CEF.UP – ECO Seminar

Friday – December 20^th 2024, at 13:00h | Room 305

Monetary Policy, Information and Country Risk Shocks in the Euro Area

Giovanni Ricco – University of Warwick (England, United Kingdom) and CREST – École Polytechnique (France)

Abstract:

“This study examines high-frequency market responses to ECB policy announcements, providing instrumental variables to identify four types of monetary policy shocks — conventional policy, forward guidance, quantitative easing/tightening, and asymmetric country risk — along with information shocks. Our findings show that non-linear information effects, especially prominent during episodes of acute market stress in euro area crises, are key to resolving puzzles in macroeconomic and financial variable responses reported in studies using high-frequency European data. The IVs obtained by controlling for these effects yield, in a VAR model, dynamic responses to monetary tightenings with contractionary impacts on output and prices.”

CEF.UP – WiP Seminar

Tuesday – December 17^th, 2024 at 13:00h (1 pm) | Room 305

Nurturing the sustainable and circular economy: An integrated ecosystems model

Cristina Fernandes – FEP – School of Economics and Management – University of Porto, CEF.UP and NECE

Abstract:

“Environmental sustainability and the circular economy are receiving regular mention in literature as paradigms capable of addressing major social challenges. However, understanding how best to assist ecosystem transition toward a sustainable and circular economy ecosystem and which strategic variables are effective levers in nurturing its adoption, remaining elusive. This research investigates factors contributing to a successful transition towards green innovations. The study employed a four-study research designto achieve a holistic understanding across the multiple levels of the ecosystem. Firstly, a systematic literature review was conducted to develop a conceptual model for identifying variables to nurture the transition (study 1) across the interrelated layers of the ecosystem. Secondly, a micro-level analysis was undertaken using ANCOVA to examine the strategic orientations (market and product) that impacts green innovations of companies (study 2). Thirdly, a meso-level analysis was conducted, applying logistics regression to identify the moderating effect of industry type on the relationship between strategic orientations and green innovations (study 3). Finally, the study evaluated the impact of environmental assets on economic growth and the mediating role of Industry 4.0 on this relationship, using multiple regression panel data models. The development and empirical testing of the multi-level model contributes to this emerging field, to better reflect the integrated nature of ecosystems and identify advantageous strategies for nurturing ecosystem transition towards increased sustainable and the circular economy.”

CEF.UP – FIN Seminar

Thursday – December 12^th, 2024 at 13:00h (1:00 p.m.) | Room 305

Matching for Risk-Taking: Overconfident Bankers and Government-Protected Banks

Andreas Haufler – Ludwig-Maximilians University – Munich (Germany)

Abstract:

“We set up a simple theoretical model in which banks with varying degrees of government support are matched with CEOs that have different degrees of over-
confidence. The channel through which the matching occurs is the share of bonus payments offered by the bank in its profit-maximizing contract. This yields a sequence of hypotheses: banks with more government support incentivize their CEOs more and this disproportionately attracts overconfident CEOs. In equilibrium this in turn leads to an assortative matching between overconfident managers and banks with a larger bailout probability. We then test the hypotheses derived from this model empirically. Our regression results confirm the hypotheses from our theoretical model for normal years, but not during crises and periods of enhanced regulation. In these times, overconfident CEOs do not behave differently from non-overconfident CEOs.”

CEF.UP – ECO Seminar

Friday – December 6^th 2024, at 13:00h | Room 305

Flight to Safety and New Keynesian Demand Recessions

Sebastian Merkel –  School of Economics, University of Bristol (England, United Kingdom)

Abstract:

“This paper builds a tractable New Keynesian model with idiosyncratic risk, incomplete markets, and nominal safe assets to study the transmission of uncertainty shocks through investors’ portfolio decisions and how monetary-fiscal policy can stabilize fluctuations in the demand for safe assets. A sudden increase in uncertainty triggers a flight to safety: investors reallocate portfolios from productive assets to safe assets. When prices are sticky, the real value of nominal safe assets cannot flexibly adjust. Instead, the flight to safety gives rise to aggregate demand recessions and overshooting in capital price adjustments. Conventional monetary policy that operates through interest rate changes alone has limited power in influencing household portfolios. Instead, fiscal policy plays a crucial role in price stabilization and optimal policy.”

CEF.UP – WiP Seminar

Tuesday – December 3^rd, 2024 at 13:00h (1 pm) | Room 305

Agglomeration in an urban corridor

José Gaspar – FEP – School of Economics and Management, University of Porto and Cef.Up

Abstract:

We study agglomeration within a corridor characterized by a continuous path connecting a finite number of places where cities may locate. As economic integration changes, a corridor may undergo successive bifurcations whereby the number of cities increases (decreases) two by two in a way that preserves the bilateral symmetry of places around the central place. We focus on the bifurcation from the state of full agglomeration in the central place occurring at a critical level of economic integration, called the sustain point. For a particular model, full agglomeration becomes unstable below the sustain point and two identical cities may emerge stably with the same distance to the central city. The existence and uniqueness of both the sustain point and the optimal distance to the central city are determined analytically. We find that cities can only emerge optimally at places that are sufficiently far away from the central place, thereby generating a polycentric structure. As integration increases, a preexisting state of twin cities may engender a central city, which grows in size and may eventually develop further into a core city. Finally, we draw a comparison of our model with its discrete–space analogue and discuss the impact of local dispersion forces (e.g. congestion costs) on agglomeration.

