Two FRIC seminars: Diana Bonfim, Banco de Portugal and Johan Hombert, HEC Paris
FRIC Center for Financial Frictions are proud to announce the upcoming seminars with Diana Carina Bonfim, Banco de Portugal and Johan Hombert, HEC Paris
Agenda for May 27, 2015
9.30-10.15 Diana Bonfim, Banco de Portugal: Surviving the perfect storm: the role of the lender of last resort
10.15-10.30 Coffee Break
10.30-11.15 Johan Hombert, HEC Paris: Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?
Please find the abstracts for the talks below:
Diana Bonfim, Banco de Portugal: Surviving the perfect storm: the role of the lender of last resort
Abstract: When banks are hit by a liquidity shock, central banks have a key role as lenders of last resort. Despite the well-established importance of this mechanism, there is scarce empirical evidence that allows to explore this key role of central banks. We are able to explore a unique setting in which banks suddenly lose access to market funding due to contagion fears, at the onset of the euro area sovereign debt crisis. Using monthly data at the loan, bank and firm level, we are able to test the role of the central bank in a scenario of imminent collapse. We find that the liquidity obtained from the central bank played a critical role in avoiding the materialization of such a scenario.
Johan Hombert, HEC Paris: Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?
Abstract: We study whether R&D-intensive firms are more resilient to trade shocks. We correct for the
endogeneity of R&D using tax-induced changes to the cost of R&D. On average across US man-
ufacturing firms, rising imports from China lead to slower sales growth and lower profitability.
These effects are, however, significantly smaller for firms with a larger stock of R&D - by about
half when moving from the 25th percentile to the 75th percentile of the R&D stock distribution.
As a result, while the average firm in import-competing industries cuts capital expenditures and
employment, R&D-intensive firms downsize considerably less.
Location
Solbjerg Plads 3, 2000 Frederiksberg
Room: SPs13 Velux