This course will cover a wide range of topics in empirical corporate finance. The material covered in this course will provide students with: (i) rigorous understanding and ability to apply various empirical methods used in corporate finance research; and (ii) interesting and exciting topics to consider for their dissertation.

Learning Outcomes

Upon successful completion, students will have the knowledge and skills to:

1. Describe the current state of findings in main topics of corporate finance;
2. Critically analyse the utilisation of the main data sources and data issues in empirical corporate finance;
3. Use the main econometric techniques used in empirical corporate finance; and
4. Evaluate and develop research ideas in empirical corporate finance.

Research-Led Teaching

Students will be introduced to research through the use of readings from academic journals. Students will be engaged in discuss the topics, present in their own format, and propose their comments and thoughts. Each topic will require 3 hours. If student enrollment>4, more difficult topic will be shared by 2 students. If enrollment<4, the lecturer will fill the gaps.

Required Resources

Internet access and Microsoft office to complete the projects. The articles in the reading list can be accessed through the ANU library's online journal subscriptions or collections (https://anulib.anu.edu.au/find-access/e-resources-databases), or from online PDF or from the lecturer.

Each student will sign up for two presentations, one from the reading list (Week 3 - Week 6) and the other from the optional topics (Week 7 - Week 10). The process for signing up for presentations will be advised to students in the first class.

Reading List

Databases, Usages, Biases and Errors

Papers

1.     CHHAOCHHARIA, VIDHI and YANIV GRINSTEIN, 2009. “CEO Compensation and Board Structure”, Journal of Finance. 

2.     Ljungqvist, Alexander, Christopher Malloy and Felicia Marston 2009, Rewriting History, Journal of Finance 64, 1935-1960.

3.     Shumway, Tyler, 1997, The Delisting Bias in CRSP Data." Journal of Finance 52, 327- 340.

4.     * Bhojraj, Sanjeev, Charles M. C. Lee and Derek Oler (2003). "What's My Line? A Comparison of Industry Classification Schemes for Capital Market Research." Journal of Accounting Research; 41, 745-774.

Standard error estimation

Papers

1.   Petersen, Mitchell A., 2009, Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches, Review of Financial Studies 22, 435-480.

2.   Fama, Eugene F., and James D. MacBeth, 1973, Risk, Return and Equilibrium: Empirical Tests, Journal of Political Economy 81, 607-636.

3. Bertrand, M., E. Duflo, and S. Mullainathan. 2004. How much should we trust difference- in-difference estimates? Quarterly Journal of Economics, 119(1): 249-275.

Econometric references:

1. Angrist-Pischke, Chapter 8 and Sections 3.4.2, 4.6.3, "Mostly Harmless Econometrics An Empiricist's Companion"

2. Greene, Section 17.3 "Econometric Analysis"

Panel Data

Papers

1.       Khwaja, Asim Ijaz, and Atif Mian, 2008, “Tracing the Impact of Bank Liquidity Shocks: Evidence from an Emerging Market,” American Economic Review, 98(4), 1413-1442.

2.       Paravisini, Daniel, Veronica Rappoport, Philipp Schnabl, and Daniel Wolfenzon, 2014, “Dissecting the effect of credit supply on trade: Evidence from matched credit-export data,” Review of Economic Studies, 1-26.

3.       Gormley, Todd A., 2010, “The impact of foreign bank entry in emerging markets: evidence from India,” Journal of Financial Intermediation, 19(1), 26-51.

4.       Bennedsen, M., K Nielsen, F. Perez-Gonzalez, and D. Wolfenzon, 2007, Inside the family firm: The role of families in succession decisions and performance, Quarterly Journal of Economics, 122, 647-691. 22.

5.       Giroud, Xavier, Holger M. Mueller, Alex Stomper, and Arne Westerkamp, 2012, “Snow and leverage,” Review of Financial Studies, 25, 680-710.

Econometric references

1.  Angrist-Pischke, Sections 5.1, 5.3

2.  Greene, Chapter 11

3.  Wooldridge, Chapter 10 "Introductory Econometrics: A Modern Approach"

4.  McKinnish, T. 2008. Panel Data Models and Transitory Fluctuations in the Explanatory Variable In Modeling and Evaluating Treatment Effects in Econometrics, eds. Daniel L. Millimet, Jeffrey A. Smith, and Edward J. Vytlacil, 335–58. Amsterdam: Elsevier.

Causality

Papers

1.   Rajan, Raghuram G., and Luigi Zingales, 1998, “Financial dependence and growth,” American Economic Review, 88(3), 559-586.

2. Matsa, David A., 2010 “Capital structure as a strategic variable: Evidence from collective bargaining,” Journal of Finance, 65(3), 1197-1232.

3. Agarwal, Ashwini, and David A. Matsa, 2013, “Labor unemployment risk and corporate financing decision,” Journal of Financial Economics, 108(2), pp. 449-470.