CEF.UP – FIN Seminar/Webinar

Thursday – November 28^th, 2024 at 1:00 p.m. | Room 305| Online

“Poison Bonds“

Rex Wang Renjie  – VU Amsterdam University (Netherlands), Tinbergen Institute (Netherlands)

Abstract:

“This paper documents the rise of “poison bonds”—corporate bonds that allow bondholders to demand immediate repayment in change-of-control events. The share of poison bonds among new issues has grown substantially in recent years, from below 20% in the 1990s to over 60% since the mid-2000s, predominantly driven by investment-grade issues. We show that a key factor behind this rise is shareholders’ aversion to poison pills, leading firms to issue poison bonds as an alternative. Moreover, our analysis suggests that this practice can entrench incumbent managers and destroy shareholder value. Holding a portfolio of firms that remove poison pills but promptly issue poison bonds generates negative abnormal returns of -7.3% per year. Our findings have important implications for the agency theory of debt: (i) more debt may not discipline the management; and (ii) even without financial distress, managerial entrenchment can lead to agency conflicts between shareholders and creditors.”

CEF.UP – FIN Seminar/Webinar

Thursday – October 31^th, 2024 at 13:00h | Room 305| Online

Securities Losses, Interbank Markets, and Monetary Policy – Transmission: Evidence from the Eurozone

Mariassunta Giannetti  – Stockholm School of Economics (Sweden), European Central Bank (European Union), Center for Economic Policy Research (U.K.)

CEF.UP – FIN Seminar/Webinar

Thursday – October 24^th, 2024 at 1:00 p.m. | Room 305| Online

The VAT Trap: How Consumption Tax Hikes Make Firms Pay Out More and Invest Less

Martin Jacob  – IESE Business School, University of Navarra (Spain)

Abstract:

“Using comprehensive firm-level data for 54 countries, we document that, contrary to standard economic theory, value-added tax (VAT) increases cause firms to permanently increase their cash payout and to reduce their investment. We reconcile these surprising findings using an OLG model where agents have finite lives. We show that VAT increases can come with unintended negative consequences on capital accumulation. Furthermore, the negative effects of VAT on capital accumulation critically hinge on the country’s culture. The more the country’s attitudes are oriented toward the consumption of current generations, the greater the negative consequences of VAT on capital accumulation and growth.”

CEF.UP – ECO Seminar/Webinar

Friday – October 11^th, 2025, at 1:00 p.m. | Room 305| Online

“Not Incentivized Yet Efficient: Working From Home in the Public Sector”

Tom Kirchmaier –  LSE, London School of Economics (England, United Kingdom)

Abstract:

“This paper studies whether working from home (WFH) affects workers’ performance in public sector jobs. Studying public sector initiatives allows us to establish baseline estimates on the impact of WFH net of incentives. Exploiting novel administrative data and plausibly exogenous variation in work location, we find that WFH increases productivity by 12%. These productivity gains are primarily driven by reduced distractions. They are not explained by differences in quality, shift length, or task allocation. The productivity gains more than double when tasks are assigned by the supervisor.”

CEF.UP – FIN Seminar/Webinar

Thursday – October 3^rd, 2024 at 1:00 p.m. | Room 305| Online

Sustainable Retail Investing: Motivations, Portfolio Consequences and the Role of ESG Ratings

Amir Amel-Zadeh– Saïd Business School, Oxford University (England, United Kingdom)

Abstract:

“This study examines whether, how and to what effect wealthy retail investors use sustainability information in their investment decisions. Using a proprietary dataset of investment holdings of wealthy European retail investors, we exploit a quasi- exogenous shock to the coverage of sustainability ratings available to investors and document a plausibly causal effect of these ratings on investment allocations. We find the preference for assets with high sustainability ratings to stem from non-pecuniary motives and that sustainability is not perceived as a luxury good. We further find that “ESG-minded” investors hold significantly concentrated and under-diversified portfolios, over-allocate to home stocks and hold on longer to unrealised losses than “ESG-agnostic” investors. The former seem to achieve their objectives of investing in more sustainable firms that have fewer social and governance incidents but also overweight carbon-intensive sectors.”

CEF.UP – ECO Seminar/Webinar

Tuesday – September 24^th, 2024, at 1:00 p.m. | Room 305| Online

“Consumption, Wealth, and Income Inequality: A Tale of Tails“

Christian Hellwig –  Toulouse School of Economics (France), CEPR – Center for Economic Policy Research (E.U.)

Abstract:

“We provide evidence that the distributions of consumption, labor income, wealth, and capital income exhibit asymptotic power-law behavior with a strict ranking of upper tail inequality, in that order, from the least to the most unequal. We show analytically and quantitatively that the canonical heterogeneous-agent model cannot replicate the proper ranking and magnitudes of these four tails simultaneously. Mechanisms addressing the wealth concentration puzzle in these models through return heterogeneity lead to a mirror consumption concentration puzzle. We match the cross-sectional data on these four Pareto tails by positing a combination of non-homothetic, wealth-dependent preferences and scale-dependent returns to capital. We underscore the importance of these results by showing that all four dimensions of top inequality jointly determine the long-run elasticity that governs the revenue-maximizing capital tax rate.”

CEF.UP – MaR Seminar/Webinar

Monday – July 8^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Fifteen years of customer engagement research: a bibliometric and network analysis“

Linda D. Hollebeek – Sunway University (Malaysia)

Abstract:

“Purpose – In recent years, customer engagement (CE) with brands, which has been shown to yield enhanced firm sales, competitive advantage and stock returns, has risen to occupy a prominent position in brand management research and practice. Correspondingly, scholars have explored CE’s conceptualization, operationalization and its nomological networks as informed by different theoretical perspectives. However, in spite of important advances, the knowledge structure of the overall corpus of CE research remains tenuous. Therefore, the purpose of this paper is to explore the intellectual structure of CE research.

