Skip to content
SAVE_20231221_135150

Research

I conduct empirical research in financial intermediation and banking. My dissertation focuses on the intersection of Finance and contemporary issues such as climate change, Covid-19 and societal as well as cultural differences. During my PhD studies, I received the chance the conduct research on climate risks for fossil fuel firms at the European Central Bank.

Working Papers

Repeated Interaction in Distant Lending Relationships

This paper examines the impact of lender-borrower distance on renegotiation outcomes in the syndicated loan market. Borrowers in more distant lending relationships benefit disproportionately from repeated interaction relative to borrowers engaged with close banks, leading to marked decreases in spreads. During the analysis, I exploit a measure of lender-borrower distance derived from Facebook connections, encompassing not only physical distance but also additional dimensions crucial for capturing the costs of information transfers. Leveraging the modified Dealscan database, I compare terms before and after renegotiations for the same loan tranche. My results suggest that the additional informational frictions arising in more distant lending relationships are effectively resolved through repeated interaction. The empirical findings confirm the predictions of models of lending under agency frictions and provide novel insights into the dissolution of information asymmetries.

Spreads Years after_firm controls

Burn Now or Never? Climate Change Exposure and Investment of Fossil Fuel Firms

(with Jakob Adolfsen, Ana-Simona Manu and Francesca Vinci)
ECB Working Paper
 
We investigate the impact of expectations about future climate policy on investment decisions of fossil fuel firms. Our empirical analysis, which employs a differences-in-differences approach, reveals that firms in the fossil fuel industry with greater exposure to climate change significantly increased their investment in response to the Paris Agreement, compared to firms with lower exposure. Importantly, investment was directed towards traditional activities in the fossil fuel industry. By contrast, there are no indications that firms invested to transition towards renewable energy sources nor in making production less carbon-intensive. Our findings contribute to the ongoing discussion about the potential adverse effects of delays in the implementation of climate regulation. More specifically, it lends support to the "Green Paradox" hypothesis, which would predict that in anticipation of future climate policy, fossil fuel firms have a short-term incentive to raise production. 
counterfactual investment ratio

Work in Progress

Climate Change and Capital Reallocation: Evidence from the CLO market

(with Zacharias Sautner, Sascha Steffen and Carola Theunisz)
 
We investigate the funding sources for carbon-intensive brown firms. In particular, we test whether the importance of the shadow banking sector for brown firms has increased due to bank’s commitments to climate change initiatives