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Empirical Finance: Identification Strategies in Corporate Finance - 2.5 ECTS

Date and time

Tuesday 28 February 2023 at 09:00 to Wednesday 22 March 2023 at 16:00

Registration Deadline

Friday 20 January 2023 at 23:00


Solbjerg Plads - room SP D4 Augustinus Fonden, (fourth floor - above canteen), Solbjerg Plads 3, 2000 Frederiksberg Solbjerg Plads - room SP D4 Augustinus Fonden, (fourth floor - above canteen)
Solbjerg Plads 3
2000 Frederiksberg

Empirical Finance: Identification Strategies in Corporate Finance - 2.5 ECTS

Course coordinator: Kasper Meisner Nielsen, Department of Finance (FI)

Professor Kasper Meisner Nielsen, FI
The course is designed as a first-year Ph.D. course. The prerequisites are knowledge of corporate finance theory and econometrics at a M.Sc. level and an ability to work independently with data using a statistical program such as Stata.
Students must participate in the whole course and do all problem sets.

The aim of the class is to introduce PhD students in finance and related fields to identification strategies in corporate finance.

Course content
The course is designed to provide an introduction to some of the empirical methods used to identify causal effects in corporate finance. We will examine how to estimate causal effects in the presence of potentially unobserved confounding factors and how to make proper statistical inference about empirical estimates.

The goal of the course is to provide PhD students with a methodological framework that will enhance their ability to design sound identification strategies in the area of corporate finance.

The course content has three main elements:
1. The students will be introduced to the main empirical methods used to identify causal effects in corporate finance. The lectures covers the main econometric challenges as well as guidance on how to estimate causal effects.
2. The course combines lectures on microeconometrics with lectures on seminal papers that apply the empirical methods to research questions in the area of corporate finance.
3. The course has a two problem sets that students must complete.
Teaching style
Lecture Plan
Lecture 1: Correlation is not causality: Linear regression models, basic assumptions and causal inference (3 hours)
Lecture 2: Instrumental variables and natural experiments (3 hours)
Lecture 3: Difference-in-differences and panel data (3 hours)
Lecture 4: Regression discontinuity design (2 hours)
Lecture 5: Research design and identification strategies (1 hour)
Date Details Due
Tue, 28 Feb 2023 Assignment Problem Set 1 - Augustinus fondens meeting room due by 9:00
Wed, 1 Mar 2023 Calendar event PhD Course Evaluations - Room SP4.20 (fourth floor) Spring 2023 23:59
Tue, 14 Mar 2023 Assignment Problem Set 2  due by 9:00

Learning objectives
The course objectives are to:
• Apply microeconometric methods in the area of corporate finance
• Identify econometric challenges in research designs in corporate finance
• Evaluate identification strategies and empirical methods used in corporate finance
• Formulate identification strategies to address econometric challenges in corporate finance

Please see 'Course content - element 3'

The course is offered through The Nordic Finance Network, and the Department of Finance at CBS will cover the course fee for PhD students from other NFN associated universities.

Course Literature
Course participants are expected to have read this literature before the course

Angrist and Pischke, 2008. Mostly Harmless Econometrics. Princeton University Press.

Academic papers
Angrist and Kruger, 2001. Instrumental variables and the search for identification: From supply and demand to natural experiments. Journal of Economic Perspectives.

Bennedsen, Nielsen, Perez-Gonzalez and Wolfenzon, 2007. Inside the family firm: The role of families in succession decisions and performance. Quarterly Journal of Economics.

Bertrand, Duflo, and Mullannaithan, 2004. How much should we trust difference-in-differences estimates? Quarterly Journal of Economics.

Bertrand and Mullainathan, 2003. Enjoying the quiet life? Corporate governance and managerial preferences. Journal of Political Economy.

Cunat, Gine and Guadalupe, 2012. The vote is cast: The effect of corporate governance on shareholder value. Journal of Finance.

Fazzari, Hubbard and Petersen, 1988. Financing constraints and corporate investments. Brookings Papers on Economic Activity.

Iliev, 2010. The effect of SOX section 404: Costs, earnings quality, and stock prices. Journal of Finance.

Nguyen and Nielsen, 2010. The value of independent directors: Evidence from sudden deaths. Journal of Financial Economics.

Rajan and Zingales, 1998. Financial dependence and growth. American Economic Review.

Yagan, 2015. Capital tax reform and the real economy: The effects of the 2003 dividend tax cut. American Economic Review.

Suggested readings 
Surveys of empirical methods in corporate finance: Roberts and Whited. 2013. Endogeneity in Empirical Corporate Finance. Handbook of the Economics of Finance, vol. 2.
Atanasov and Black. 2016. Shock-based causal inference in corporate finance and accounting research. Critical Finance Review.
Baker, Larcker, and Wang. 2022. How much should we trust staggered difference-in-differences estimates? Journal of Financial Economics.
Heath, Ringgenberg, Samadi, and Werner. 2022. Reusing Natural Experiments. Journal of Finance, forthcoming.


Select payment methods:
CBS students: Choose CBS PhD students and the course fee will be deducted from your PhD budget.
Students from other Danish universities: Choose Danish Electronic Invoice (EAN). Fill in your EAN number, attention and possible purchase (project) order number. Do you not pay by EAN number please choose Invoice to pay via electronic bank payment (+71). 
Students from foreign universities: Choose Payment Card. Are you not able to pay by credit card please choose Invoice International to pay via bank transfer. 
Please note that your registration is binding after the registration deadline.


Event Location

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Organizer Contact Information

CBS PhD School
Bente Ramovic

Phone: +45 3815 3138

Organizer Contact Information

CBS PhD School
Bente Ramovic

Phone: +45 3815 3138