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Regular version of the site

Research Workshop of the Finance Department at Higher School of Economics

Track: Empirical Corporate Finance Research


Ovanesova J. “Analysis of dividend payments of international oil companies”

07.12.2015 1) Presentation and discussion of the research Advertising, Attention, and Financial Markets” by Prof. Stefan Ruenzi, Dr. of Finance Department of International Finance Business School University of Mannheim (Germany)



  • Earlier papers (e.g. Lou, 2014, RFS) argue that firms can use advertising to inflate short term stock prices
  • Using a comprehensive dataset on high-frequency advertising expenditures we examine the impact of advertising on financial markets
  • A necessary condition for advertising to have an impact on markets is that it creates investor attention
  • Using Wikipedia page counts we find that advertising does create attention
  • However, this leads to only a very small impact on trading activity
  • There is NO impact whatsoever on prices.
  • We also show that earlier findings are plagued by endogeneity and reverse causality

 2) Presentation and discussion of the research “Gender Bias in the Mutual Fund Industry” Prof. Alexandra Niessen-Ruenzi, Dr. of Finance and Insurance, Area Banking, Business School University of Mannheim (Germany)


  • We observe a low fraction of female mutual fund managers in the U.S. mutual fund industry and try to explain this phenomenon.
  • We do not find any performance differences that could justify the low fraction of women in the industry
  • However, we do find that female managed funds generate lower inflows of about 10 percentage points.
  • A lab experiment supports this finding
  • We conclude that gender bias affects investment decisions and leads to a lower fraction of female fund managers

Kokorev D. “Portfolio Firms Performance: Do Private Equity Funds Matter on Emerging Markets?”


Private equity funds are relatively new and yet not thoroughly examined financial market participants. Research papers on private equity that appeared during the last thirty years are mostly focused on the peculiarities of the funds’ functioning and their impact on the portfolio companies and, consequently, on the real sector of the economy. These papers however are concentrated on the U.S., UK and other developed markets, whereas the studies analyzing the impact of private equity on the effectiveness of the portfolio firms in emerging markets are still rare.

Our pilot case-based study, panel data analysis and DEA (Data Envelopment Analysis) aim at testing a set of hypotheses on comparative performance of Russian portfolio companies and peers. We also try to estimate the influence of a company’s industry and controlling interest in a company by PE fund on efficiency of the portfolio company.

The results of the panel data analysis show that that private equity funds lead to higher performance of portfolio firms than the performance of peer firms. The presence of foreign investors in a fund, as well as the acquisition of a majority stake, has a positive effect on the efficiency of the investee company. The preliminary results of our pilot research allow us to formulate policy implications for the development of private equity industry for the emerging markets.

Stepanova A., Rabotinsky I. “Influence of Corporate Governance on Cost of Debt: Evidence from Russia”

14.09.2015 Pirogov N., Anilov A. "The relationship between dividend and financing decisions (following the example of companies on the emerging capital markets)"

The research investigates interrelation between financing policy and decisions on shareholders’ payout in developing countries’ companies. This research includes the wide sample of companies from nine developing countries between 2007-2013, several specifications of financing and payout policy. We employ systems of simultaneous equations to capture the interrelation between financing and payout policies and fight against endogeneity. We managed to find the strong evidence for interrelation between two policies, which, however, depends on the specifications of financing and payout policy and on the mother-country of company.

1) Presentation and discussion of the book “The Warren Buffett Philosophy of Investment: How a Combination of Value Investing and Smart Acquisitions Drives Extraordinary Success” by E. Chirkova.


The book offers a comprehensive and detailed assessment of the intellectual backbone of Buffett's investment methodology of the kind that has never been accomplished previously. “The Warren Buffett Philosophy of Investment” differs from other books in the subject in a number of material ways.  

The author analyses not  only  Buffett’s  investment principals,  but also the tactics that Buffett uses when acquiring companies and making  large portfolio investments, or positioning Berkshire as a white knight and “the right home for the right people”. 

The author  also discusses Buffett’s views on how the financial markets function and his position on key questions of corporate finance. These issues have not been assessed analytically in the available literature. The book compares Buffett’s views on corporate finance with mainstream concepts that are the current consensus among scholars. The author finds that Buffett’s better conceptual foundation is the cornerstone of his successful strategy. The  book also discusses how Buffett’s different investment principles are logically interconnected; for instance, how Buffett’s concept of risk, where he disagrees with its traditional interpretation as volatility, or his suspicions about investing in technology companies and his long-term investment horizon are linked to one another.

The  author  argues  that  replicating  Buffett’s  success  may be extremely difficult. Investment principals  are  only  a small  component  of  Buffett’s  strategy.  Other factors are  also  critical:

  • Advantages  connected  to  Berkshire’s  organizational structure  as  a corporation as opposed  to  a  mutual  fund;
  • The  reduction  of  the  cost  of  debt  through achieving a negative cost of borrowing in the insurance business;
  • Additional  return  earned  on  Buffett’s reputational advantage as a “white knight” when  positioning himself for  large portfolio transactions and company acquisitions, refusing  to  restructure acquired business and allowing them to remain in their original form and becoming the prestigious acquirer of choice who thus obtains low prices from sellers;
  • The  role  of "luck" factors where, for instance, the start of Buffett’s activity coincided with  the onset of a  long-term  bull  market, among other considerations.

