This course should enable participants to understand and conduct research in corporate finance with a particular focus on empirical methodology. It is taught at a research master level and combines two objectives. First, participants learn some of the classic contributions to the theory of modern corporate finance and understand some of the main contributions in the respective area. Second, the course introduces key empirical contributions to the field. Corporate Finance has developed a strong focus on the need to address endogeneity concerns and to provide valid identification. This course is intended to provide students with a good understanding of the main techniques.
What is Corporate Finance?
Research in Corporate Finance addresses the question how corporations raise financing. To raise financing, corporations have to make credible commitments to provide investors with adequate returns. As such, questions of corporate governance are an integral part of corporate finance: This course will provide a selective overview of some of the main topics. Students are expected to continue with a PhD-level course in corporate finance and to also attend a Master-level course in empirical finance to complement this course.
Format and Scope
Each session lasts for two 90-minutes blocks and covers one key area of corporate finance. We will cover the some key theoretical papers as well as some important empirical applications, especially recent applications with a focus on methodology. Session will combine lecture-style presentations and student presentations
Students will need a reasonably good understanding of microeconomics. Knowledge of econometrics is important and a passing grade in Advanced Econometrics is a formal requirement. General financial theory (e.g., portfolio theory, CAPM, valuation, etc.) is assumed.
There is no good textbook for Research Master and PhD courses in corporate finance. Most textbooks are written for MBA students and advanced bachelor students and have a more practitioner-oriented focus with little coverage of current research and research methodology. As such, each session will be based on some key papers, which will be discussed in class.
Assessment is based on a 90-minutes closed-book exam. Questions will cover the theoretical as well as the empirical topics of this course. There will be a limited degree of choice of topics.
The course is offered in six sessions. Each session will last for four hours (two blocks of 90 minutes each). About 120 minutes will take the form of interactive lectures by the instructors. Another 60 minutes will be devoted to presentations by students. Each student is expected to contribute three short presentations. Each presentation should summarize an assigned research paper and last 20 minutes for the presentation itself plus 10 minutes of discussion.
L 9, 1-2 room: 4.09