CEF.UP – MaR Seminar/Webinar

Monday – June 17^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Developing and Publishing Systematic Literature Reviews in Premier Business Outlets”

Michael Christofi – School of Economics and Management – Cyprus University of Technology (Cyprus)

The seminar will briefly explain what a systematic literature review is, as well as the various categories of systematic review articles. Continuing, it will mainly focus on the basics steps for developing such type of articles, with practical examples of systematic review papers published in premier business outlets. Finally, the seminar will provide tips and recommendations when it comes to submit such manuscripts for publication in premier business journals, by analysing what editors and reviewers see when it comes to review such papers.

CEF.UP – WiP Seminar/Webinar

Friday – June 7^th, 2024 at 13:00h (1 pm) | Room 305 | Online

Fiscal Policy Dispersion in the Euro Area – a new quantitative index

Daniel Loureiro – FEP – School of Economics and Management – University of Porto and Cef.Up

Abstract:

“We developed a new Fiscal Dispersion Index to assess fiscal policy coordination in the Euro Area and complement the existent literature. We found greater fiscal policy dispersion around the years of economic crisis, signaling a deterioration of coordination. Besides, we highlighted Portugal as one the most problematic countries, continuously deviating from the average policies. However, the direction of the Portuguese deviation is not constant over time. It shifted from looser policies between 2000 and 2007 to tighter policies from 2016 to 2021. Moreover, we also found that Germany and Netherlands pursued tighter policies than the average, particularly when facing common shocks. Thus, we recommend that additional measures should be approved to improve coordination during the more challenging times, preventing insufficient expansionary policies. Failing to do so will likely hamper the credibility of the European framework and institutions.”

CEF.UP – FIN Seminar/Webinar

Thursday – June 6^th, 2024 at 1:00 p.m. | Room 305| Online

Manipulating Growth: The Unintended Consequences of Antitrust Policies on Small Firms

Gustavo Grullon– Rice University

Abstract:

“Recent evidence indicates that acquirers avoid antitrust regulatory scrutiny by targeting firms whose size fall below exemption thresholds. We find evidence that potential targets near these thresholds intentionally reduce their size, which makes them more attractive targets for stealth acquisitions. They achieve this by limiting asset growth and increasing their payouts when they have excess cash. Our results indicate that this effect is especially pronounced for firms with liquidity needs and is driven, in part, by exit strategy motives. Overall, our results reveal that antitrust exemptions can create perverse incentives that can offset public policies aimed at promoting the growth of small firms.”

CEF.UP – MaR Seminar/Webinar

Tuesday – June 4^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Peer pressure and manager pressure in organisations”

Tom Kirchmaier – LSE – London School of Economics and Political Science (England, United Kingdom)

Abstract:

“We study the interaction between horizontal (peer) and vertical (manager) social factors in workers’ motivation. In our setting, individuals work using open-plan desks. Using a natural experiment, we identify a sharp increase in workers’ productivity following the occupation of adjacent desks. We link this peer pressure effect to two key aspects of the worker-manager relation. First, we find stronger peer pressure when managers monitor workers less. Second, we find stronger peer pressure among workers performance-evaluated by the same manager. In a set of counterfactual exercises, we illustrate how organisations could take advantage of these interdependencies to increase worker productivity. ”

CEF.UP – ECO Seminar/Webinar

Tuesday – June 4^th, 2024, at 1:00 p.m. | Room 305| Online

“Uncertainty shocks in monetary unions: The case for a nominal anchor”

Benjamin Born  –  Frankfurt School of Finance & Management (Germany)

Abstract:

“Uncertainty shocks contract economic activity and arguably more so if monetary policy cannot cushion their effect. Yet, as we employ a Bayesian VAR model to identify and contrast the effects of country-specific and common uncertainty shocks on the countries in the euro area, we find that countryspecific shocks have milder effects—even though they are not accommodated by monetary policy. We rationalize this result in a two-country model of a monetary union and find that union membership provides a nominal anchor for the price level, thereby dampening the “markup channel” through which the adverse effects of uncertainty shocks unfold.”

CEF.UP – MaR Seminar

Tuesday – May 28^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631

MEET THE EDITORS

This seminar is an opportunity to meet and talk with the editors of selected journals, all of them affiliated with FEP – School of Economics and Management of the University of Porto.

Editors will answer questions about the journals, discuss the submission and review processes, and provide attendees with advice on how to increase the likelihood of publication.

• João Oliveira (Qualitative Research in Accounting & Management)
• Luísa Pinto (Journal of Global Mobility)
• Amélia Brandão (International Journal of Consumer Studies)
• Dalila Fontes (Journal of Combinatorial Optimization)

Moderator: Teresa Fernandes (Services Marketing Quarterly)

CEF.UP – ECO Seminar/Webinar

Tuesday – May 28^th, 2024, at 1:00 p.m. | Room 305| Online

“Optimal Redistribution with Government Debt“ (with Kirill Shaknov)

Facundo Piguillem  –  Einaudi Institute for Economics and Finance (Italy)

Abstract:

“We analyze the tight relationship between government debt, redistribution and capital taxation in Overlapping Generations Economies (OLG). We do so in an heterogeneous agents economy where the government collects capital and progressive labor taxes to pay government spending, debt and redistribute income. In this environment, the Ramsey planner uses all taxes, even in the long run. We show that rising inequality leads not only to more progressivity, but also to more government debt and capital taxation. The necessary increase in debt to achieve the optimal redistribution policy can be substantial. We explore how limits to government’s borrowing choices severely restrict its ability to redistribute income. We calibrate the model to the U.S. in the 2000-10 decade and estimate the optimal response to the observed change in inequality. We find the optimal level of debt should approximately doubled.”

