Accounting and Finance Seminar Series
Semester 1
Dr Mauricio Salgado-Moreno, Bank of England
Quantitative Easing and Quantitative Tightening: The Money Channel
30 Sep 2025
We develop a DSGE model in which commercial banks interact with the central bank through the reserves market, with each other through reserves and interbank markets, and with the real economy through retail loan and deposit markets. Because banks disburse loans through deposit creation, they never face financing risks (being unable to fund new loans), only refinancing risks (being unable to settle net deposit withdrawals in reserves). Permanent quantitative tightening, while reducing the equilibrium real interest rate, has significant negative effects on financial and real variables, by increasing the cost at which reserves-scarce parts of the banking sector create money. Temporary net deposit withdrawals, which affect the funding cost and loan extension of one part of the banking sector at the expense of another part, have highly asymmetric financial and real effects. The quantity and distribution of central bank reserves, and the extent of frictions in the interbank and reserves markets, critically affect the size of these effects, and can matter even in a regime of ample aggregate reserves. Countercyclical reserve injections can help to smooth the business cycle. We find that countercyclical reserve quantity rules can make sizeable contributions to welfare that can reach a similar size to the Taylor rule.
Professor Abinav Goyal, University of Birmingham
22 Oct 2025
We investigate the informative role of people in proximity to firms by constructing an innovative firm-level empirical measure based on novel satellite nightlight data. Using IPO setting, we validate that higher nightlight intensity around the firm about to go public is associated with both improved neighbourhood awareness and enhanced information production resulting in lower information asymmetry in the form of reduced under-pricing. The value-relevance of neighbourhood awareness becomes stronger when the underwriters and regulators have easy access to local information, when IPO firms are hard to value, and when they disclose limited information in their IPO prospectus. Furthermore, the effect of neighbourhood awareness is mitigated when the firm is associated with a better information environment and exhibits strong internal governance. Overall, we show that neighbourhood awareness could produce reliable value-relevant information and can have a real effect on corporate outcomes.
Professor Shawn Thomas, University of Pittsburgh, Katz Graduate School of Business
10 Nov 2025
We study the impact of negative cash flow shocks arising from production disruptions in one or more operating segments of a firm on the capital investment of other non-disrupted segments of the firm. We argue that, relative to prior studies, our empirical design allows us to provide broader and more compelling tests for both a widespread causal relation between investment and cash flow and the presence of active internal capital markets that reallocate scarce funds within multi-segment firms. We find that a $1 decrease in cash flow at a disrupted segment is associated with a decrease in investment of 16.2 cents at non-disrupted segments whose investment opportunities are seemingly unaffected by the disruption. Non- disrupted segments that are subsidized by other parts of the firm or that have poor relative investment opportunities cut investment particularly sharply. The investment-cash flow relation we detect is evident when we restrict attention to firms that we expect to be more financially constrained, consistent with the identified relation reflecting in part a financial constraints channel.
Professor Andrew Urquhart, Birmingham Business School
Sanctions, Ransomware, and Money Laundering on the Bitcoin Blockchain
12 Nov 2025
Semester 2
Professor Philipp Krueger, University of Geneva, Associate Editor of Management Science
24 Mar 2026
We introduce a novel measure of revenues from green products and services for publicly listed firms worldwide that is not spanned by prior sustainability metrics used in the literature. We show that green revenues grew at an accelerated pace after the Paris Agreement. This growth has been driven by innovative US companies converting green patents into green revenues, as well as by firms with higher sustainability-focused institutional ownership before the Paris Agreement. Furthermore, we examine the stock returns of firms with green revenues and find modest evidence of a green alpha in the post-Paris period, primarily concentrated in US stocks.
Dr Diana Bonfin, Banco de Portugal & co-editor, International Journal of Central Banking
28 April 2025
An important part of the transmission of monetary policy works through bank loans to firms. However, not all firms borrow. We examine whether monetary policy transmission can be amplified or muted through changes in the extensive margin of credit markets. We document that, on average, monetary policy decisions do not affect the likelihood that firms without previous bank debt obtain loans for the first time. However, we also show that monetary policy easing alleviates the credit constraints faced by these firms, notably when they are young. This expansionary effect of monetary policy does not lead to a deterioration in financial stability, as firms that obtain their first bank loan in these periods are, in fact, less likely to default. On the contrary, there are positive real effects on employment growth, investment and productivity growth arising from this enhanced access to credit.
Professor Hafiz Hoque, Professor of Accounting and Finance, Swansea University
The Dark Side of Credit Default Swaps: Empty Creditors and Corporate Misconduct
6 May
This paper studies whether the start of CDS trading on a firm’s debt increases corporate misconduct. Using U.S. firm-level data (2004–2021) and a difference-in-differences design, we show that misconduct frequency and penalties rise significantly after CDS initiation, consistent with weaker creditor monitoring. Results are robust to propensity-score matching, placebo tests, and alternative specifications. We further find that banks, institutional investors, and major customers mitigate but do not fully offset this increase. Effects are strongest for environmental, safety, and employment violations. Overall, CDS initiation appears to reduce monitoring and meaningfully increase misconduct.
