PhD Candidate in Finance

I am a 4th-year Ph.D. Candidate in Finance at WHU – Otto Beisheim School of Management and a visiting scholar at Stern School of Business, at NYU. I will be on the job market in 2018/2019. You can download here a preliminary version of my Job Market Paper.

Corporate Finance
Behavioral Finance

Chair of Corporate Finance
WHU – Otto Beisheim School of Management
Burgplatz 2, 56179 Vallendar

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“She Is Mine”: Determinants and Value Effects of Early Announcements in Takeovers (with NIHAT AKTAS and BURCIN YURTOGLU)
Journal of Corporate Finance, 2018, 50: 180-202
Best AFFI 2017 Conference Paper; Media coverage: Les Echos 

Some M&A bids are voluntarily disclosed by the bidders prior to the signature of a definitive agreement. Why is this happening? We propose an “announce-to-signal” explanation: Early announcements allow bidders to signal to target shareholders high synergies so as to overcome negotiation frictions and improve success rates. We show that negotiation frictions predict earlier announcements. Early announced transactions are associated with higher expected synergies, offer premium, completion rates, and public competition.

Presentations: 6th Annual Corporate Finance Conference, AFFI 2017, Corporate Finance Workshop in Durham University, Workshop on Corporate Governance and Investment

Working Papers:

Friends at WSJ: Journalist Connection, News Tone, and Stock Returns
Job Market Paper

When firms are connected to the Wall Street Journal (WSJ) reporters, they receive markedly more favorable news coverage upon an M&A event and associated better market reactions. The effect on the financial market is larger for the deals featured on the front page of the Journal. Evidence suggests that the relationship is causal: First, using the reporters’ turnover as an instrument for the connected coverage, I observe that the news slant and market effects remain significant. Additionally, using Rupert Murdoch’s acquisition of the WSJ as an exogenous shock to journalistic independence, I find that firms previously connected to Mr. Murdoch received better coverage and more positive stock returns after the ownership change.

Presentations: EFA (Doctoral Tutorial), Helsinki Finance Summit, Humboldt University

Are Market Reactions to M&As Biased by Overextrapolation of Salient News?
with ELIEZER FICH from Drexel University

We study earnings surprises released by firms in a takeover target’s 1-digit SIC hours before the M&A public announcement. We find that these surprises correlate with the acquirers’ M&A announcement return, but not with the returns to 4-digit SIC matched bidder and target peer firms. A week after the M&A announcement, acquirers exhibit a stock price reversal and their response to the earnings surprises disappears. We cannot reconcile these findings with rational Bayesian updating, information transmission, or strategic timing theories. The evidence that salient events affect investors’ M&A valuations, supports behavioral theories predicting asset pricing distortions due to cognitive biases.

Presentations:  AFA, City University of Hong Kong, CKGSB, Erasmus University, ESSEC, Humboldt University, Peking University, University of Lille II, Research in Behavioral Finance Conference, University of Missouri, UNLV

Bribery and Cross-border Acquisitions

Do acquirers bribe in cross-border M&A transactions? I explore an exogenous implementation of the OECD Anti-bribery Convention in 41 countries that criminalizes bribe payment in foreign markets. I document that cross-border deal frequency drops significantly from affected countries after the law enactment, and that more corrupt target countries experience a greater deal number decline. These results suggest a hidden use of bribes in cross-border transactions. Further evidence suggests that deal synergy drops due to the prohibition against foreign bribery: deal premium decreases significantly following the laws, and deal abnormal returns drop as the corruption and governance environment in the target country worsens relative to the acquirer country.

Presentations:  AFFI 2016, Conference on Empirical Legal Studies, FMA (Doctoral Student Consortium), NYU Stern, Spring Meeting of Young Economists, WHU

What Drives the Takeover Process? New Evidence from the Inner Workings of Internal M&A Teams

To uncover the black-box of the inner workings of internal corporate merger and acquisition teams, we survey some 65 largest firms from Austria, Germany, and Switzerland. We find a growing importance in relying on the firm’s own employees for analyzing and implementing the takeover strategies. Responding firms analyze on average 90 potential deals each year and complete five transactions. Revenue synergies are by far the main merger motive. Internal teams primarily use DCF to value targets, and circa 40% of the firms fails to properly adjust the cost of capital. CEOs are more likely to participate in negotiations of large deals. Moreover, M&A team factors can explain about 45% of the acquirer fixed effects in announcement return regressions. Overall, these results shed light on the why firm-specific factors account for a large portion of the variation in takeover outcomes.

Presentations: AFFI 2018, Audencia Business School

Irreversible Investment under Uncertainty: Do Firm Boundaries Matter?
with JOHNSON MO from NYU Stern

We empirically analyze investment under output price uncertainty when firms face differential asset specificity or irreversibility. We study the oil exploration and production (E&P) industry, where some producers vertically integrate into downstream segments and face higher capital irreversibility. Using exogenous oil price uncertainty shocks, we show that these integrated producers cut capital expenditures significantly more than standalone producers in response to price volatility. This finding is consistent with a real option model of investment, where a higher level of capital irreversibility amplifies the uncertainty effects on real investment.

Presentations:  Causal Inference Workshop at Northwestern University, NYU Stern