CEF.UP – WiP Seminar/Webinar

Friday – May 24^th, 2024 at 13:00h (1 pm) | Room 305 | Online

The Political Economy of Central Bank Digital Currencies and Monetary Policy

Francisco Nunes Pereira – FEP – School of Economics and Management, University of Porto and Cef.Up

Abstract:

This paper scrutinizes the monetary policy case in favor of Central Bank Digital Currencies (CBDCs) from a political economy angle. The proponents of CBDCs argue that their introduction would streamline the monetary policy transmission mechanism, enable novel policy interventions, and enhance data collection capabilities, ultimately leading to improved central bank performance. However, the arrangements of monetary institutions result in central banks entangled in incentive and epistemic issues, which limit their performance. CBDCs not only fail to mitigate these problems but indeed exacerbate them. We argue that the central bank becomes more vulnerable to political interference and rent-seeking activities once a CBDC is created. Moreover, the enhanced ability to monitor economic activities may lead central banks to succumb to the ‘pretense of knowledge syndrome,’ which compounds the incentives for discretionary interventions. We conclude that there is a means-ends inconsistency in the monetary policy case for CBDCs.

CEF.UP – ECO/FIN Seminar/Webinar

Thursday – May 23^rd, 2024 at 1:00 p.m. | Room 305| Online

Bank Specialization in Lending to New Firms

Diana Bonfim– Banco de Portugal and European Central Bank

Abstract:

“We formulate a novel dimension of bank-lending specialization—specialization in lending to new firms—and investigate its impact on the creation, credit access, and survival of new businesses. We exploit a Portuguese reform that drastically reduced the red tape of starting a new firm and that was rolled out in a staggered manner across municipalities. We show that while reducing regulatory barriers stimulates business creation, this effect depends crucially on the pre-reform local presence of bank branches specialized in lending to new firms. A greater presence of such branches is associated with improved credit access and higher leverage of new local businesses. Moreover, new firms that obtain loans from specialized branches exhibit an up to 12 percent higher survival rate.”

CEF.UP – MaR Seminar/Webinar

Tuesday – May 21^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

” Understanding the complexity of ethics, moral blindness and designing an ethics experience that inspires ethical behaviour“

Ana Roque – FEP – School of Economics and Management, University of Porto

Abstract:

“Organisations positioning regarding ethics is still, in general terms, reactive and compliance oriented. When we look at companies reports, we see that very few include people from the ethics office in core management committees, such as marketing, product development, or innovation. However, ethics is nowadays fundamental from the perspective of internal culture and climate, organizational development, reputation, and is a necessary condition for a true and consistent path towards sustainable development.There are many obstacles preventing ethics from being present in the daily lives of organizations, which would be important. The name itself can be intimidating; some people might think we’re talking about morality, but ethics and morality are not the same thing. There are many myths, starting with the idea that being ethical is easy, that bad practices are essentially a matter of a few bad apples, and that an ethics program can be unilaterally created, almost just a code (as we see in many organizations), and that this has power over culture.”

CEF.UP – FIN Seminar/Webinar

Thursday – May 16^th, 2024 at 1:00 p.m. | Room 305| Online

“Invest as for Your Kids: Performance and Implications of Children’s Investment Accounts on Portfolios in Adulthood“

Jarkko Peltomaki– Stockholm University (Sweden)

Abstract:

“We explore the performance of custodial investment accounts for children and their implications on portfolios in adulthood. We find that children’s accounts, often resembling passive investment strategies, yield annual returns three times higher with lower volatility compared to adults’ accounts. Parental risk-taking behavior does not significantly differ for kids of different genders during early childhood. However, a notable shift occurs once boys enter their teenage years, as their accounts begin to mirror the investment patterns typically associated with adult men. Consequently, during this phase, boys’ accounts tend to underperform relative to those of girls. Furthermore, we document that individuals whose investment accounts were initiated by their parents during childhood consistently demonstrate superior performance as young adults compared to peers who opened accounts themselves. Moreover, they exhibit a narrowed gap in risk-taking behavior observed between men and women. These findings emphasize the importance of passive investment strategies and highlight the influential role parental interventions play in shaping investment attitudes.”

CEF.UP – SPECIAL Seminar/Webinar

Wednesday – May 15^th, 2024 at 1:00 p.m. | Room 305| Online

“Paying attention: brain contraints on attention, learning and decision making” 

Genela Morris  – Technion – Israel Institute of Technology (Israel)

Abstract:

“Everyday decision-making demands the ability to distill complex and multifaceted information into actionable responses. These responses are typically geared toward favorable outcomes, rooted in reinforcement learning principles. While decades of research have unraveled the neural substrates of reinforcement learning, the process is inherently twofold. Effective decision-making hinges not only on learning the best actions in a given context but also on discerning relevant attributes of the environment to inform those decisions. In this seminar, I propose a theoretical framework that distinguishes between the learning of value and attention and elucidates their interplay. Drawing on experimental evidence from our rodent and non-human primate studies, I will share our suggestions on the distinct and complementary roles of striatal dopamine and acetylcholine in orchestrating this intricate process. I conclude by urging scholars of economic behavior and decision making to consider the brain mechanisms underlying attention, learning, and decision-making”

CEF.UP – MaR Seminar/Webinar

Tuesday – April 23^rd , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Driving Supply Chain Sustainability: The Crucial Role of Optimization in Achieving Sustainable Practices”

