Navigation auf uzh.ch
Navigation auf uzh.ch
Honorable grants awarded to four PhD Candidates from our department for their research projects
Congratulations to our PhD Candidates Ana Mao de Ferro, Emanuela Benincasa, Alex Osberghaus and Jan Zemlicka from our Department of Finance for receiving various grants for their dissertation projects! Overall, the third-party funding won by our PhD candidates amounts to CHF 352'000.
Ana Mao de Ferro received the UZH Candoc Grant in June 2024 with her research project “Is the Fire Out? Initial Public Offerings in Fossil Fuel Industries and the Green Transition”. The grant provides funding of approximately CHF 60’000 for a 12-month project duration, which enables her to work on an excellent PhD thesis at the University of Zurich.
The financial industry has, in recent years, increasingly focused on addressing and mitigating the effects of climate change, notably by prioritizing the funding of greener technologies. Shareholder interest in investment strategies that incorporate environmental concerns has thus grown enormously. However, an overly narrow focus on green financing alone can lead to limited or even adverse outcomes. Policymakers, practitioners, and academics increasingly acknowledge that fossil fuel industries cannot be eliminated overnight and that they can play a role in facilitating the green transition. For instance, traditional fossil fuel firms can develop and invest in carbon capture, utilization, and storage technologies, which help reduce the impact of their CO2 emissions. These investments require substantial funding, long time horizons, and a tolerance for uncertain outcomes, making equity an especially suitable instrument. One of the primary ways firms can raise new equity is through an initial public offering (IPO), a complex and unique challenge for every firm.
The main goal of Ana's project is to investigate the characteristics and impacts of IPOs of firms primarily engaged in fossil fuel production and exploration, or FIREs (Fossil Industry-Related Enterprises). In addition to documenting the evolution of IPOs by these firms, Ana will explore three key questions. First, how do the IPOs of FIREs differ from those of other firms? Second, how do new FIREs entering the market through IPOs compare with established, already-listed FIREs? Third, do these industries undergo significant changes following the entry of new firms into the public market?
Her project aims to uncover the extent to which FIREs continue to raise equity and the real outcomes of that funding — specifically, whether new FIREs can contribute positively while fossil fuels remain in use. Alternatively, new FIREs may be raising equity due to anticipated future restrictions on fossil fuel exploration, driving investors to capitalize on opportunities while they still exist to maximize returns. As a result, pressure to phase out fossil fuels in the long run could paradoxically be detrimental in the short run. The findings from this project will therefore be relevant for investors and policymakers seeking to support a sustainable transition to a greener economy.
Emanuela Benincasa has been awarded the UZH Mobility Grant in the spring semester 2024, to work on her job market paper. Her six-month stay at the University of New South Wales in Sydney, Australia, was supported with CHF 30'000.
Emanuela's project aims to investigate the relationship between the physical presence of bank branches and firm misconduct. The research asks whether the absence of local bank branches affects companies' environmental and social practices, resulting in changes in their misconduct. In fact, physical branches play a key role in the financial development of local economies. As banks are removing their local physical presence, this can indirectly affect firms’ decision-making and practices, especially if they both operate in the same locality. The project aims to provide novel insights into how bank presence on the ground, through firms’ decision-making, interacts with the real economy due to negative implications for local communities.
Alex Osberghaus has also been awarded the UZH Mobility Grant in the spring semester 2024 for a visit to the Department of Finance at the New York University (NYU). He will work on his dissertation projects for six months with CHF 30'000 provided by the grant.
Alex' research project studies the intersection of bilateral bank lending and syndicated lending by combining two large datasets, resulting in three research papers. The first paper explores why banks choose to syndicate loans instead of lending bilaterally. It is the first paper to systematically investigate the coexistence of the bilateral bank loan market and the syndicated loan market — the two largest debt sources for firms. The second paper studies reporting biases in Dealscan, a data base widely used by academics and practitioners. The third paper revisits the question of information asymmetries in corporate credit markets, utilizing new microdata to offer a broader understanding of these asymmetries than previous studies.
Additionally, Alex is using the grant to work on his job market paper titled "Naturally risky? Synthetic Risk Transfer", which is the first to investigate the rapidly growing synthetic risk transfer market, where banks bundle loans and sell their credit risk to investors. Using micro data on banks' entire firm loan portfolio, the loans whose credit risk was sold, and the debt structure of the credit risk investors, Alex studies the factors behind the boom in this market and the consequences when banks potentially have loan exposure to the investors that buy their credit risk.
Jan Zemlicka received the SNSF Doc.CH grant in the spring semester 2024 for his research project «Bank Competition for Deposits and Transmission of Monetary Policy», providing him with CHF 232’000 over a period of 47 months. Doc.CH supports promising researchers in Switzerland in their doctoral thesis of their own choice in the humanities and social sciences. Jan's excellent research proposal beat strong competition, with a success rate of only 12% of all applications in this very last call of the SNSF doc.CH grant.The grant recipients will conduct their research projects at 13 Swiss universities across Switzerland. The funding covers project costs, the salary of the doctoral students, and may include a contribution towards expenses directly related to project implementation.
The recent inflation surge prompted central banks across the developed world to tighten their monetary policy by raising their short-term interest rates to levels unseen since the onset of the Great Recession. The broad consensus in the macroeconomics literature suggests that these interest rate increases have an anti-inflationary effect. However, there is less of a consensus on precise mechanics through which an increase in short-term interest rates translates into a reduction in inflation. The lack of precise understanding of monetary policy transmission exposes society to a significant risk of policy error because central banks necessarily rely on estimates of the transition mechanism when deciding how much to raise short-term rates in reaction to incoming inflation developments. A sufficiently large error in the estimate of the transmission mechanism might induce a central bank to move interest rates too high or too little, potentially pushing the economy into a recession associated with high unemployment or vice-versa failing to prevent a costly inflationary episode.
In this project, he aims to contribute to the understanding of monetary policy transmission by developing a structural model of the deposit market and incorporating it into a standard New Keynesian framework used by central banks to guide their policymaking process. The motivation behind this proposal is twofold. First, current New Keynesian models typically either abstract from the existence of banks and deposits or model them using approximations inconsistent with observed data. Second, recent empirical literature (e.g. Greenwald et al., 2023) shows that bank market power in the deposit market plays a crucial role in the dynamics of the passthrough of monetary policy to deposit rates faced by savers as well as business loan and mortgage rates. In light of these empirical findings, the omission of the deposit mechanism in the state-of-the-art monetary models has the potential to cause large errors in policy advice generated by those models.
Jan Zemlicka plans to use the resulting general equilibrium model to study the role of deposit market frictions for the design of optimal monetary policy and to explore the implications of changes in the structure of the deposit market (e.g. bank mergers) for the conduct of monetary policy.
PhD Program News