Semester 2
Dr Fangyuan Ma, Peking University HSBC Business School (PHBS), China
Launching for the Greater Good: Spillover Effect of ESG Funds
13 Feb, 2025
We study how cannibalization concerns shape firms’ product launch decisions. In the pharmaceutical industry, the threat of generic competitor entering a branded product’s market reduces cannibalization concerns for pipeline launches, while having limited impact on the standalone value of pipeline product. We find that such competitive threats accelerate pipeline launches, which in turn decrease sales of the threatened product in a period before the competitor's actual market entry. Our findings underscore how competitive pressure accelerates the commercialization of new products by reducing cannibalization costs, fostering creative destruction and strengthening the link between innovation and growth.
Dr Rilwan Sakariyahu, University of Dundee
Re-evaluating FDI Productivity Spillovers: Insights from China-Africa Corporate Partnerships, Performance and Stock Market Reactions
25 March, 2025
We investigate how the partnerships between African and Chinese firms, which are involved in China’s projects in Africa, influence the performance of the participating African firms and the stock market. We use a large sample of African private and public firms to show that FDI productivity spillovers, attained through China-Africa partnerships, benefit foreign-owned firms operating in Africa more than indigenous firms. Further, we show that the difference is due to the absorptive capacity of the participating firms. Additional evidence shows that local firms’ participation in China’s projects conveys significant positive signals to stock market investors. More importantly, this signaling effect is stronger for indigenous African firms than for foreign-owned firms. This result suggests that the difference in absorptive capacity worsens information asymmetry between indigenous African firms and stock market investors, which leads to a stronger stock market reaction in response to the participation of indigenous African firms in China’s projects. Our results provide valuable policy implications and are robust to several econometric methods, including the average treatment effect (ATE) model, the instrumental variable (IV) approach, and the event study analysis.
Dr Sania Wadud, Leeds University Business School
Time-Varying Long Memory in Energy Futures: A Local Whittle Approach to Climate-Driven Market Dynamics
29, April, 2025
This paper investigates the long-memory characteristics in NYMEX-traded energy futures markets, crude oil, gasoline, heating oil, and natural gas, using daily data from October 2005 to April 2024. Employing a novel Time-Varying Local Whittle (TVLW) estimation approach, which incorporates Chebyshev polynomials, the study evaluates evolving persistence parameters in price series. This method facilitates robust hypothesis testing for market efficiency and captures smoothly changing long-memory properties, thereby reducing model misspecification. The analysis critically assesses previous literature’s findings of persistent autocorrelations and
temporal efficiency shifts, particularly in response to major economic events and structural breaks. In particular, this study integrates climate-related uncertainties and regulatory impacts, addressing a notable gap in existing research. By exploring the term structure of energy futures, the study further reveals maturity-based variations in market efficiency. The findings significantly enhance the understanding of pricing dynamics, risk management strategies, and portfolio management in energy markets facing heightened environmental risks and transitioning climate policies.
Professor Rajkamal Iyer, Imperial College Business School
6 May, 2025
Does deposit insurance hinder the cleansing effects of crises? We study how deposit insurance distorts allocation of deposits and credit in a crisis. For identification, we exploit changes in deposit insurance thresholds in Denmark during a crisis, in conjunction with administrative datasets. We find that individuals reallocate deposits differently based on the deposit insurance threshold. Higher deposit insurance benefits the funding of weaker banks with worse borrowers. This allows weaker banks to maintain elevated credit supply to worse firms which eventually default. Our results highlight erosion of depositor discipline and larger benefits to weaker banks from higher deposit insurance limits.
Professor Andrey Malenko, Boston College, Carroll School of Management, USA
12 May, 2024
Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift towards “pass-through voting”, with fund managers offering their investors a choice: delegate their votes to the fund or vote themselves. We develop a theory of delegation of voting rights to study the implications of such voting choice. If investors have heterogeneous preferences, voting choice may decrease investor welfare because investors retain voting rights excessively, prioritizing their preferences over information. If investors have heterogeneous information, voting choice generally improves investor welfare. However, it may decrease fund managers’ information collection effort, resulting in less informed voting outcomes.
Professor Andrew Pierce, Robinson College of Business, Georgia State University, USA
20 May, 2025
Professor Andrew Urquhart, Birmingham Business School
Sanctions, Ransomware, and Money Laundering on the Bitcoin blockchain
28 May, 2025
Bitcoin’s pseudonym privacy seen as one of the benefits, however given the permissionless type blockchain that Bitcoin is on, anyone can view transactions and flows. In this paper, we study the transactions and flows of Bitcoin by governmental sanctioned entities. We find that sanctioned entities seem to cluster their flows around a few exchanges, but regulation reduces their flows when introduced in countries with higher legal system quality. However, this regulatory impact is limited in countries with lower legal system quality indicating the need for global regulation to combat illegal use of Bitcoin.
Professor Mahbub Zaman, Aarhus Business School, Aarhus University, Denmark
3 June, 2025