Essays in Empirical Financial Economics

• Main Author: Barrot, Jean-Noël
• Language: English
• Published: HEC 2012
• Subjects: [SHS:GESTION] Humanities and Social Sciences/Business administration; [SHS:GESTION] Sciences de l'Homme et Société/Gestion et management; Horizon; innovation; patents; venture capital; Private equity; learning; individual investor behavior; Household finance; trade credit; crisis
• Online Access: http://pastel.archives-ouvertes.fr/pastel-00829542; http://pastel.archives-ouvertes.fr/docs/00/82/95/42/PDF/Barrot.pdf

This dissertation is made of four distinct chapters. In the first chapter, I consider an exogenous restriction on the ability of French trucking firms to extend payment terms to their clients. I find that they provide trade credit at the cost of lower investment, lower return on assets, and higher default risk. In the second chapter, I show that private equity funds with a longer horizon select younger companies at an earlier stage of their development. Companies which receive funding from funds with a longer horizon increase their patent stock significantly more than companies which receive funding from investors with a shorter horizon. The third chapter presents a joint work with Ron Kaniel and David Sraer. We use detailed brokerage account data to provide a quantitative exploration of the behavior of retail investors during the financial crisis of 2008. We show that investors who appear more sophisticated on these dimensions in the pre-crisis period were, in the post-crisis period, less likely to flee to safety, more likely to engage in liquidity provisions and to earn higher returns. In the fourth chapter, I develop the idea that households have an imprecise knowledge of their portfolio's exposure to systematic risk and that this leads them to make investment mistakes. This idea is tested in the context of the decision to actively trade rather than passively invest in the stock market