Boris Nikolov (Lausanne - SFI)

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Boris Nikolov

Finance

A seminar by Boris Nikolov from the University of Lausanne and Swiss Finance Institute

Title: The Sources of Financing Constraints

Abstract: In order to identify the relevant sources of rms' nancing constraints, we ask what nancial frictions matter for corporate policies. To that end, we build, solve, and estimate a range of dynamic models of corporate investment and nancing, embedding a host of nancial frictions. We focus on limited enforcement, moral hazard, and tradeo models. All models share a common technology, but dier in the friction generating nancing constraints. Using panel data on Compustat rms for the period 1980-2015 and a more recent dataset on private rms 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 nancing policies across various samples. Our tests, based on empirical policy function benchmarks, favor trade-o models for larger Compustat rms, limited commitment models for smaller rms, and moral hazard models for private rms. Our estimates point to signicant nancing constraints due to agency frictions.

Start date:

11am Friday, 6 Sep 2019

End date:

12.30pm Friday, 6 Sep 2019

Venue:

CBE LT2

Presenter(s):

Boris Nikolov

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