Title of his talk: The Effect of Stock Liquidity on the Firm’s Investment and Production
Abstract of his talk:
We show that stock market liquidity affects subsequent corporate investment and production. Stock illiquidity, which raises the firm’s cost of capital, lowers investment in capital assets, R&D, and inventory. This effect holds regardless of the firms’ financially constraints. Consequently, illiquidity induces firms to adopt production processes that are less capital intensive. Illiquid firms have higher marginal productivity of capital, greater labor input increase for given increases in assets, and lower operating leverage, thus being less reliant on fixed costs. These effects hold after controlling for endogeneity, employing an exogenous liquidity event – the 2001 decimalization – and the instrumental variable method.
Yakov Amihud is Ira Rennert Professor of Entrepreneurial Finance at the Stern School of Business, New York University. His research includes the evaluation of corporate financial policies, mergers and acquisitions, initial public offerings, objectives of corporate managers, dividend policy, and law and finance.
The focus of his research is the effects of liquidity of assets on their returns and values, and the design and evaluation of securities markets’ trading methods. On these topics, Amihud has done consulting work for the NYSE, AMEX, CBOE, CBOT, and other securities markets. He has published more than seventy research articles in professional journals and in books, and edited and co-edited five books on topics such as LBOs, bank M&As, international finance, and securities market design.
Title of his talk: Finance, Trust and Society
Abstract of his talk:
The talk will deal with how finance’s role in society and how social developments such as an emphasis on CSR or gender diversity affect real financial policy and valuation.
Professor Rau is the Sir Evelyn de Rothschild Professor of Finance at Cambridge Judge Business School. He is also a past president of the European Finance Association, and a past editor of Financial Management. He is a founder and director of the Cambridge Centre for Alternative Finance (CCAF) and a member of the Cambridge Corporate Governance Network (CCGN).
Before joining the University of Cambridge, Rau was an academic in the US teaching at universities such as the University of California at Berkeley, the University of California at Los Angeles and Purdue University. He received his undergraduate degree in chemistry from Delhi University in 1987, an MBA from IIM Bangalore in 1989, and a Ph.D. degree from INSEAD in 1997. He is a past President of the European Finance Association and the program chair for the annual 40th anniversary meetings of the European Finance Association meetings in Cambridge.
Professor Rau was Principal at Barclays Global Investors, then the largest asset manager in the world, in San Francisco from 2008-2009. He is an Associate Editor of the Journal of Corporate Finance, the Journal of Banking and Finance, Financial Review, the Quarterly Journal of Finance, among others. His research has frequently been covered by the popular press including the New York Times, the Financial Times, the Wall Street Journal, and the Economist, among others.
His research, published in journals such as the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies, has won several awards including the EFA Barclays Global Investor Award, the Chinese Finance Association Best Paper in Corporate Finance and the Financial Management Association “Best of the Best” Award. He won the Ig Nobel Prize in Management in 2015, a prize awarded for research that makes people laugh, and then think.