FRIC/Finance Seminar with Roberto Steri, University of Lausanne

On Friday March 1, 2019 Roberto Steri, University of Lausanne, will be giving a seminar on the paper: "The Sources of Financing Constraints".

Friday, March 1, 2019 - 11:00 to 12:15

The Department of Finance and FRIC, Center for Financial Frictions, are proud to announce the upcoming seminar with Roberto Steri, University of Lausanne.

Roberto Steri will present:

The Sources of Financing Constraints

In order to identify the relevant sources of firms’ financing constraints, we ask what financial frictions matter for corporate policies. To that end, we build, solve, and estimate a range of dynamic models of corporate investment and financing, embedding a host of financial frictions. We focus on limited enforcement, moral hazard, and tradeoff models. All models share a common technology, but differ in the friction generating financing constraints. Using panel data on Compustat firms for the period 1980-2015 and a more recent dataset on private firms from Orbis, we determine which features of the observed data allow to distinguish among the models, and we assess which model performs best at rationalizing observed corporate investment and financing policies across various samples. Our tests, based on empirical policy function benchmarks, favor trade-off models for larger Compustat firms, limited commitment models for smaller firms, and moral hazard models for private firms. Our estimates point to significant financing constraints due to agency frictions.

Solbjerg Plads 3,
2000 Frederiksberg
Room: SPs13


The page was last edited by: Department of Finance // 02/27/2019