Ana Paula Póvoa – Instituto Superior Técnico, Universidade de Lisboa

Abstract:

“In today’s rapidly evolving scenery, the significance of sustainability has gained immense recognition, urging supply chains to embark on the journey towards building sustainable practices. Sustainable supply chains can be best described as complex networks of entities that oversee the management of products, encompassing suppliers, customers, and returns, while considering social, environmental, and economic objectives concurrently. However, the complexity of these systems poses a challenge in simultaneously addressing environmental and social goals alongside the traditional objective of profitability. To deal with these challenges, the development of decision-supporting tools for supply chain decision-makers is crucial. This talk focuses on the components of such tools, employing a systemic approach. Highlights the utilization of optimization-based models that effectively capture sustainability goals, considering the unique characteristics of supply chains. These tools enable the design and planning of sustainable supply chains, providing a solution that strikes a balance among economic, environmental, and social objectives. Furthermore, this talk identifies and discusses key perspectives and challenges associated with sustainable supply chains, which serve as catalysts for further research in the field. By delving into these aspects, we can foster a deeper understanding of the subject and inspire innovative approaches towards achieving sustainability within supply chains.”

CEF.UP – WiP Seminar/Webinar

Monday – April 22^nd, 2024 at 1:00 p.m. | Room 305 | Online

“Keeping it in the Family: Student to Degree Match”

Pedro Luís Silva – FEP, Centre for Research in Higher Education Policies (CIPES) and Institute of Labour Economics (IZA) (joint work with Richard Murphy)

Abstract:

“This paper examines systematic inequalities in the match between students and the university degree they apply to, and enroll in. Using linked administrative data on the population of Portuguese applicants we create a transparent and continuous measure of student-to-degree match employing minimal assumptions. We find that students who are first in the family to attend post-secondary education consistently match to lower quality degrees across the entire achievement distribution. In contrast, only the highest achieving female students relatively undermatch. These gaps are larger at the application stage. We explore the role of student preferences and the consequences for intergenerational mobility.”

CEF.UP – FIN Seminar/Webinar

Thursday – April 18^th, 2024 at 1:00 p.m. | Room 305| Online

“The Information Content of Central Bank Disclosures: Firm-level Evidence from Eurosystem Collateral Haircuts”

Aytekin Ertan – London Business School (England, United Kingdom)

Abstract:

“This paper explores firm-specific central bank disclosures, specifically the Eurosystem’s collateral haircuts on nonfinancial corporate bonds. Our findings reveal that updates to collateral haircuts by central banks are significant: they not only trigger reactions in debt capital markets, but also predict future changes in issuers’s credit ratings and overall financial health. Our analysis further highlights that impact of these haircut revisions is more pronounced among riskier issuers, firms with bank debt, and in periods of greater uncertainty. Overall, our study underscores the relevance of firm-specific central bank information and provides new insights into the role of collateral haircut policies in the financial landscape.”

CEF.UP – FIN Seminar/Webinar

Thursday – April 11^th, 2024 at 1:00 p.m. | Room 305| Online

Suppliers, Investors, and Equity Market Liberalizations

Martin Strieborny  – Adam Smith Business School – University of Glasgow (Scotland, United Kingdom)

Abstract:

“Allowing foreign investors to acquire equity stakes in domestic firms stimulates the real economy by promoting frictionless relationships between buyers and suppliers of intermediate goods. I combine insights from research on financial liberalization and relationships specific investment to derive this hypothesis and then use a difference-in-difference empirical framework to test it. Results from panel-data and event-study estimations confirm that equity market liberalizations boost output growth particularly in suppliers-dependent industries that require a high share of specialized inputs in their production process. Financial openness can thus facilitate smooth interactions between firms and an important corporate stakeholder – suppliers of crucial production inputs.”

CEF.UP – MaR Seminar/Webinar

Tuesday – April 9^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Influence of governance instruments on supply chain quality: a qualitative investigation in the dairy industry”

Márcio Cardoso Machado – Universidade Paulista (Brazil)

Abstract:

“Purpose– This paper aims to explore the formal (i.e. contracts, standards, processes, and structure) and informal (i.e. social structure, norms, information sharing, andvalue systemand culture) governance instruments used in supply networks and their influence on quality. Design/methodology/approach – This research is qualitative-exploratory in nature, involving semi structured interviews with 20 managers from three essential layers in the dairy industry’s supply chain: companies that supply essential inputs to milk producers; milk producers; and milk cooperatives. Findings – Analysis of the generated data show that formal governance instruments have a strong and/or weak influence on products’ and operations’ quality in the dairy industry context; in formal instruments have a strong and/or weak influence on quality, as a counterpart to formal instruments; and the integration of verified governance instruments positively influences the quality of products and operations. Practical implications –This paper offers several managerial and practical implications. The first is to encourage suppliers of primary inputs and milk producers to invest in the formal structure, primarily informal contracts with each other. The second implication suggests the relevance of creating different training and qualification courses with members fromal lorganizational levels. Third, there is a need for cooperatives, encompassing all industries, to consider several informal instruments, complementary to contracts and standards currently used for processes. Originality/value–Governance instruments can lead to desired supply chain outcomes, including those related to quality. Although previous supply chain studies have investigated the relationship between governance instruments and the supply chain, and quality management and the supply chain, studies on governance instruments’ influence on supply chain quality are limited.