Econometrics references

1.  Roberts-Whited, Section 2, "Endogeneity in Empirical Corporate Finance"

2.  Angrist-Pischke, Section 3.2

3.  Greene, Sections 5.8-5.9

4.  Wooldridge, Sections 4.3, 4.4

Instrumental Variables

1.  Roberts-Whited, Section 3

2.  Angrist-Pischke, Sections 4.1, 4.4, 4.6

3.  Greene, Sections 8.2-8.5

4.  Wooldridge, Chapter 5 10

Natural Experiments

Papers

1.       Jayaratne, Jith, and Philip Strahan, 1996, “The finance-growth nexus evidence from bank branch deregulation,” Quarterly Journal of Economics, 111(3), 639-670.

2.       Bertrand, Marianne, and Sendhil Mullainathan, 2003 “Enjoying the quiet life? Corporate governance and managerial preferences,” Journal of Political Economy, 111(5), 1043-75.

3.       Almeida, Heitor, Vyacheslav Fos, and Mathias Kronlund, “The Real Effects of Share Repurchases,” Journal of Financial Economics

4.       Levi, Yaron, 2014, “Information architecture and intertemporal choice: A randomized experiment in the United States,” working paper, http://ssrn.com/abstract=2524018

5.       Cole, Shawn, Martin Kanz, and Leora Klapper, 2015, “Incentivizing calculated risk taking: Evidence from an experiment with commercial bank loan officers,” Journal of Finance 70(2), 537-575.

Econometric references

1.  Roberts-Whited, Sections 2.2 and 4

2.  Angrist-Pischke, Section 5.2

 

Regression Discontinuity

Papers

1.     Malenko, Nadya, and Yao Shen, 2015, “The role of proxy advisory firms: Evidence from a regression-discontinuity design,” working paper, http://ssrn.com/abstract=2526799

 2.     Agrawal, Ashwini, 2013, “The impact of investor protection law on corporate policy and performance: evidence from the blue sky laws,” Journal of Financial Economics, 107, 417-35.

Econometric reference

1.  Roberts-Whited, Section 5

2.  Angrist-Pischke, Chapter 6

Matching and others

Papers

1.     Morse, Adair, 2011, “Payday lenders: heroes or villains?” Journal of Financial Economics, 102, 28-44.

2.     Colak, Gonul and Toni Whited, 2007, Spin-offs, divestitures, and conglomerate investment, Review of Financial Studies 20, 557-595.

Econometrics reference

1.  Roberts-Whited, Section 6

2.  Angrist-Pischke, Sections 3.3.1-3.3.3

3.  Wooldridge, Section 21.3.5

Structural Estimation

 1. Strebulaev, Ilya A., and Toni M. Whited, 2012, “Dynamic Models and Structural Estimation in Corporate Finance,” working paper, http://ssrn.com/abstract=2091854

Limitations

 1.  Ali, A., S. Klasa, and E. Yeung, 2009, “The limitations of industry concentration measures constructed with Compustat Data: Implications for finance research,” Review of Financial Studies, 22(10), 3839-71

 2.  Gormley, Todd A., and David A. Matsa, 2013, “Common Errors: How to (and Not to) Control for Unobserved Heterogeneity,” Review of Financial Studies.

Reading list for chosen topics

Suggested optional topics.

Students’ preferences that are not listed here can also be considered.

1.      Financial inclusion/exclusion, micro financial institutions/Fin-tech

2.      Behavioral bias -- Personality traits and risk taking

3.      Bank crisis, regulation, global fund flows

4.      Classic topics in emerging technology/economies, Capital structure/dividend

5.      Gender Equity, behavior bias – discrimination and inefficiency

6.      Privatization, state capitalism

7.      Culture, family, enterprises

8.      Governance, Managerial Incentives and Performance

9.      Political Economy

10.   Human Capital, family life cycle

Staff Feedback

Students will be given feedback in the following forms in this course:

• written comments
• verbal comments
• feedback to whole class, groups, individuals, focus group etc

Student Feedback

ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.

Class Schedule

Week/Session	Summary of Activities	Assessment
1	Course structure, optional topic choices, presentation signups
2	Databases, Usages, Biases and errors (refer to the reading list)
3	Standard error estimation, Panel data (refer to the reading list)	Presentation 1 begin
4	Causality, Instrumental variables (refer to the reading list)
5	National Experiment, Regression Discontinuity (refer to the reading list)
6	Matching and others, structural estimation (refer to the reading list) Sample write-up choice discussed and determined
7	Chosen topic 1 (reading list will be provided after week 1)	Presentation 2 begin
8	Chosen topic 2 (reading list will be provided after week 1)
9	Chosen topic 3 (reading list will be provided after week 1)
10	Chosen topic 4 (reading list will be provided after week 1)
11	The initial draft of sample write-ups discussion and feedbacks
12	Final sample write-ups are due, further discussion and feedbacks	Research write-up

Tutorial Registration

There is no tutorial for this course.

