The objective of this course is to provide students with a framework for understanding and evaluating empirical research in corporate financial reporting and disclosure. The second goal is to examine links between financial accounting research and related research in corporate finance. The focus will be on the methodology and research design as well as on the underlying economic questions. We will cover common empirical strategies including natural experiment, instrumental variables, regression discontinuity, structural estimation approach, etc.

The course covers empirical studies on voluntary and mandatory disclosure changes; the impact of disclosure choices on markets; the economic consequences of cross-listing equity securities outside the issuer’s home country; line-of-business diversification’s effect on firm value; debt contracting and other topics.

Financial reporting is a large and important industry. Researchers study and learn about both sides of the financial reporting market: the supply side and the demand side. Users of financial information include, but not limited to, shareholders, analysts, lenders, credit rating agencies, boards, managers, employees, and business press. There are different research design trade-offs in this field of research compared to the other economic disciplines, which makes it especially challenging. Institutional factors include securities laws, accounting rules, regulatory environment, and monitoring institutions. Researchers also need to understand firm-level factors, which include financial reporting systems, internal control, internal audit, management, and boards. Financial reporting research has to address a substantial political and regulatory impact. This additional complexity provides both opportunities and difficulties for researchers.

This course is recommended for students who want to pursue doctorate studies in applied economics, finance, and accounting, as well as students who plan their careers in economic consulting and finance.

We propose to discover special industry-related characteristics of management corporate finance decisions. By corporate finance decisions we mean firm level investments and financing.

Academicians usually take a set of assumptions to motivate company level decisions to be efficient in theory. The very basic efficiency criteria are the enterprise value and shareholder wealth. In real life we usually meet with greater number of factors affecting management decisions than we usually control in financial modelling. Classic factors that we try to take into account in academic empirical efforts may include crisis, firm size, potential conflicts between debtholders and equityholders, etc.

By promoting this project to you we propose to investigate industry as a factor that we assume has potential to influence the efficiency of financial management practices

Areas of practice-related research may include:

1. Financial management issues in innovative companies: financing early stage investments, development of venture capital funds, project financing industry specifics, crowdfunding practices,
2. Industry peculiarities of specific financial decisions – investment, financing and payout
3. Best examples of company growth strategies and payout practices from real industries
4. Investigation of best practices and opportunity to develop real industry level cases.

Special topics include valuation modelling efforts in metallurgy, transport, retail, engineering, pharmaceutical, fuel and energy industries as examples. We want students to apply corporate finance principles to project company cash flows, payouts to equityholders, financing issues and modelling optimal capital structure. Students will be able to

• learn best practices in financial modelling
• perform a detailed study of a company case or set of companies and discover industry peculiarities
• gain experience in projecting decisions and modelling cash flows
• work with real data and use industry projections from professionals
• write a special report and present results to professionals

We invite students to work with real financial data, develop analytical skills taking into account specifics of particular industry case. Our project is will enable you to push your theoretical corporate finance knowledge closer to practice.

Project related seminars will be carried out with help of real practitioners from PWC. Enrolled students will be able to meet and study existing global business consulting practices.