Working Papers
Political Conflict and Corporate Policies: Evidence from the Basque Country, with F. Derrien, S. Hadjigavriel and A. Romec
We exploit the announcement by the Basque nationalist terrorist group ETA of the definitive cessation of its armed and extortion activities, and find that firms exposed to the extortion risk significantly increase their cash holdings and exhibit higher cash flow sensitivity of cash. They also reduce investment in fixed assets. These reactions are consistent with a shift away from strategic liquidity minimization under extortion risk.
HKU Jockey Club Enterprise Sustainability Global Research Institute Paper No. 2025/201
HEC Paris Research Paper No. FIN-2025-1600
Selected presentations: ESCP Business School (2025)*, Vrije Universiteit Amsterdam (2025)*, Universitat Pompeu Fabra (2026)*, CICF (2026)
Green Monetary Policy and Climate Transition Risk, with A. Garel, and A. Romec
We study the ECB’s announcement of concrete measures to decarbonize its corporate bond holdings and adjust collateral criteria. We find that ECB-eligible bonds issued by carbon-intensive firms decline in value after the announcement. We further show that European funds reduce their holdings of these bonds in the following months. The results suggest that green monetary policy can be a source of climate transition risk.
*Presented by a coauthor