Assistant Professor of Accounting
Paton and Drebin Faculty Fellow
Sanford R. Robertson Assistant Professorship

Anna's research explores the risks that companies face when transacting with their suppliers and customers, as well as the mechanisms used to mitigate those risks. Specifically, Anna is a leading academic in the field of supply chain finance. She has published multiple papers on trade credit - ranging from understanding why it is used so widely, to how it may introduce credit risk spillovers through the corporate economy. Her research is regularly used by companies to assess and hedge against trade credit risk.

Anna pursues research questions in the area of supply chain financing that are of cross-disciplinary interest. Her papers contribute to literatures in accounting, finance, and economics, and she has single-authored papers published in premier journals across these three fields. At a high level, her research provides three key innovative insights: (1) financial reporting serves a key role in monitoring suppliers and customers, (2) trade credit facilitates the spread of credit risk through the corporate economy, and (3) human discretion plays a limited role in trade credit decisions, in the context of AI-based lending models. Her work is published in the Journal of Political Economy, the Journal of Financial Economics, the Journal of Accounting Research, the Journal of Accounting and Economics, and The Accounting Review.

In recognition of research achievements, Anna was awarded both the Paton and Drebin Faculty Fellowship and the Sanford R. Robertson Junior Faculty Award - awarded each year to one assistant professor for scholarly excellence - from the University of Michigan. She also received the Best Dissertation Award from the Financial Accounting and Reporting Section of the American Accounting Association. Anna also brings her research insights into the classroom; for her teaching excellence, she was awarded the MIT Sloan top teaching award in 2015: MBA Teacher of the Year.


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"Credit Market Disruptions and Liquidity Spillover Effects in the Supply Chain"

Journal of Political Economy 128 (2020): 3434-3468.

Cited by the Federal Reserve Bank of New York in motivating their monetary response to COVID. Available at

Suppliers exposed to an exogenous decline in bank financing pass this liquidity shock on to their downstream customers. The spillover results in a spike in credit risk and a reduction in employment for downstream customers, highlighting the importance of liquidity spillovers on corporate sector outcomes.
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"Machine + Man: A field experiment on the role of discretion in augmenting AI-based lending models"

with Andrea Down and Mihir Mehta
Journal of Accounting and Economics (2020): 101360.

Using a randomized controlled experiment, our study analyzes how augmenting a machine-based lending model with additional human discretion impacts loan outcomes.
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"The value of collateral in trade finance"

Journal of Financial Economics 134 (2019): 70-90.

The paper demonstrates the important role of legal protections - specifically the supplier's right to reclaim collateral - in supporting inter-firm trade.
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"Do Strict Regulators Increase the Transparency of Banks?"

with Joao Granja and Joseph Weber
Journal of Accounting Research 57 (2019): 603-637.

We investigate the role that regulatory strictness plays in enforcing financial reporting transparency in the U.S. banking industry. We find that strict regulators enforce more restatements of bank call reports.
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"The Impact of Balanced Budget Restrictions on States' Fiscal Actions"

with Reining Petacchi and Joseph Weber
The Accounting Review 92 (2017): 51-71.

Politicians facing budget constraints shift money from funds that do not face balanced budget rules into funds that must meet the balanced budget. We also show that politicians in states with strict budget rules sell public assets - often at fire sale prices - to close budget shortfalls.
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"Mitigating Incentive Conflicts in Inter-Firm Relationships: Evidence from Long-Term Supply Contracts"

Journal of Accounting and Economics 56 (2013): 19-39.

Examining a large sample of long-term supply contracts, I show that managers design supply contracts in anticipation of future economic frictions such as hold-up costs and information asymmetry. The study highlights the role of financial reporting in monitoring supply chain partners.
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"The impact of financial reporting quality on debt contracting: Evidence from internal control weakness reports."

with Regina Wittenberg-Moerman
Journal of Accounting Research 49 (2011): 97-136.

We show that lenders rationally account for the quality of financial reports when choosing the mix of features to include in the loan contract. Specifically, lenders substitute away from financial-reporting-based features when the borrower has a SOX internal control weakness.
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"The Long and Short of It: The Post-Crisis Corporate CDS Market"

with Nina Boyarchenko and Or Shachar
Economic Policy Review 26 (2020): 1-48.

This paper utilizes supervisory, contract-level, credit default swap data (from the DTCC) to provide new insights on the decisions made by participants in the CDS market.
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"Discrimination in the Payments Chain"

with Michael Minnis

We examine whether discrimination against firms' credit managers affects their ability to collect trade payments during the COVID-19 pandemic. The ability to collect from customers varies based on who the supplier's trade credit officer is: credit officers who are either female or African American saw a 20-30% larger increase in overdue bills at the onset of COVID-19, relative to suppliers with non-minority credit officers.


Anna's work as a leading academic in the field of supply chain finance, small business lending and payments has been acknowledged in multiple forums around the world. She has a work ethic and sharpness of mind that helped Credit2B build a highly predictive business risk platform leveraging alternative data, AI and ML. Plus she was super with our clients.

Shyarsh Desai, CEO of Credit2B

Anna's research is used by trade credit professionals and the companies that serve them. She was on the advisory board of Credit2B from 2015 until they were acquired in 2018. She serves as a keynote speaker at annual meetings and trade associations, and her research has been used to develop credit models and hedging strategies related to trade credit.

She has served in an advisory role for many companies including those listed below.


Anna teaches at the undergraduate and MBA levels. Her courses include:

  1. Corporate Financial Reporting, and undergraduate elective course at MIT
  2. Financial Accounting, the MBA core course at MIT
  3. Financial Accounting, the MBA core course at Michigan
  4. The Multidisciplinary Action Project at Michigan

She consistently receives teaching ratings at the very top of the programs in which she teaches, earning an average of 4.7/5.0 at Michigan and an average of 6.8/7.0 at MIT. In 2015, she was honored to win MIT Sloan's top teaching award: MBA Teacher of the Year.

Current syllabus for Accounting 502


Anna M. Costello
Phone: 574-514-5126

University of Michigan
Ross School of Business, R3348
Ann Arbor, MI 48109