms with similar characteristics (such as industry membership, size, and the extent of foreign operations), suggesting that tax-related human capital is highly specific in nature. Finally, we document that firms exhibit meaningful increases in tax avoidance when they hire from low ETR firms, and that this association varies ...

New: Tax-Related Human Capital: Evidence from Employee Movements
Date Posted: May  03, 2019
Despite the human capital in corporate tax departments representing the average firm’s most direct and substantial investment in tax compliance and planning, our understanding of it is limited. We shed light on the determinants and consequences of tax-related human capital by examining employee movement between the tax departments of large U.S. corporations. We first show that deteriorations in firm tax performance, measured either by increases in cash effective tax rates (ETRs) or tax-related internal control weaknesses or restatements, are associated with an increased likelihood of tax department hiring. Second, we find that tax departments tend to hire from firms with similar characteristics (such as industry membership, size, and the extent of foreign operations), suggesting that tax-related human capital is highly specific in nature. Finally, we document that firms exhibit meaningful increases in tax avoidance when they hire from low ETR firms, and that this association varies ...

REVISION: Occupational Licensing and Accountant Quality: Evidence from the 150-Hour Rule
Date Posted: Mar  23, 2019
I examine the effects of occupational licensing on the quality of Certified Public Accountants (CPAs). I exploit the staggered adoption of the 150-hour rule, which increased the educational requirements for a CPA license. My analysis shows that the rule reduces the number of entrants into the profession and increases their wage premium. The same premium is enjoyed by grandfathered accountants, suggesting it is not a return to higher quality. Labor market proxies for quality find no difference between 150-hour rule CPAs and the rest. These findings are consistent with the theoretical argument that the rule reduced the supply of new CPAs and increased rents to the profession with little impact on quality.

REVISION: The Cost of Convenience: Ridesharing and Traffic Fatalities
Date Posted: Mar  19, 2019
We examine the effect of the introduction of ridesharing services in U.S. cities on fatal traffic accidents. The arrival of ridesharing is associated with an increase of approximately 3% in the number of motor vehicle fatalities and fatal accidents. This increase is not only for vehicle occupants but also pedestrians. We propose a simple conceptual model to explain the effects of ridesharing’s introduction on accident rates. Consistent with the notion that ridesharing increases congestion and road use, we find that its introduction is associated with an increase in arterial vehicle miles traveled, excess gas consumption, and annual hours of delay in traffic. On the extensive margin, ridesharing’s arrival is also associated with an increase in new car registrations. We find weaker increases in accidents related to drunk driving. These effects are higher in cities with prior higher use of public transportation and carpools, consistent with a substitution effect, and in larger cities ...

New: The Cost of Convenience: Ridesharing and Traffic Fatalities
Date Posted: Nov  04, 2018
We examine the effect of the introduction of ridesharing services in U.S. cities on fatal traffic accidents. The arrival of ridesharing is associated with an increase of 2%–3% in the number of motor vehicle fatalities and fatal accidents. This increase is not only for vehicle occupants but also pedestrians. We propose a simple conceptual model to explain the effects of ridesharing’s introduction on accident rates. Consistent with the notion that ridesharing increases congestion and road use, we find that its introduction is associated with an increase in arterial vehicle miles traveled, excess gas consumption, and annual hours of delay in traffic. On the extensive margin, ridesharing’s arrival is also associated with an increase in new car registrations. These effects are higher in cities with higher use of public transportation and carpools, consistent with a substitution effect, and in larger cities and cities with high vehicle ownership. The increase in accidents appears to ...

New: Is Corporate Social Responsibility an Agency Problem? Evidence from CEO Turnovers
Date Posted: Dec  21, 2014
We empirically examine two competing claims: first, if a firm’s Corporate Social Responsibility (CSR) activity is driven by its CEO’s private rent extraction (i.e. an agency problem), firms with higher CSR ratings are poorly governed and their managers are less likely to be dismissed for poor financial performance. In contrast, if CSR reflects owners’ preferences, CEOs of firms with higher CSR ratings are more likely to be removed in light of poor financial performance. We find that CEO turnover-financial performance sensitivity increases in firm CSR scores during the last years of both the outgoing CEO as well as his predecessor. Further, firm CSR ratings do not change following CEO turnover suggesting that CSR ratings are a firm characteristic. Our findings are consistent with the view that CSR is driven by shareholder preferences.

REVISION: CEO Turnover & Earnings Management: Do Family Ties Matter?
Date Posted: Dec  20, 2014
Using a hand-collected sample of Italian family and non-family-controlled firms, we investigate the moderating effect of family ownership on the relation between earnings management and CEO turnover. Consistent with agency theory, we find a positive and significant relation between earnings management and CEO turnover in the overall sample, the association being primarily driven by non-family-controlled firms. In family-controlled firms, we find that the positive relation is reduced. Furthermore, we find the association to be insignificant in cases where the CEO is a member of the controlling family. Robustness tests rule out competing hypotheses that differences in the propensity of family and non-family firms to manage earnings and ownership concentration drive our results. Overall, this study contributes to our understanding of family ownership driven differences in corporate governance systems, a relatively unexamined topic in the literature.