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Cambridge Endowment for Research in Finance (CERF)

 
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Thu 19 May 13:00: Title to be confirmed

Wed, 15/09/2021 - 10:30
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Thu 16 Jun 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:49
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Thu 09 Jun 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:44
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Thu 19 May 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:41
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Thu 05 May 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:39
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Thu 10 Mar 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:37
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Thu 14 Oct 13:00: The Aggregate Consequences of Forbearance Lending: Evidence from Japan

Wed, 08/09/2021 - 13:01
The Aggregate Consequences of Forbearance Lending: Evidence from Japan

We study the impact of forbearance on aggregate economic performance in Japan over the period 2007-2017. Forbearance is a practice whereby banks accommodate bad borrowers instead of terminating their loans, with negative consequences for aggregate productivity. The Japanese policy response to the global financial crisis of 2007-2008 (SME Financing Facilitation Act) has revived this practice. Our novel theory-driven empirical approach enables us to perform a quantitative assessment of the aggregate impact of forbearance, including its positive effects, namely the avoidance of a large number of bankruptcies and increased unemployment. We develop a search-theoretic model of credit markets with severance costs that capture forbearance frictions and estimate those frictions using the Tokyo Shoko Research (TSR) dataset. Our estimates indicate a marked increase in forbearance frictions from 2010 onwards, suggesting that the SME Financing Facilitation Act of 2009 has revived the practice of forbearance in Japan. Our counterfactual exercises indicate that, in the absence of forbearance, the capital productivity of survivors would on average be 4.22% higher. On average, there would be 6.89% fewer jobs and 3.93% fewer firms. Finally, we provide regression-based evidence in support of our channel. First, we relate our estimates of forbearance frictions to the zombieness measure of Caballero, Hoshi and Kashyap (2008), and show that higher frictions are associated with a higher probability that a firm is classified as a zombie firm. Second, we exploit geographical variation in search frictions across Japanese prefectures to show that forbearance frictions are more significant when search frictions are more stringent. This shows that our model captures a unique margin in the data, which is not explained by models that are not based on search and matching.

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Thu 24 Feb 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:00
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Thu 10 Feb 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:54
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Thu 27 Jan 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:18
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Thu 25 Nov 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:17
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Thu 11 Nov 13:00: Title to be confirmed

Tue, 07/09/2021 - 15:48
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Thu 28 Oct 13:00: Title to be confirmed

Mon, 06/09/2021 - 16:05
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Thu 14 Oct 13:00: The Aggregate Consequences of Forbearance Lending: Evidence from Japan

Mon, 06/09/2021 - 11:37
The Aggregate Consequences of Forbearance Lending: Evidence from Japan

We study the impact of forbearance on aggregate economic performance in Japan over the period 2007-2017. Forbearance is a practice whereby banks accommodate bad borrowers instead of terminating their loans, with negative consequences for aggregate productivity. The Japanese policy response to the global financial crisis of 2007-2008 (SME Financing Facilitation Act) has revived this practice. Our novel theory-driven empirical approach enables us to perform a quantitative assessment of the aggregate impact of forbearance, including its positive effects, namely the avoidance of a large number of bankruptcies and increased unemployment. We develop a search-theoretic model of credit markets with severance costs that capture forbearance frictions and estimate those frictions using the Tokyo Shoko Research (TSR) dataset. Our estimates indicate a marked increase in forbearance frictions from 2010 onwards, suggesting that the SME Financing Facilitation Act of 2009 has revived the practice of forbearance in Japan. Our counterfactual exercises indicate that, in the absence of forbearance, the capital productivity of survivors would on average be 4.22% higher. On average, there would be 6.89% fewer jobs and 3.93% fewer firms. Finally, we provide regression-based evidence in support of our channel. First, we relate our estimates of forbearance frictions to the zombieness measure of Caballero, Hoshi and Kashyap (2008), and show that higher frictions are associated with a higher probability that a firm is classified as a zombie firm. Second, we exploit geographical variation in search frictions across Japanese prefectures to show that forbearance frictions are more significant when search frictions are more stringent. This shows that our model captures a unique margin in the data, which is not explained by models that are not based on search and matching.

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Sat 11 Sep 14:00: Cambridge - Corporate Finance Theory Symposium 2021 - Day 2

Thu, 22/07/2021 - 16:38
Cambridge - Corporate Finance Theory Symposium 2021 - Day 2

For the eighth year, CERF organizes a Corporate Finance Theory Symposium. The symposium consists of high quality papers in the broad area of corporate finance theory.

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Fri 10 Sep 14:00: Cambridge - Corporate Finance Theory Symposium 2021 - Day 1

Thu, 22/07/2021 - 16:38
Cambridge - Corporate Finance Theory Symposium 2021 - Day 1

For the eighth year, CERF organizes a Corporate Finance Theory Symposium. The symposium consists of high quality papers in the broad area of corporate finance theory.

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Sat 24 Sep 09:00: Cambridge - Nova Workshop - Day 2 Registration is required

Fri, 18/06/2021 - 11:13
Cambridge - Nova Workshop - Day 2

The Nova School of Business and Economics (Nova) proposed to host a workshop in partnership with CERF . The first exchange will take part in Cambridge in 2020.

Registration is required

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Fri 23 Sep 12:00: Cambridge - Nova Workshop - Day 1 Registration is required

Fri, 18/06/2021 - 11:13
Cambridge - Nova Workshop - Day 1

The Nova School of Business and Economics (Nova) proposed to host a workshop in partnership with CERF . The first exchange will take part in Cambridge in 2020 .

Registration is required

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Latest news

Best Student Paper Award 2021 - winners announced

18 June 2021

For the last 13 years, Cambridge Finance is offering its Best Student Paper Award. The award comprises a cash honorarium of £1,000 and a certificate is awarded to the author of the best student paper in finance presented during the 2020-2021 academic year.

Best Student Paper Award 2021 - competition is now open

12 February 2021

For the last 13 years, Cambridge Finance is offering its Best Student Paper Award. The award comprises a cash honorarium of £1,000 and a certificate is awarded to the author of the best student paper in finance presented during the 2020-2021 academic year.