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Course Syllabus

Master 2019/2020

Research Seminar "Capital Structure and Investment Decisions"

Type: Elective course (Strategic Corporate Finance)
Area of studies: Finance and Credit
Delivered by: School of Finance
Where: Faculty of Economic Sciences
When: 2 year, 1-3 module
Mode of studies: offline
Instructors: Viсtoria A. Cherkasova, Elena Y. Makeeva, Nikita Pirogov
Master’s programme: Strategic Corporate Finance
Language: English
ECTS credits: 7
Contact hours: 80

Course Syllabus

Full Syllabus

Abstract

This course represents a system of research seminar for the 2nd year master students. The research seminar is aimed to develop the academic skills of the master students and to prepare them to make their own research in the area of finance. Research in this area applies specific mathematical and econometrical methods, as well as the perfect data mining skills. The course contains two types of research activity. The first activity for every 2nd year master student is to participate in the large research seminars of HSE School of Finance. The second type of activity is to participate in the small team seminars (that should be chosen before the beginning of the academic year). Both parts of the research seminar aim to help students to develop the academic writing skills and a number of soft skills that are useful for a financier (e.g. presentation skills, team work, project management). The first part of research seminar aims at fostering discussion and interaction on variable topics in finance. The second part aims to develop personal academic skills in the chosen area. Students who chose Capital Structure and Investment Decisions deepen their knowledge in in the decision-making mechanisms of the company in the field of attracting and choosing financing scheme as well as capital budgeting processes. The students also develop their skills in the data- mining, work with the literature and text preparation in this area.
Learning Objectives

Learning Objectives

  • To provide the student with proper tools and skills for making their own research in the area of finance
Expected Learning Outcomes

Expected Learning Outcomes

  • Be able to formulate and verify his or her own research question
  • Be able to choose and apply the proper methods to test the hypotheses
  • Be able to explain and demonstrate using empirical data the challenges to the efficient market hypothesis
  • Be able to explain the nature of biases rooted in data mining and statistical methods
  • Be able to prepare the literature review for his or her master thesis
  • Know how to do the data-mining in financial and investment sphere
Course Contents

Course Contents

  • How to write a research paper in capital structure and investment decisions. Formal and informal requirements to master theses.
  • Work with new papers and data in area of capital structure and investment decisions
  • Progress discussion. Individual presentations (every class)
  • Participation in School of Finance seminar or Lab seminar
  • Presentations of master thesis results
Assessment Elements

Assessment Elements

  • non-blocking Literature reviews
  • non-blocking Data gathering
  • non-blocking Participation in class discussions
  • non-blocking Predefense of the master thesis
    The final grade is an average of all grades.
Interim Assessment

Interim Assessment

  • Interim assessment (3 module)
    0.3 * Data gathering + 0.3 * Literature reviews + 0.1 * Participation in class discussions + 0.3 * Predefense of the master thesis
Bibliography

Bibliography

Recommended Core Bibliography

  • Andy C W Chui, Alison E Lloyd, & Chuck C Y Kwok. (2002). The Determination of Capital Structure: Is National Culture a Missing Piece to the Puzzle? Journal of International Business Studies, (1), 99. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.pal.jintbs.v33y2002i1p99.127
  • Berens, J., & Cuny, C. (1995). The capital structure puzzle revisited. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.A86E04A8
  • Berger, P. G., Ofek, E., & Yermack, D. L. (1997). Managerial Entrenchment and Capital Structure Decisions. Journal of Finance (Wiley-Blackwell), 52(4), 1411–1438. https://doi.org/10.1111/j.1540-6261.1997.tb01115.x
  • Brick, I. E., Frierman, M., & Kim, Y. K. (1998). Asymmetric Information concerning the Variance of Cash Flows: The Capital Structure Choice. International Economic Review, (3), 745. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.ier.iecrev.v39y1998i3p745.61
  • Fama, E. F., & French, K. R. (2002). Testing Trade-Off and Pecking Order Predictions About Dividends and Debt. Review of Financial Studies, 15(1), 1–33. https://doi.org/10.1093/rfs/15.1.1
  • Goel, R. K., & Ram, R. (2001). Irreversibility of R&D investment and the adverse effect of uncertainty: Evidence from the OECD countries. Economics Letters, (2), 287. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.eee.ecolet.v71y2001i2p287.291
  • Jonathan B. Berk, Richard C. Green, & Vasant Naik. (1999). Optimal investment, growth options, and security returns. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.22CFFB43
  • Malcolm Baker, & Jeffrey Wurgler. (2002). Market Timing and Capital Structure. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.22B3A116

Recommended Additional Bibliography

  • deB. Harris, F. H. (1994). Asset Specificity, Capital Intensity and Capital Structure: An Empirical Test. Managerial & Decision Economics, 15(6), 563–576. https://doi.org/10.1002/mde.4090150604
  • Hayne E. Leland. (1994). Corporate Debt Value, Bond Covenants, and Optimal Capital Structure. Research Program in Finance Working Papers. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.ucb.calbrf.rpf.233
  • Hovakimian, A., Hovakimian, G., & Tehranian, H. (2004). Determinants of target capital structure: The case of dual debt and equity issues. Journal of Financial Economics, (3), 517. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.eee.jfinec.v71y2004i3p517.540
  • Hovakimian, A., Opler, T., & Titman, S. (2001). The Debt-Equity Choice. Journal of Financial and Quantitative Analysis, (01), 1. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.cup.jfinqa.v36y2001i01p1.24.00
  • Pindyck, R. S. (1991). Irreversibility, Uncertainty, and Investment. Journal of Economic Literature, (3), 1110. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.aea.jeclit.v29y1991i3p1110.48
  • Yong Jin Kim, & Jong-wha Lee. (1999). Overinvestment, Collateral Lending, and Economic Crisis. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.351BDF3A
  • Zwiebel, J. (1996). Dynamic Capital Structure under Managerial Entrenchment. American Economic Review, (5), 1197. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.aea.aecrev.v86y1996i5p1197.1215