Annual Conference

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International Macroeconomics, Money & Banking, Senior Fellows/Fellows

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May 2013

Do Loan Officers' Incentives Lead to Lax Lending Standards?

Sumit AGARWAL, Itzhak BEN-DAVID
To better understand the role that loan officers’ incentives played in the origins of the financial crisis, we study a controlled field experiment conducted by a large bank. In the experiment, the incentive structure of a subset of small business loan officers was altered from fixed salary to volu...
Keywords: loan officers, default, housing bubble, financial crisis
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Annual Conference

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Investment Finance

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May 2024

Do Investors Overvalue Startups? Evidence from the Junior Stakes of Mutual Funds

Vikas AGARWAL, Brad BARBER, Si CHENG, Allaudeen HAMEED, Harshini SHANKER, Ayako YASUDA
We show that mutual funds report their junior stakes in startups at 43% higher valuation than model fair values that consider multi-tier capital structures of startups. The latest-issued and most senior security is worth 48% more per share than junior securities held by mutual funds, implying that m...
Keywords: Startup financing, Startup valuation, Mutual funds, Venture capital, Fair value, Private valuation
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Annual Conference

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Sustainable and Green Finance

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May 2025

Do Investors Care about Carbon Offsets?

Yeow Hwee CHUA, Liuyang SHE
We examine how investors respond to firms’ carbon offset strategies in voluntary carbon markets. Following the retirement of carbon offsets, we find a positive market reaction, with a cumulative abnormal return of 1.1% over 15 trading days. This market response is driven by the quality of offsets ...
Keywords: Sustainable Finance, Carbon Offsets, Investor Preferences, Temperature Anomal
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Specialty Conference

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Specialty Conference

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Sep 2020

Do Innovations in Lending Help SMEs?

Swee Liang TAN, Yoke Wang TOK, Thitipat CHANSRINIYOM
As new digital technologies emerge that make the provision of financial services more efficient, they hold the potential to address barriers that SMEs face in accessing credit. This paper found empirical evidence that crowdfunding for SMEs improved SMEs’ timeliness to pay debt in Singapore. Anecdo...
Keywords: Alternative Financing, Crowdfunding, financial institutions, FinTech, Innovations in Lending, regulation, SMEs
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Senior Fellows/Fellows

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Senior Fellows/Fellows

Do Innovation Subsidies Make Chinese Firms More Innovative? Evidence from the China Employer Employee Survey

Takeo HOSHI, Hong CHENG, Dezhuang HU
The Chinese government has been using various subsidies to encourage innovations by Chinese firms.  This paper examines the allocation and impacts of innovation subsidies, using the data from the China Employer Employee Survey (CEES). We find that the innovation subsidies are preferentially allocat...
Keywords: Innovation subsidies, state owned enterprises, political connection, patents, China Employer Employee Survey
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