CEF.UP – ECO Seminar/Webinar

Tuesday – April 9^th, 2024, at 1:00 p.m. | Room 305| Online

“A Temporary VAT Cut in Three Acts: Announcement, Implementation, and Reversal” (joint work with Tiago Bernardino, Ricardo Duque Gabriel e Márcia Silva-Pereira)

João Nuno Quelhas   –  Banco de Portugal

Abstract:

“We investigate the pass-through of a Value-Added Tax (VAT) decrease to consumer prices, using Portugal’s temporary cut in VAT for a subset of food items in 2023 as a laboratory. Exploiting a novel high-frequency dataset of online retail prices, we use an event study approach to analyze price dynamics across the complete policy lifetime. We find that prices rose by around 1% upon announcement, that the pass-through was almost complete when the policy was implemented, and around 70% at the reversal. The reduction in prices persisted high over the entire duration of the policy. We estimate that the policy decreased month-on-month inflation by 0.7 percentage points. We also find evidence of deflation in producer prices which could be a potential mechanism driving the high pass-through.”

CEF.UP – MaR Seminar/Webinar

Tuesday – April 2^nd , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Identifying Competitors in Geographical Markets Using the CSIS Method” (joint work with Xian Gu)

P. K. Kannan – Robert H. Smith School of Business at the University of Maryland (United States of America)

Abstract:

“Identifying the most relevant competitors in a geographical market is an important and necessary requirement for businesses with a significant offline presence, such as hotels, restaurants, and retail stores. In particular, the specific location of a business and the geographical density of potential competitors can be critical factors in determining the competitive structure. However, this task can be quite difficult when the potential competitive set is large, and the competition is asymmetric. In this study, we apply the Conditional Sure Independence Screening (CSIS) method to a system of demand functions for competitor identification. This method offers significant computational efficiency because it estimates a marginal regression for each potential competitor instead of estimating a full model consisting of all potential competitors. To validate the effectiveness of our method and explore the boundary conditions of its performance, we conduct extensive simulation analyses under different spatial data generating processes. We show that our CSIS method’s performance is superior to multiple other variable selection approaches in identifying true competitors and is robust under spatial misspecifications. Then we apply our method to hotel competition in two U.S. geographical regions and show how the competitive structure varies across geographical densities and market segments. Finally, we highlight how managers can use the results strategically and outline the potential of the method for other non-geographical applications.”

CEF.UP – FIN/ECO Seminar/Webinar

Thursday – March 21^st, 2024 at 1:00 p.m. | Room 305| Online

“Information Frictions and Firm Take up of Government Support: A Randomised Controlled Experiment” 

Diogo Mendes  – Stockholm School of Economics (Sweden)

Abstract:

“This paper studies whether informational frictions prevent firms from accessing government support using a randomised controlled trial. We focus on two Portuguese COVID-19 relief programs, providing (i) wage support for workers who are kept on payroll and (ii) credit lines backed by government guarantees. We randomly assign firms to a treatment providing either simplified information about a program, or a combination information and step-by-step application support. We find a significant treatment effect on take up of the wage support program. Our results constitute direct evidence that information frictions act as a barrier to comprehensive distribution of firm-level support measures.”

CEF.UP – WiP Seminar/Webinar

Tuesday – March 19^st, 2024 at 1:00 p.m. | Room 305 | Online

Title: “Fissured Firms and Worker Outcomes” (with Matias Cortes – York University;  Diego Dabed – Utrecht University; Anna Salomons – Utrecht University)

Ana Oliveira – Utrecht University (Netherlands)

Abstract:

“We consider how firms’ organization of production relates to workers’ wages. Using matched employer-employee data from Portugal, we document that, within detailed industries, firms differ starkly in terms of their occupational employment concentration, with some firms employing workers across a broad range of occupations and others being much more specialized. These differences are robustly predictive of wages: a worker employed in a specialized, i.e. `fissured’ firm earns less than that same worker employed in a less specialized firm. This wage penalty cannot exclusively be explained by worker-firm sorting, and is observed across a wide range of occupations. Firm specialization helps account for the role of firms in inequality: over half of the wage penalty from specialization is explained by differences in firm productivity, and firm specialization is strongly negatively related to AKM firm fixed effects. However, the evidence does not support a large role for increased pay transparency or lower rent-sharing as mechanisms for the observed wage penalty from firm specialization.”

CEF.UP – FIN Seminar/Webinar

Thursday – March 7^th, 2024 at 1:00 p.m. | Room 305| Online

“Service Flows in Euro Area Corporate Bonds” (joint work with Felix Corell and Melina Papoutsi)

Lira Mota  – MIT Sloan School of Management (United States of America)

Abstract:

“Investors place value on financial assets not only for their cash flows but also for the additional services they offer, such as acting as a reliable store of value, serving as collateral, and meeting capital and liquidity requirements. These services have traditionally been valued as “convenience yields,” a reduced-form measure that is silent about the potentially multifaceted nature of these service flows. By analyzing detailed price and holdings data of the euro area corporate bond market, this paper reveals the persistent variations in convenience yields across different sector portfolios, with banks, insurance companies, and pension funds leading, and the lowest yields noted in foreign-held portfolios. Notably, post-ECB corporate quantitative easing, the ECB’s portfolio emerged with the highest convenience yield. Our findings suggest that factors such as collateral value, regulatory capital requirements, and liquidity needs are primary drivers of convenience yields in Euro area corporate bonds. Furthermore, it highlights the importance of service flows for the transmission of monetary policy.”

