Abstract:
The presenter is Manthos Delis, Professor of Financial Economics and Banking at Montpellier Business School.
Professor Delis will present the paper: "Economic preferences over risk-taking and corporate finance".
We contend that economic preferences over risk-taking in different subnational regions worldwide affect fundamental aspects of firms’ corporate financing, namely financing costs and capital structure.
We study this hypothesis, by hand-matching firms’ regions worldwide with the corresponding regional economic risk-taking preferences.
Our baseline results show that credit and bond pricing increase with higher risk-taking preferences, where as such preferences yield lower ratios of book leverage and short-term debt.
We backup our baseline results with an instrumental variables approach, which is based on the premise that high-yield agricultural societies in the pre-industrial era exhibit low risk-taking preferences.