Dr Amil Dasgupta and Dr Daniel Paravisini Maggi

Mike Burkart

This course is compulsory on the MRes/PhD in Finance (Route 1) and MRes/PhD in Finance (Route 2). This course is available with permission as an outside option to students on other programmes where regulations permit.

Doctoral students in the Departments of Finance and Economics, and other students with the permission of the PhD Programme Director, Professor Daniel Ferreira.

The first half of this course focuses on the theory of corporate finance. The theory half of the course can, in turn, be subdivided into two parts. The first part reviews some of the classical concepts in corporate finance, using tools from game and contract theory to study incentive and information problems at the level of the firm, examining how financial contracts can be designed to mitigate these problems. This part of the course also considers how takeovers and ownership concentration can help to mitigate conflict of interests among insiders and investors in firms. The second part focuses on the theory of financial intermediation. This component reviews the classical theories for the existence of financial intermediaries, focusing on the key inter-linkage between financial intermediation and financial fragility. This component of the course also examines the role of financial intermediaries in engendering financial market imperfections. The second half of the course will consider empirical methods in corporate finance and its applications to capital structure, investments, financial distress, corporate governance, and financial intermediation.

30 hours of lectures in the MT. 30 hours of lectures in the LT.

Readings will be mainly based on books and journal articles including:

Tirole, Jean, The Theory of Corporate Finance, 2006, Princeton University Press.
Freixas, X. and Rochet, J.C., The Microeconomics of Banking, 1997, MIT Press.
J. Wooldridge, Econometric Analysis of Cross-Section and Panel Data, Cambridge: The MIT Press, 2002.
M. Roberts and T. Whited: "Endogeneity in Empirical Corporate Finance," Handbook of the Economics of Finance, vol. 2.

Exam (100%, duration: 3 hours) in the main exam period.