First HEC Paris - Princeton Finance Conference on Campus

The First HEC Paris - Princeton Finance Conference was held on May 12th, 2014 on the HEC campus. The purpose of the event was to present the latest academic research in financial economics to an audience of academics and practitioners alike. To enrich the discussion, some 30 participants – including emeritus professors, researchers and Ph.D students – gathered to exchange thoughts and reflections on the papers presented.

Covering a wide range of financial topics including household spending and investments, industry, sovereign crises, and trading, the professors Yacine Ait-Sahalia (Princeton University), Laurent E. Calvet (HEC Paris), Uli Hege (HEC Paris), Valentin Haddad (Princeton University), Johan Hombert (HEC Paris), Atif Mian (Princeton University), David Sraer (Princeton University), and David Thesmar (HEC Paris), presented their promising papers.

Here is a list of the papers presented:

In “Who are the Value and Growth Investors?”, Laurent Calvet with his co-authors Sebastien Betermier and Paolo Sodini investigate the determinants of value and growth investing in a large administrative panel of Swedish residents over the 1999-2007 period. 

In “House Price Gains and U.S. Household Spending from 2002 to 2006”, Atif Mian with his co-author Amir Sufi examine the effect of rising U.S. house prices on borrowing and spending from 2002 to 2006. 

In "Portfolio Choice in Markets with Contagion”, Yacine Aït-Sahalia with his co-author T. R. Hurd consider the problem of optimal investment and consumption in a class of multidimensional jump-diffusion models in which asset prices are subject to mutually exciting jump processes. 

In “Industry Strength and International M&A Flows”, Ulrich Hege with his co-authors Laurent Frésard and Gordon Phillips  examine how the industry specialization of a country contributes to understanding the patterns of cross-border mergers and acquisitions. 

In “Sovereign Crises and Bank Financing: Evidence from the European Repo Market”, David Thesmar with his co-authors Charles Boissel, François Derrien and Evren Ors examine the impact of the European sovereign debt crisis in 2008-2011 on a key segment of the European interbank market, the General Collateral (GC) repo market. 

In “Banking Integration and House Price Comovement”, David Sraer with his co-authors Augustin Landier and David Thesmar show that the correlation across US states in house price growth increased steadily between 1976 and 2000. The contemporaneous geographic integration of the US banking market, via the emergence of large banks, was a primary driver of this phenomenon. 

In “Information Aversion”, Valentin Haddad with his co-authors Marianne Andries propose a novel theory of inattention on disappointment aversion.  These preferences generate a close link between information decisions and risk attitude.

In “News Trading and Speed”, Johan Hombert with his co-authors Thierry Foucault and Ioanid Rosu explain that speed matters. It shows that an investor's optimal trading strategy is significantly different when he observes news faster than others versus when he does not, holding the precision of his signals constant.