Research Overview
My current research interests center around macroeconomic aspects of uncertainty. I am interested in measuring macroeconomic uncertainty and analysing its effects on the real economy. I am also more and more interested in corporate finance and different aspects of decision making within companies. Below you will find projects I have worked on:
Publications:
1. Smietanka, P, Radziwill, A, (2008). EU’s Eastern Neighbours: Institutional Harmonization and Potential Growth Bonus. CASE Network Studies & Analyses No. 386/09.
This paper provides the quantitative estimate of the potential growth bonus for CIS countries, and in particular EU’s Easter Neighbours, that can be a result of deeper institutional harmonisation with the EU. Econometric investigation involving instrumental variable, simultaneous equation and dynamic panel techniques documents the strong positive link between growth performance and reforms, as well as between reforms and European integration. The paper derives the range of possible values of growth bonus from the deepened neighbourhood cooperation between 1 and 3.8 with the median at 1.8 percentage points. The least growth bonus is expected through basic liberalization reforms, while countries with a considerable institutional gap are likely to gain the most.
Work in Progress:
2. Smietanka, P. (2016). Retain, Pay out or Buy Back? Effects of Macroeconomic Uncertainty on Cash Distributions of UK Companies
We concentrate on recent surge in corporate cash holdings and analyse if it could be caused by changes in uncertainty level. Our analysis shows that, ceteris paribus, an increase in the degree of macroeconomic uncertainty leads to an increase in corporate cash holdings, particularly among companies that are at risk of being financially constrained. We also show that in uncertain times the amount of dividend payments and stock buybacks decrease on average. Our results emphasize the hedging role of cash and provide evidence that firms adjust payout policy to obtain additional cash when uncertainty is looming.
3. Smietanka, P. (2015). Why Do Firms Invest So Little? Effects of Macroeconomic Uncertainty on Corporate Investment of UK Companies
In this research we found that a surge in macroeconomic uncertainty leads to a fall in corporate investments even after taking account of cyclical changes and a range of other factors. Moreover, we show that financially constrained companies are more affected by changes in uncertainty, which indicates that asymmetry of information is an important channel in the uncertainty-investment relationship.
4. Smietanka, P. (2014). Measuring Uncertainty from Professional Forecasts: A Signal Extraction Approach
This paper explores a method of obtaining information about macroeconomic uncertainty from professional forecasts using a signal extraction approach. Uncertainty increases whenever professional forecasters have limited possibilities to draw on their expertise or private knowledge which they use to forecast future economic growth. The new proxy of macroeconomic uncertainty is compared to existing proxies.