About
I am an Assistant Professor in the School of Finance @ University of St.Gallen and a faculty member of the Swiss Finance Institute. My research interests include Corporate Finance, Banking, and Macroeconomics with Financial Frictions.
I hold a Ph.D. from the Toulouse School of Economics. Before joining St. Gallen, I was a postdoctoral researcher in the Finance Group at the University of Bonn and a part-time postdoc at the University of Zurich.
Currently, I co-organize the St.Gallen Workshop in Financial Economics with Can Gao.
For more information on my academic background, please refer to my curriculum vitae. You can reach me at konrad.adler at unisg.ch.
Work in Progress
Anti-Competitive Effects of Loan Covenants, with Yuliyan Mitkov
Papers
We study how banks change their loan pricing when a firm’s shareholders include more passive index fund investors. We find that higher passive ownership is associated with higher loan spreads, likely due to reduced shareholder oversight and increased monitoring costs for banks. The effect is strongest in well-governed and opaque firms, and traditional risk measures do not fully explain the spread increases.
We use abnormal stock returns around UN climate conferences to measure firms’ exposure to climate risk. Our measure is available for more than 36,000 global firms, yields intuitive sector rankings, and adds additional information relative to existing measures. Green firms tend to have lower current and future CO2 emissions, are more likely to file green patents, and tend to be located in countries with cleaner energy profiles.
Our measure is available for download on the project's website
Financial Covenants, Firm Financing, and Investment, R&R Review of Financial Studies (second round)
I study how financial covenants in loan contracts influence firm investment using a structural model. I find that covenants raise aggregate investment by 4.7% compared to a no-covenant scenario, though firms incur costs when trying to avoid violations. The model shows that covenants affect how shocks impact financing and that earnings-based covenants boost investment in industries with low asset pledgeability but offer no benefit when assets are easily pledged.
When Does Overlapping Ownership Soften Competition? The Role of Agency Frictions and Repeated Interaction, with Yuliyan Mitkov
We study the effect of overlapping ownership in a setting where managers may divert funds to pursue projects misaligned with shareholder interests. We show that greater overlapping ownership can reduce or, in some cases, increase product market competition, depending on tacit collusion under separate ownership and managerial entrenchment. Empirical evidence on competition and forced CEO turnover aligns with our model’s predictions.
Summary by ECONOMY MATTERS, Atlanta Fed Working Paper Series 2022-14,
We study the trade-off firms face when exporting to countries with different tastes and volatile demand. In our model, firms balance serving the largest consumer groups against exposure to group-specific risk. We develop an empirical strategy to estimate consumer tastes and the key parameters behind this portfolio choice. Applying the framework to the rise of China in the global movie market, we find heterogeneous welfare effects across countries and a modest average consumer welfare loss as firms favor products that provide insurance value.
Tariffs, Corporate Cash Holdings, and Innovation , with Jaebin Ahn and Mai Chi Dao, R&R Journal of Corporate Finance
IMF Working Paper No. 2019/017
We study how trade liberalization affects the financial and innovation decisions of large firms in G7 countries. We find that firms increase cash holdings when trading partners lower import tariffs, with no similar effect from cuts in their own tariffs. This rise in cash buffers precedes tariff cuts and is linked to higher subsequent R&D spending and patenting, consistent with a model where better export market access boosts expected innovation returns.
Policy Papers
BIS Working Paper No 909, December 2020
Using a new database on policy intervention after banking crises, we assess the effectiveness of different intervention tools.
Review of International Economics, vol. 25(5), pages 1078-1104, November 2017
We document the uncertainty of behavioral equilibrium exchange rates (BEERs) estimates depending on the variables included in the estimation.
Dormant
Are Markets Moved by Bad News? Evidence from International Aviation Accidents, with Steve Lawford
We investigate the impact of aviation accidents on stock index returns. We find that the strong and significant negative impact of accidents on NYSE index returns found by Kaplanski and Levy (2010) becomes much weaker when we control for just a few extreme accidents.