Assessment Summary

Assessment task	Value	Due Date	Return of assessment	Learning Outcomes
Class discussions	10 %	22/02/2021	28/05/2021	1, 2
Presentation 1	30 %	09/03/2021	09/04/2021	1, 2, 3
Presentation 2	30 %	19/04/2021	21/05/2021	1, 2, 3
Research write-up	30 %	28/05/2021	01/07/2021	4

* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details

Policies

ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:

• Student Assessment (Coursework) Policy and Procedure
• Special Assessment Consideration Policy and General Information 
• Student Surveys and Evaluations
• Deferred Examinations
• Student Complaint Resolution Policy and Procedure

Assessment Requirements

The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.

Moderation of Assessment

Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.

Participation

The teaching format will be regular in-person classroom lectures (recorded) in a dual-delivery venue that will also allow remote students to participate live online via Zoom.

Examination(s)

No examination is held in this course.

Assessment Task 1

Class discussions

This is a continuous assessment component throughout the semester. Students are expected to participate in discussions, comment on published research papers, and give feedback to fellow students and presentations. In this task, you will be assessed on your contribution to describing the current state of findings in main topics of corporate finance (learning outcome one) and critically analyse the utilisation of the main data sources and issues in empirical corporate finance (learning outcome two). Students will be given regular informal feedback on their performance in this assessment whilst formal marking of this component will be discussed with the students by the end of weeks 6 and 12.

Assessment Task 2

Presentation 1

This is an individual presentation using published papers from the reading list. During the selected week, the student is expected to lead the discussion of the chosen topic through the presentation while the lecturer provides assistance of leads, directions, clarification, and supplements when the student's performance is below expectation. Students will sign up to a topic in the first week of class. Additional information and a marking rubric will be provided to each student two weeks before his/her presentation. This activity will demonstrate your development as a researcher in corporate finance. Presentations will be recorded and you will be given feedback on your presentation and discussion on a regular basis.

Assessment Task 3

Presentation 2

This is an individual presentation from a chosen topic to be discussed with the course convener. During the selected week, the student is expected to lead the discussion of the chosen topic through the presentation while the lecturer provides assistance of leads, directions, clarification, and supplements when the student's performance is below expectation. Students will sign up to a topic in the first week of class. Additional information and a marking rubric will be provided to each student two weeks before his/her presentation. This activity will demonstrate your development as a researcher in corporate finance. Presentations will be recorded and you will be given feedback on your presentation and discussion on a regular basis.

Assessment Task 4

Research write-up

This could be a literature review on a specific current topic or a write up of the student’s own research proposal. The page limit will depend on the chosen format, but the suggested limit is between 15-25 pages. The topic will be discussed with each student. The students will have the option to submit a draft write-up that will be reviewed by the lecturer and discussed in the class, with comments, suggestions and time for revision provided. The submission of the draft write-up is not mandatory. The topic and format will be decided by week 7 (a marking rubric will be provided on Wattle by week 7), the first draft can be submitted in week 10 (show the lecturer) and discussed in class in week 11. The final version is due by week 12. Marks will be awarded for the final submission, not the draft submission. The write-up will be submitted via Wattle.

Academic Integrity

Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.

The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.

The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.

Online Submission

You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. Unless an exemption has been approved by the Associate Dean (Education) submission must be through Turnitin.

Hardcopy Submission

For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.

Late Submission

No submission of assessment tasks without an extension after the due date will be permitted. If an assessment task is not submitted by the due date, a mark of 0 will be awarded

Referencing Requirements

Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.

Returning Assignments

Reports will be returned with comments during the lecture time

Extensions and Penalties

Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.

Resubmission of Assignments

No resubmission of assignments is allowed.

Privacy Notice

The ANU has made a number of third party, online, databases available for students to use. Use of each online database is conditional on student end users first agreeing to the database licensor’s terms of service and/or privacy policy. Students should read these carefully. In some cases student end users will be required to register an account with the database licensor and submit personal information, including their: first name; last name; ANU email address; and other information.
In cases where student end users are asked to submit ‘content’ to a database, such as an assignment or short answers, the database licensor may only use the student’s ‘content’ in accordance with the terms of service – including any (copyright) licence the student grants to the database licensor. Any personal information or content a student submits may be stored by the licensor, potentially offshore, and will be used to process the database service in accordance with the licensors terms of service and/or privacy policy.
If any student chooses not to agree to the database licensor’s terms of service or privacy policy, the student will not be able to access and use the database. In these circumstances students should contact their lecturer to enquire about alternative arrangements that are available.

Distribution of grades policy

Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.

Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.

Support for students

The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).

• ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
• ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
• ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
• ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
• ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
• ANUSA supports and represents undergraduate and ANU College students
• PARSA supports and represents postgraduate and research students