The  author  concludes that  Buffett’s  success  is  explained  not  only  by  his ability to buy companies with  competitive  advantage, but also by the fact that as a buyer, he has an equivalent competitive advantage with respect to other buyers. Buffett developed a strong personal brand, where the essence of his business is his personal guarantees. A person without such  a  brand  will  not  be  able  to replicate his success. From this assessment follow the far-reaching radical conclusions about a broad range of possible outcomes once Buffett steps down as CEO. The factors determining Berkshire’s prospects after Buffett are discussed in the Conclusion of the book.

2) Stepanova A., Ivantsova O. “Market perception: is corporate governance an important signal for investors? Evidence from the banking sector”


We examine how market sees corporate governance in commercial banks and aim to compare market perception of ‘good’ or ‘bad’ governance in a bank with an actual effect the corporate governance has on bank’s fundamental value. In contrast with the conventional financial theories we saw in the recent years that the capital markets are not so efficient, i.e. the market perception of performance may go far away from the fundamental values. Dropping the classic assumption of efficient markets we analyze whether it is worth to invest money into corporate governance or that’s quite useless from the shareholder’s point of view. The sample consists of around 470 public banks in North America and Europe during the period of 2010-2012.

08.06.2015 Skvortsova I., Ivashkovskaya I. “Diversification and Firm Performance: Evidence from Organic and Inorganic Growth in Developed and Emerging Capital Markets”


We address the issue of differences in firm performance depending on the pattern of diversification strategy. We analyze differences in firm performance, as well as the form of dependence between the level of diversification and performance depending on the pattern of diversification through organic or inorganic growth.

On the sample of 861 companies with 253 companies representing emerging capital markets and 608 companies from developed capital markets for the period of 2009-2012 we show that in developed capital markets corporate diversification through organic growth creates value in the short-term and long-term run while diversification through inorganic growth creates value only in the short-term period. We also prove that in emerging capital markets diversification through organic growth destroys value in the short-term period but results in value creation for the inorganic pattern of diversification in the short-term and long-term run.

18.05.2015 Cherkasova V., Rechinskaya V. “Russian Companies’ Incentives for Sub-optimal Investment in Different Stages of the Life Cycle”

27.04.2015 Aleskerov F., Andrievskaya I. “Key Borrowers Detected by the Intensities of Their Short-Range Interactions”

13.04.2015 Kuzubov S. “The Impact of GRI on the Relevance of Non-financial Information: an Empirical Study of Russian Companies”

30.03.2015 Lapshin V. “Assessment of the Term Structure of Risk-free Interest Rates Using Prices of Bonds and Credit Default Swaps”

17.02.2015 Stepanova A. “The Driving Power of Corporate Financial Architecture: Strategic Firm Performance in Emerging and Developed European Markets”


This paper focuses on the performance effect of corporate governance mechanisms for large nonfinancial companies operating in developed and emerging European markets. To avoid biased estimations and create a model with high forecasting power we apply original approach of corporate financial architecture to corporate performance modeling. On the sample of 250 largest public companies in Eastern and Western Europe we verified this integrated model of firm performance and showed that corporate governance is significant as a component of corporate financial architecture. We focus on the analysis of endogeneity of company’s ownership structure in European markets in 2000s.

25.11.2014 Grigoriev A. (Associate professor of Operations Research, Maastricht University) “Applications of Big Data Analytic in Finance”


We discuss new trends and needs in Data Analytic applied to the problems in general and corporate finance. In particular, we consider classification, clustering and ranking problems on Big Data, providing insights on complexity of the problems and algorithmic tools to tackle them. We also briefly address Big Data forecasting techniques and Big Data simulation tools with potential applications in corporate finance.

19.11.2014 Dr. J.H. (Henk) von Eije (Associate Professor Faculty of Economics and Business, Groningen) “Does the Information Content of Payout Initiations and Omissions Influence Firm Risk?”


We study the influence on firm risks of NASDAQ and NYSE firm payout initiations and omissions. These payout events can be interpreted as managerial signals of firm financial life-cycle maturation resulting in concomitant changes in firm risks. We remove confounding payout types and we match on the propensity to initiate or omit informed by determinants of payout known to investors in advance. For pa y out even t and matched firms, we apply the difference-in-differences method to estimate the effect of the information content of actual initiations and omissions on firm risks. We find consistent significant declines in total, aggregate systematic, and idiosyncratic firm risks after cash dividend initiations and increases after dividend omissions, but only incidentally after share repurchase initiations and omissions.

02.10.2014 Karas A. (PhD, Assistant Professor, University of Utrecht) “A “de Soto Effect” in Industry? Evidence from the Russian Federation”


The strengthening of land rights has been proposed as a policy to reduce financial market frictions and promote private investment in low and middle income countries. But assessments of these potential effects have proven inconclusive. One reason may be that research has focused on actors that face difficulties accessing credit for reasons other than the security of land tenure. We explore the effect of greater tenure security in a setting in which non-land-related financial market frictions are apt to be mild – that is, among large, urban, industrial enterprises. Exploiting policy variation across Russian regions and firm-level survey data, we show that private land rights facilitate credit access and promote investment.


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