CEF.UP – MaR Seminar/Webinar

Tuesday – March 5^th , 2024 6:30 p.m. – 7:30 p.m. | Room 631 | Online

“Tackling the Hidden Gender Gap: Unveiling Discrimination in EU Recovery Strategies”

Maria Bastida Dominguez – Universidade de Santiago de Compostela – Faculty of Economics and Business Administration (Spain)

Abstract:

“This paper presents an analysis of the overlooked gender disparities in the European Union’s economic recovery plans, with a focus on Spain. The novel use of the input-output model in this study quantitatively reveals the gender gap inherent in these initiatives. A central part of the analysis is the examination of Spain’s National Action Plan, which, despite appearing genderneutral, inadvertently perpetuates gender inequalities. The study finds that the EU’s commitment to gender equality is not reflected in the actual implementation of recovery strategies, which tend to favour male-dominated sectors, marginalizing industries with higher female employment significantly affected by the pandemic. The use of the input-output model in this research positions it at the methodological forefront for addressing the gender gap in economic policy. The findings emphasize the discrepancy between policy intentions and actual implementation, highlighting the need for integrating gender-sensitive approaches into economic recovery plans to ensure equitable and inclusive post-pandemic recovery in the EU. Such integration is essential to ensure that post-pandemic recovery is not only equitable but also inclusive, effectively bridging the gap between policy and practice in the EU’s approach to economic recovery. ”

CEF.UP – ECO Seminar/Webinar

Friday – March 1^st, 2024, at 1:00 p.m. | Room 305| Online

“The Transmission of Foreign Demand Shocks”

Jeppe Druedahl  –  University of Copenhagen (Denmark)

Abstract:

“Introducing heterogeneous households into a New Keynesian model of a small open economy enables the model to fit a set of stylized empirical facts about the transmission of foreign demand shocks. In the absence of a strong labor income effect on consumption, the model counterfactually implies that domestic consumption decreases as the central bank raises the interest rate to curb domestic inflation. With plausible marginal propensities to consume, the model instead produces the observed increase in domestic consumption of both tradeable and non-tradeable goods. This implies that foreign demand shocks are more important for international business-cycle comovement than predicted by existing models. Our findings also have implications for stabilization policies: While monetary policy is well-suited to counteract foreign demand shocks, traditional fiscal policies are inadequate, as they do not provide sufficient stimulus to the tradeable sector. This poses a particular challenge for countries with a fixed exchange rate or in a monetary union.”

CEF.UP – WiP Seminar/Webinar

Friday – February 23^rd, 2024 at 1:00 p.m. | Room 305 | Online

Title: “On the disentanglement of an Economic Union” (with José M. Gaspar e Kiyohiro Ikeda)

Jorge Saraiva – FEP, School of Economics and Management, University of Porto and Universidade Portucalense

Abstract:

“We study how the unilateral withdrawal of a region from an economic union affects the spatial distribution of economic activity and social welfare. We explore the three-region quasi-linear log utility footloose entrepreneur model under the assumption that this dissent can be expressed as a higher transportation cost between the leaving party and the remaining union members. We find that a spatial distribution in which entrepreneurs are equally shared between the three regions is no longer possible and that asymmetric equilibria – in which the dissident region has the lowest share of entrepreneurs – arise. We also find that it is not stable for entrepreneurs to distribute them- selves only between the remaining regions in the union. We conclude that the leaving region’s share of entrepreneurs is higher, the lower the differential in transportation costs is, and the higher the mobility of workers between regions is. Finally, we also conclude that, from a global social welfare point of view, the economy as a whole attains its maximum well-being when most entrepreneurs do not live in the dissident region.”

CEF.UP – FIN Seminar/Webinar

Thursday – February 22^nd, 2024 at 1:00 p.m. | Room 305| Online

“Does Paying Passive Managers to Engage Improve ESG Performance?” (joint work with Marco Becht, Julian R. Franks and Hideaki Miyajima)

Kazunori Suzuki  – Waseda Business School (Japan)

Abstract:

“The paper studies a natural experiment in responsible investment conducted by the Japanese Government Pension Investment Fund (GPIF). In 2018 GPIF gave its largest passive manager a remunerated mandate to engage with portfolio companies to improve ESG and adopted best-in-class indexes, rewarding high ESG score companies with additional equity investment. Using private data and difference-in-differences analysis we show that engagement by the asset manager has improved scores. In an event study, we find that the conditional portfolio tilt significantly impacts share prices. We also provide evidence that ESG scores for Japan increased significantly more than for companies in other countries.”

CEF.UP – ECO Seminar/Webinar

Tuesday – February 20^th, 2024, at 1:00 p.m. | Room 305| Online

“Closing the Gender Gap in Multilateral Negotiations Through Institutional Design“

Diogo Geraldes  –  University College Dublin (Ireland)

Abstract:

“Experimental evidence from different subject pools shows that men earn more than women in majoritarian negotiations. Three stylized modes of behavior emerge as potential reasons for the gap: men sort into making opening offers more often, prefer to partner with other men, and when partnering with each other, their coalitions are more stable compared to mixed-gender ones. We design three experimental interventions to investigate the explanatory role each channel plays in the emergence of the gap and, consequently, provide potential solutions. We find that enabling everyone to simultaneously make an initial proposal does not close the earnings gap, if anything, it weakly grows in magnitude. Hiding gender eliminates bias in coalition partner choice, alters bargaining dynamics, and equalizes mean earnings. Finally, allowing for instantly-binding agreements in bargaining closes the gap, not only because mixed-gender coalitions become more stable, but also because women become preferred partners. Our results highlight how the attributes of the negotiation environment interact with gender, and suggest that the design of bargaining institutions can be leveraged to promote gender equity.”

