Jose M. Martin-Flores

Working Papers

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)

Institutional investors re-balance internal and external monitoring mechanisms. As heightened short-selling threats improve external discipline and alleviate the need for direct monitoring, monitoring-prone institutional investors reallocate their effort to other portfolio firms.
Selected presentations: Financial Markets and Corporate Governance Conference (2022)*, FMA Europe (2022), KU Leuven (2022), AEFIN Finance Forum (2022), Erasmus Corporate Governance Conference (2023), BOCA-ECGI Corporate Finance and Governance Conference (2024)

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

Work-in-progress

We study cyber incidents affecting U.S. banks and show that affected banks subsequently become more prudent risk-takers and suffer less negative stock returns than peers during the 2023 banking turmoil.
Selected presentations: 16th SAFE-NYU-ESCP Law and Finance Conference (2026), AEFIN Finance Forum (2026)

Main Publications

Other Peer-Reviewed Publications

External Governance and Capital Structure: Evidence from Media Coverage (2022), with A. Romec, Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad

Book Chapters

A Political Economy of the European Monetary Institutions and Reform Proposals (2017), in Financial Regulation in the EU: From Resilience to Growth, (pp. 9-42), Palgrave MacMillan.