FIN41330 Empirical Corporate Finance

Academic Year 2023/2024

This course aims to bridge the gap between theoretical financial models and the real world by reviewing the major accomplishments (and failures) of empirical finance during the last quarter of a century. More broadly, the course will provide an accessible introduction to empirical studies in corporate finance. Given the applied nature of the material, the course will focus on the empirical techniques used most often in the analysis of corporate finance problems and how they are applied using actual market-based and financial statement data.

FIN41330 is one of the core courses in the MSc in Finance programme. Material covered in Equity Asset Valuation (FIN40180), Capital Markets and Instruments (FIN42040), Financial Theory (FIN42000), and Financial Analysis (FIN42030) has direct relevance to this course. In particular, the course examines some of the theoretical material covered in these modules in a more applied empirical setting. The course will revisit topics on agency theory, market efficiency, capital structure, restructuring, and corporate control. Students should also find some of the econometric techniques covered in Financial Econometrics (FIN41660) useful in understanding the techniques used in empirical papers, and in undertaking the group project and lab work.

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Curricular information is subject to change

What will I learn?

Learning Outcomes:

On completing this module, you will be able to:
1. Evaluate, summarise, and discuss the research contributions and findings of top journal academic papers in empirical corporate finance.
2. Critique the seminal theories and understand different research design and econometric approaches used in empirical corporate finance.
3. Work in teams to manipulate large datasets, apply different research designs, and develop econometric models using a statistical package (e.g., Stata) to test key theories and hypotheses.
4. Demonstrate sound critical and analytical skills, discuss and write-up your own research findings in top journal academic paper format.

Indicative Module Content:

Content is subject to change, but the following key topics are typically covered?

1. Review of key theories and empirical evidence on agency theory
2. IPO background and theory
3. Takeovers around the world and information asymmetry
4. Governance and firm value
5. Predicting events and returns - IPO failure and takeovers
6. Venture capital and firm performance
7. Dynamic modeling applied to capital structure
8. Corporate cash holdings

How will I learn?

Student Effort Type	Hours
Specified Learning Activities	60
Autonomous Student Learning	100
Lectures	24
Tutorial	6
Total	190

Am I eligible to take this module?

Requirements, Exclusions and Recommendations

Not applicable to this module.

Module Requisites and Incompatibles

Not applicable to this module.

How will I be assessed?

Assessment Strategy

Description	Timing	Open Book Exam	Component Scale	Must Pass Component	% of Final Grade
Class Test: Final In-Class Test	Week 12	n/a	Graded	No	30
Class Test: Mid-Session Class Test	Week 7	n/a	Graded	No	30
Project: Project (Empirical Paper)	Throughout the Trimester	n/a	Standard conversion grade scale 40%	No	40

Carry forward of passed components
Yes

What happens if I fail?

Remediation Type	Remediation Timing
In-Module Resit	Prior to relevant Programme Exam Board

Assessment feedback

Feedback Strategy/Strategies

• Feedback individually to students, on an activity or draft prior to summative assessment
• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment
• Peer review activities

How will my Feedback be Delivered?

Students can inspect in-class exams post assessment. Post exam feedback is also provided in the lecture and a document uploaded to Brightspace so students can evaluate and improve future exam performance. Projects will be returned by email with a cover sheet showing how the group performed. The project will also be returned with tracked comments and changes.

Associated Staff

Name	Role
Ruoyu Gao	Tutor

When is this module offered?


Spring
Lecture	Offering 1	Week(s) - 20, 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33	Wed 13:00 - 14:50
Lecture	Offering 2	Week(s) - 20, 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33	Wed 15:30 - 17:20
Tutorial	Offering 1	Week(s) - 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33	Wed 12:00 - 12:50
Tutorial	Offering 2	Week(s) - 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33	Wed 11:00 - 11:50
Tutorial	Offering 3	Week(s) - 21, 22, 23, 24, 25, 26, 29, 30, 31, 32, 33	Wed 13:30 - 14:20
Spring