Research

  

TIM EISERT             

Tim Eisert
Assistant Professor of Finance
Dept. of Business Economics, H14-28
Erasmus School of Economics, Erasmus University
Tel: (+31)0104081428
P.O. Box 1738, 3000 DR Rotterdam (NL)

Email: eisert@ese.eur.nl



Research Interests

I am currently an Assistant Professor of Finance at the Erasmus School of Economics (Erasmus University Rotterdam) and an Associate Member of ERIM. My research interests include financial intermediation, corporate finance, and corporate governance. My work is both theoretical and empirical and focuses on aspects of financial interconnectedness, financial crises and corporate governance of financial and non-financial firms.

Research grants for the project "
Whatever it takes: The Real Effects of Uncoventional Monetary Policy" 



Publications

The Review of Financial Studies, Volume 31, Issue 8, August 2018, Pages 2855–2896
(with Viral V. Acharya, Christian Eufinger, and Christian Hirsch)

Management Science (forthcoming)
(with Christian Eufinger
)

Book Chapter

"Finance and Investment: The European Case" edited by C. Mayer, S. Micossi, M. Onado, M. Pagano and A. Polo. Oxford: Oxford University Press, 2018
(with Viral V. Acharya, Christian Eufinger, and Christian Hirsch)

Working Papers


(with Viral V. Acharya, Katharina Bergant, Matteo Crosignani, and Fergal McCann)

We analyze the transmission of macroprudential policies aimed at limiting household leverage and preserving financial stability. Combining supervisory loan-level and house price data, we examine the effect of loan-to-income and loan-to-value limits on residential mortgages in Ireland on mortgage credit, house prices, and financial stability. We find that banks reallocate their mortgage credit toward high-income borrowers and areas with low house price appreciation. This reallocation slows down house prices in ``hot'' areas, but allows banks to maintain a stable risk exposure as they increase mortgage credit to historically risky borrowers, corporate credit to risky firms, and holdings of high-yield securities.


Whatever it takes: The Real Effects of Unconventional Monetary Policy (being revised for resubmission to the Review of Financial Studies)
(with Viral V. Acharya, Christian Eufinger, and Christian Hirsch)

 

Launched in Summer 2012, the European Central Bank (ECB)'s Outright Monetary Transactions (OMT) program indirectly recapitalized European banks through its positive impact on periphery sovereign bonds. However, the stability reestablished in the banking sector did not fully translate into economic growth. We document zombie lending by banks that remained undercapitalized even post-OMT. In turn, firms receiving loans used these funds not to undertake real economic activity such as employment and investment but to build up cash reserves. Creditworthy firms in industries with a high zombie firm prevalence suffered significantly from this credit misallocation, which further slowed down the economic recovery.


The Manager - Shareholder Agency Conflict: 
Do Banks Prefer Non-Alignment?
(with Christian Hirsch
)

This paper studies the link between the agency costs of equity and the agency costs of debt. Using a unique sample of the ownership structure of single and dual class firms as well as hand-collected data on loan contracts, we find that the agency cost of debt – proxied by various loan contracts terms - increases in the voting power of the largest outside shareholder, our primary measure of the agency cost of equity. We provide evidence that these results are consistent with debt holders being concerned about the high risk-shifting incentives of equity holders.


Exit as Governance Mechanism of Institutional Investors: 
Evidence from Dual-Class Firms

This paper presents evidence that exit threats are a powerful governance mechanism for institutional investors. Using a sample of U.S. dual class firms where insiders control a majority of the voting rights, but have only a small fraction of cash flow rights, I show that after an exogenous increase in stock liquidity (decimalization), the presence of an institutional investor leads to a significant increase in firm value. This value increase results from a reduction of controlling insiders' private benefits of control. Managers conduct more shareholder value enhancing capital investments and use corporate cash holdings more shareholder value oriented. Taken together my results show that exit threats a powerful governance mechanism for institutional investors.


Work in Progress


Equity Based Pay of Non-Executive Employees and Bank Risk in Times of Crises
(with Nora Bock and Christian Hirsch)