• will be able to grasp, analyze and discuss current scientific publications in the field of finance;
• will be prepared to research, write and present academic papers;
• will be prepared to further deepen and broaden their specialized knowledge in a relevant PhD program.

Moreover, this course will contribute to the students’ ability to:

• engage in a scientific discussion and make an appropriate contribution
• confidently organize and integrate ideas and information
• present (in an oral and written form) findings appropriate to an audience

In the reading part, we will meet six times during the semester. At each session two key papers (one theoretical and one more empirical) of a selected area will be discussed. Students should read both papers carefully and in detail and then share their understanding of those papers with the group. To facilitate the process, at the beginning of each session a full presentation of one paper and a summary of the other one will be presented by one student (for approximately 30-40 minutes in total). The presentations will be followed by group discussions. The course instructor will be available before and during the sessions to assist students understanding the technical details of the papers.

The writing part will be held jointly with VGSF PhD Research Seminar. Therefore, masters students have the opportunity of being involved in the process of presenting and discussing papers by PhD students and to present their master thesis proposal. The proposal presentations are scheduled in the last two seminars at the end of January (19thand 26th)

Reading Part

In the reading part, the students are expected to:

- Read the papers assigned for each session thoroughly
- Present once during the semester (one full paper and one summary together; preferably using the slide format)
- Actively participate in group discussions

Moreover, the students are strongly encouraged to read other papers related to the selected topic and back their comments by referring to the literature. Showing such an effort will earn some extra credit.

Writing Part

The students have to attend the PhD Research Seminar presentations. Additionally, each student has to present one proposal for her/his thesis. A maximum of 45 minutes is reserved for the presentation and 15 minutes for the general discussion. This presentation offers the opportunity to receive feedback from the faculty, PhD and master students.

A tentative title and a short abstract of the proposal must be communicated to Rainer Jankowitsch and Christian Laux by January 5, 2011.

Guideline to Analyze and Present Papers (Reading Part)

Think of the following issues while reading the paper and/or preparing your presentation:

1) The major empirical question, observation or puzzle that the paper aims to address
2) The background literature and previous results
3) Key assumptions of the model
4) Foundations of theoretical model
- Type of the model (general equilibrium, partial equilibrium, game, …)
- Key players or agents, their objective functions
- Major variables
- Time-line of events or moves
- Equilibrium / solution concept
- Results and comparative statics
5) for empirical papers: Identification and estimation strategy including the tactics to overcome misspecification problems
6) Possible challenges or shortcomings of the model or estimation method
7) Possible extensions of the paper

The grade will be based entirely on in-class activities. There will be no final exam. The final grade will be a weighted average of reading (60%) and writing (40%) sections grades.

Reading Part:

Paper presentation 40%

Active class participation 12% per each session, total maximum 60%, one session absence is allowed

+ Showing the knowledge of relevant literature in a meaningful way adds a maximum of extra 5% per session, total maximum 20%

Writing Part

Class room participation 30%

Proposal presentation 70%

Session 1: Risk Management

Financial Constraints, Competition, and Hedging in Industry Equilibrium, Adam, Dasgupta and Titman, Journal of Finance, 2007

Financing Policy, Basis Risk, and Corporate Hedging: Evidence from Oil and Gas Producers, Haushalter, Journal of Finance, 2000

Session 2: Interaction of IO and Finance

Oligopoly and Financial Structure: The Limited Liability Effect, Brander and Lewis, American Economics Review, 1986
Capital Structure and Product-Market Competition: Empirical Evidence from the Supermarket     Industry, Chevalier, American Economics Review, 1995

Session 3: Asset Management

Mutual Fund Flows and Performance in Rational Markets , Berk and Green, Journal of Political Economy, 2004
Portfolio Choice over the Life-Cycle when the Stock and Labor Markets are Cointegrated, Benzoni , Collin-Dufresne and Goldstein, Journal of Finance, 2007

Session 4: Investment Theory

Corporate Investment and Asset Price Dynamics: Implications for the Cross-section of Returns, Carlson, Fisher and Giammarino, Journal of Finance, 2004
Do Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints? Kaplan and Zingales, Quarterly Journal of Economics, 1997

Session 5: Finance, Poverty and Growth

Franchising Microfinance, Bubna and Chowdhry, Review of Finance, 2010
Does financial liberalization spur growth? Bekaert, Harvey and Lundblad, Journal of Financial Economics, 2005

Session 6: Selected Issues

Oil Futures Prices in a Production Economy with Investment Constraints, Kogan, Livdan and Yaron, Journal of Finance, 2009

Do Behavioral Biases Affect Prices? Coval and Shumway, Journal of Finance, 2005