Reseach Interests

corporate finance, ownership, innovation, sustainable finance

Working Papers

Investors in Green Bonds (draft available upon request)

(with M. Groen-Xu)

Using data on the universe of holdings in bonds traded in Norway, we provide insights into the investors of non-government Green bonds. These recently popular bonds aim to finance climate-friendly projects. Although Green bonds still constitute a small fraction of investor portfolios, their investors are distinct from other bond investors. Investors in Green bonds are smaller and more likely to be individuals. They make more, but smaller trades, hold riskier assets, and invest into more issuers with environmental ratings. However, their investments have a lower average environmental rating and are less likely to be in firms specialized in renewables. These results are consistent with a consequentialist rather than a warm-glow motive of investment.

Strategic overbidding in procurement auctions? (Latest version)

I find evidence that cash constrained firms compromise long-term profitability to improve their short-term liquidity. I document that constrained firms overbid in government procurement when market conditions deteriorate. New contracts improve short-term cash flows, but result in lower long-term profits. I provide an unbiased estimate of the drop in performance of winners following an award by measuring performance relative to companies which placed second in the auction. I show that financial constraints predict aggressive bidding, that firms overbid less in auctions that require larger deposits, and that winning long-term contracts causes a short-term increase and subsequent decline in profitability. My results offer a non-behavioural explanation for the ``winner's curse''.

The role of local banking in timing of investment. (Latest version)

(with K. Kalisiak)

We show that access to local financing affects firms' investment timing decisions. Firms in areas with better-developed local banking sectors respond earlier to future improvement in investment opportunities. They start new investments at the time the improvement is announced. Other firms catch up only after the improvement and associated cash flows are realized. We exploit variation caused by infrastructure development in the oil industry that exogenously affects firms in only one region and use nearby regions as control. The event creates a gap between announcement and realization dates in which credit demand increases, but credit supply stays unchanged. This specific structure highlights the role of financial constraints and eliminates the problem of reverse causality.

Work in progress

The impact of uncertainty on labour reallocation and firm employment decisions.

(with S. Wang)

Restructuring outcomes under common debt ownership.

(with M. Groen-Xu)

Employment within VC portfolios.

(with F. Core and S. Wang)

Gender differences on personal finance of entrepreneurs.

(with R. Almeida and M. Groen-Xu)

Permanent working papers

Firm behaviour after R&D breakthroughs.

(draft available upon request)

I examine firm behaviour after major R&D breakthroughs. I use the example of pharmaceutical companies that carry out last-stage clinical trials for new oncology drugs. "Success" is defined as Food and Drug Administration approval to market new drugs. I argue that this alternative innovation measure is superior to commonly used patents and citations. Companies that obtain approval increase capital expenditure. However, there is no change to their research and development expenses, cash holdings, or short-term investments. This supports the hypothesis that innovative firms follow long-term strategies, and finalizing drug development, even though infrequent, does not radically change their behaviour.