Finance

November 10th, 2022

Do Employee Shareholders Care about their Employers' ESG Performance?

The Environmental, Social and Governance (ESG) performance of companies has become an increasingly significant factor influencing investor sentiment in recent years. But does this hold for all investors? A recent study by HEC Paris Finance researchers Maxime Bonelli and François Derrien, with Marie Brière of Amundi Asset Management, Paris Dauphine University and Université Libre de Bruxelles, investigated the response of French employee shareholders to ESG performance through their personal investment behavior in their employers’ share schemes. The results show that these employees have a distinctly different response to the ESG performance of their employers: one that is focused on their personal welfare.

By Maxime Bonelli , François Derrien

business people scrutinizing a document in a meeting room_vignette

Finance

November 07th, 2022

How Governments’ Heavy Reliance on Bank Debt Affects Firms

Noémie Pinardon-Touati, newly Assistant Professor at Columbia University and holder of a PhD in Finance from HEC Paris, investigates how governments affect the economy, with practical implications for policymakers. In this interview based on her research, she explains how the increase of local governments’ reliance on bank debt adversely affects firms, and thereby hinders growth.

Finance

November 04th, 2022

Future of Finance: How Are New Technologies Reshaping the Sector?

The advent of digital technologies has created a very new and vastly different financial landscape. Today's buying and selling of securities is conducted mostly by computer programs that react within nanoseconds – faster than any human could – to the subtlest market fluctuations. In a new report published by the Centre for Economic Policy Research (CEPR), Professor of Finance Thierry Foucault comes to grips with how technologies are fundamentally changing the way banks, brokers, exchanges, and dealers do their work, and what it means for investors, for privacy and income inequalities.

By Thierry Foucault

Finance

May 09th, 2022

Activist Short Sellers vs. Financial Analysts: Competitive Claims of Expertise

The methods and aims of activist short sellers and financial analysts are often at odds. In a highly competitive environment, there is a battle for narrative authority, with short sellers often criticizing analysts. New research examines this struggle, and how — or if — analysts respond to challenges.

By Hervé Stolowy , Luc Paugam

Finance

October 01st, 2021

Why Student Debt Relief May Fall Short of Its Good Intentions

As the U.S. staggers beneath the weight of its education debt – a crushing $1.6 trillion in 2020 – there are increasing calls for loan forgiveness. But debt forgiveness plans need to be crafted carefully or they might actually disproportionately favor high-income individuals or specific ethnic groups. A duo of Finance researchers, Sylvain Catherine of Wharton School and Constantine Yannelis of Chicago Booth School of Business, explains how to tailor such policies to better redistribute their benefits. Sylvain Catherine is a HEC Paris PhD alumnus.

By Sylvain Catherine

Finance

July 01st, 2021

8 minutes

Real Effects of Dividend Taxes: A Natural Experiment From Switzerland

Any tax inexorably distorts the behaviour of economic agents, and dividend taxation is no exception to this rule. However, accurately assessing the impact of a tax reform on economic activity remains a difficult if not impossible task. Indeed, a change in tax rules affects the whole economy, and it is difficult to attribute a change in the behaviour of economic agents to the reform rather than to the evolution of the economic situation. This article reviews a change in Swiss tax policy that allowed us to precisely assess how listed companies react to a reduction in dividend taxation.

By Dušan Isakov , Christophe Pérignon , Jean-Philippe Weisskopf

Finance

April 08th, 2021

5 minutes

Why Do Investors Trade on Unverified Rumors?

Stock prices occasionally move in response to unverified rumors. These rumors often concern corporate takeovers and are associated with a surge in stock returns and trading activity. As CNBC stock expert Herb Greenberg succinctly observed: “Takeover rumors have always been part of the game of Wall Street, but there are times they fly so quickly you don't have time to consider the sources.” Why do investors trade based on unverified rumors?

By Daniel Schmidt

Finance

March 05th, 2021

Real Estate Returns Are Lower Than You Think

National trends for housing data over the last decades seem to indicate that housing prices climb steadily. Even during the pandemic, certain real estate markets are showing record prices. Yet a new study, with unusual access to minute detail, indicates that over the long term, real estate as an investment is decidedly lukewarm.

By Christophe Spaenjers

houses in London - adobe stock - vignette

Finance

December 15th, 2020

How Activist Short Sellers Police Financial Markets

New research analyzes how activist short sellers’ “research reports” convince investors that the companies they target are overvalued. Professors Luc Paugam and Hervé Stolowy of HEC Paris and Yves Gendron of the Université Laval found that the share price of companies targeted by major activist short sellers drop by 11.2%, on average, over three days. Target firms are also more likely to be subsequently delisted, suspended from stock exchanges, or to go bankrupt. Who are activist short sellers and how do they police financial markets?

By Luc Paugam , Hervé Stolowy

muddy waters research carson block narratives - vignette

Finance

December 09th, 2020

7 minutes

“A $%^* Sexist Program”: Detecting and Addressing AI Bias

A major issue facing companies that use AI, algorithmic bias can perpetuate social inequalities — as well as pose legal and reputational risks to the companies in question. New research at HEC Paris offers a statistical method of tracking down and eliminating unfairness.

By Christophe Pérignon