Friday, September 16th, 2016

  Xiaoyun Yu, Indiana

  Where:  CSOM 2-215

  When: 10:30am-12:00pm


  Transporting Transparency: Director Foreign Experience and Corporate Information Environment


This paper examines how board directors’ foreign experience affects a firm’s informationenvironment in emerging markets. Using the staggered introduction of a policy in China to attract overseas returnees as a natural experiment, we document a positive, causal effect of directors’ foreign experience on the informativeness of the firm’s stock price. We examine potential channels, and find that after individuals with foreign experience join the board, earnings transparency increases, and firms are more likely to hire high-quality auditors and to engage in voluntary disclosure. Furthermore, the information benefit brought by directors with foreign experience spills over to peer firms. These findings provide direct evidence on how board directors help shape corporate transparency in emerging markets.

October 7th, 2016

  Nobu Kiyotaki, Princeton

  Where:  CSOM L-110

  When: 10:30am-12:00pm


  The Great Escape?  A Quantitative Evaluation of the Fed's Liquidity Facilities


We introduce liquidity frictions into an otherwise standard DSGE model with nominal and real rigidities and ask: Can a shock to the liquidity of private paper lead to a collapse in short-term nominal interest rates and a recession like the one associated with the 2008 U.S. financial crisis? Once the nominal interest rate reaches the zero bound, what are the effects of interventions in which the government provides liquidity in exchange for illiquid private paper? We find that the effects of the liquidity shock can be large, and show some numerical examples in which the liquidity facilities prevented a repeat of the Great Depression in 2008-2009.

November 11th, 2016

  Ohad Kadan, Washington

  Where: CSOM 2-219

  When: 10:30am-12:00pm


  Estimating the Value of Information


We derive a general expression for the value of information to a small price-taking investor in a dynamic environment and provide a framework for its estimation from index options. We apply this framework and estimate that a consumer-investor with commonly-used preference parameters would pay 1 to 4 percent of her wealth to preview and act on key macroeconomic in-
dicators (GDP, unemployment, etc.). The value of information increases with the time discount factor, decreases with risk aversion, and increases with the elasticity of intertemporal substitution. Rational expectations (or lack thereof) play an important role in the value of information.

November 18th, 2016

  Nicolas Crouzet, Northwestern

  Where: CSOM L-114

  When: 10:30am-12:00pm


  Default, Debt Maturity and Investment Dynamics


This paper studies the optimal maturity structure of debt in a dynamic investment model with financial frictions. External financing is costly because firms have limited liability, and default entails deadweight output losses. Firms operate long-term assets, and may thus want to issue long-term debt in order to reduce short-term refinancing risk. However, lack of commitment on the firms’ part makes long-term debt issuance costly, relative to short-term debt. In theory, the optimal maturity structure of debt should trade off these two forces. In numerical calibrations of the model, however, short-term financing strongly dominates. Optimal borrowing policies in fact often involve active maturity shortening, in particular via debt repurchases. The optimality of short-term financing suggests that none of the benefits traditionally associated with long-term financing — such as adressing maturity mismatch — are quantitatively significant in “neo-classical” models of the firm.

December 9th, 2016

  David Sraer, Berkeley

March 10th, 2017

  David Yermack, NYU

March, 31st, 2017

  Stijn Van Nieuwerburgh, NYU

April 7th. 2017

  Brent Neiman, Chicago

April 14th, 2017

  Manuel Adelino, Duke

April 28th, 2017

  Stefano Giglio, Chicago

May 5th, 2017

  Lorenzo Garlappi, UBC