Conference Agenda

This study examines the relationship between financial flexibility and total shareholder return (TSR)

for European listed firms during and after systemic shocks. Using a panel of firms that combines

accounting and market data, we estimate the dynamic effects of crises on shareholder value through

local panel projections and impulse-response functions. This approach allows us to assess whether

pre-shock financial flexibility explains heterogeneity in investor reactions across shocks of different

natures. The results provide evidence that firms with greater financial flexibility prior to the shock

experience smaller declines in shareholder value and a faster recovery in the aftermath. However,

the role of financial flexibility is not uniform across crises: the relative importance of liquidity buffers

and debt capacity varies depending on the characteristics of the shock. This paper contributes to

the literature on financial markets’ response to systemic events by identifying financial flexibility

as a key mediating mechanism. Methodologically, it advances the empirical analysis by applying

local panel projections to study TSR dynamics over a horizon that spans multiple crises, thereby

offering a unified framework to evaluate the role of corporate financial policy across different types

of shocks.

This paper examines whether and how product market failures affect trade credit offered by suppliers. We document that product recalls are associated with a reduction in trade credit granted by suppliers. Consistent with the reputation concerns explanation, we find that product recalls are negatively associated with subsequent access to trade credit, particularly when they are accompanied by negative media coverage and when the recalls are severe. Additional tests reveal that this effect is most pronounced when firms respond passively to product market failures and when the recalling firm has low bargaining power. These results are robust across several sensitivity analyses and remain consistent when addressing potential endogeneity issues.

We examine the impact of geopolitical tensions on the likelihood of a firm being discouraged from applying for a bank loan. The study utilizes a substantial sample of anonymized (confidential) small and medium-sized enterprises (SMEs) operating in countries within the eurozone. The empirical findings indicate that geopolitical risk is a significant factor adversely influencing the prevalence of discouraged bank borrowers. We identify the tightening of bank credit standards as a key transmission channel through which geopolitical risk heightens borrower discouragement, pointing to a predominantly supply-side mechanism. Factors such as the dynamics of firms' turnover growth, the level of trust in politicians, and the intensity of SMEs' exports serve to moderate the initial adverse impact of geopolitical risk. These findings are robust and suggest numerous implications for policymakers and governments.

We provide evidence that lower shareholder voter turnout raises the market value of voting rights. For identification, we exploit the 2010 NYSE Rule 452 amendment eliminating broker authority over uninstructed shares as a shock to voter turnout in director elections. Consistently, we show that turnout is highly persistent across firms, allowing shareholders to anticipate participation, and that low turnout predicts future contentious governance events, where relative shareholder influence is more valuable. Our findings indicate that investors value de-facto voting power and that the persistence of shareholder participation plays a significant role in shaping the economic value of corporate control.