CEF.UP – WiP Seminar/Webinar

Wednesday – February 14^th, 2024 at 1:00 p.m. | Room 305 | Online

Title: “An overlapping-generations model with data-driven equilibrium behavior” (with Alexander Gorokhovsky)

Anna Rubinchik – FEP, School of Economics and Management, University of Porto

Abstract:

“We propose a class of overlapping generations models that can serve as a workhorse for policy analysis. Recent literature identifies several features of key observable economic variables in Europe and the U.S.: the life-cycle path of earnings is hump-shaped, while the aggregate variables — per-capita consumption and labor hours — exhibit a clear time trend. Our class generates non-monotonic life-cycle behavior of labor supply and the desired aggregate trends in all its balanced-growth equilibria (BGE). There is a finite number of these equilibria and at least one of them exists provided a single-generation consumer problem has a solution. The model has a constant-returns-to-scale production, nontrivial depreciation of capital, exogenous labor-saving growth and an arbitrary individual life-cycle productivity. The necessary restrictions imposed on preferences are consistent with those generating the aggregate trends in a representative-agent economy, while ruling out popular specifications such as Cobb-Douglas or CES. We characterize BGE with MaCurdy preferences and solve a parametrized model that yields at least two stationary equilibria with reasonable interest rates. The hump-shaped life-cycle consumption profile can be generated with an additional parameter interpreted as reflecting family structure or a desire for immediate gratification that peaks at mid-life.”

CEF.UP – ECO Seminar/Webinar

Friday – February 2^nd, 2024, at 1:00 p.m. | Room 305| Online

“Good Rents versus Bad Rents: R&D Misallocation and Growth“

Antonin Bergeaud  –  HEC Paris (France)

Abstract:

“Firm price-cost markups may reflect (a) bigger step sizes from quality innovations that confer significant knowledge spillovers onto other firms, and/or (b) higher process efficiency than competing firms. We write down an endogenous growth model in which, compared with the laissez-faire equilibrium, the social planner would generally like to reallocate research resources towards high markup firms in case (a) so as to capitalize on knowledge spillovers but not in case (b). We then exploit unit price variation across firms in French manufacturing to assess the relative strength of these two forces. Viewed through the lens of our model, the French data are consistent with significant variation in innovation step sizes, and hence gains from mitigating R&D misallocation. The policy implication is that, to reach the social optimum, French research subsidies should favor only those high markup firms with “good” rents.”

CEF.UP – MaR – ECO Seminar/Webinar

Friday – January 26^th, 2024, at 1:00 p.m. | Room 305| Online

“Necessary condition analysis (NCA) with archival data: backgrounds and illustration”

Jan Dul – Rotterdam School of Management, Erasmus University (Netherlands)

Abstract:

“Necessary Condition Analysis (NCA; Dul 2016, 2020, 2021) is an emerging method that is now used in many business and management research fields and beyond. NCA understands cause-effect relations as “necessary but not sufficient” and not as probabilistic causality. “Necessary” means that an outcome will not occur without the right level of the condition, independently of the rest of the causal structure (thus the condition can be a “bottleneck”, “critical factor”, or “constraint”). In practice, the right level must be put and kept in place to avoid guaranteed failure and to allow the outcome to exist. NCA can be used as a stand-alone tool or in combination with regression-based approaches (e.g., multiple regression analysis, structural equation modeling) or Qualitative Comparative Analysis (QCA). By adding a different logic and data analysis approach, for instance through the reuse of data with a necessity causal perspective, NCA adds both rigor and relevance to theory and data analysis and provides new possibilities for impactful publications.”

CEF.UP – FIN Seminar/Webinar

Thursday – January 25^th, 2024 at 1:00 p.m. | Room 305| Online

“Brexit, what Brexit? Euro area portfolio exposures to the United Kingdom since the Brexit referendum“

Daniel Carvalho  – Banco de Portugal (joint work with Martin Schmitz)

Abstract:

“We study euro area investors’ portfolio adjustment since the Brexit referendum in terms of securities issued in the UK or denominated in pound sterling, in the context of heightened policy uncertainty surrounding the exit process of the UK from the EU. Our sector-level analysis “looks-through” holdings of investment fund shares to gauge euro area sectors’ full exposures to debt securities and listed shares. Our key finding is the absence of a negative “Brexit-effect” for euro area investors, which would have rendered UK-issued and pound-denominated securities generally less attractive. Instead, we observe that euro area investors increased their absolute and relative exposures to UK-issued and pound-denominated debt securities since the Brexit referendum. The analysis also reveals an increase in the euro area’s exposure to listed shares issued by UK non-financial corporations, while the exposures to shares issued by UK banks declined. These findings should be seen against the backdrop of low yields on euro area debt securities and a strong recovery in UK share prices since the Brexit referendum, which appear to have largely outweighed the uncertainties associated with Brexit.”

CEF.UP – FIN Seminar/Webinar

Thursday – January 18^th, 2024 at 1:00 p.m. | Room 305| Online

“Do Specialized Distress Investors Undermine Upstream Lending?” (joint work with Irem Demirci and Miguel Oliveira)

Fernando Anjos – Nova School of Business and Economics, Universidade Nova de Lisboa

Abstract:

“A growing class of investors specializes in funding distressed firms. Specialization allows these investors to develop valuable expertise, which in principle can contribute to overall economic efficiency. Notwithstanding this argument, we show that specialized distress investors (SDIs) can inadvertently worsen borrower moral hazard, since these downstream financiers rescue firms after poor performance (bailout effect). Moreover, SDI presence can make upstream lenders develop a counter-intuitive preference towards projects with lower continuation value and/or worse agency problems, in order to reduce SDI entry. In contrast to these results, we show that from a longer-run perspective SDIs can actually help in managing borrower moral hazard. This occurs in the model when SDI entry makes it easier for upstream lenders to sustain a reputation of toughness, which can in turn be critical for disciplining borrowers.”