Finance and Corporate Governance
Code: 41983Credits: 10
| Degree programme | Type | Course |
|---|---|---|
| Management, Organization and Business Economics | OB | 0 |
Contact lecturer
- Name :
- Florina Raluca Silaghi
- Email :
- florina.silaghi@uab.cat
Teaching staff
- Miguel Ángel Garcia Cestona
- Florina Raluca Silaghi
- Damian Tojeiro Rivero
Teaching staff (external to UAB)
- Jesús Andrés Gorrín León
- Chiara Bellucci
- Beatriz Martínez
- Demián Nicolás Macedo Macedo
- Rafel Crespí Cladera
Group languages
You can consult this information at the end of the document.
Prerequisites
No previous requirements are needed, although some general knowledge in statistics and optimization are welcome.
Objectives
This module wants first to provide a relatively non-technical approach to modern microeconomic theory, and after that, it covers the major topics in corporate finance and corporate governance theory, with an emphasis on recent contributions and research questions. The main message we want to get through is that many situations can best be analyzed by (1) thinking about what's really going on in the "real world", (2) making use of the tools of microeconomics to re-interpret the problem and develop a simple model, and (3) thinking carefully about how to solve the model. For the first part, this will be illustrated in several areas, including information problems, certain aspects of monopoly theory, and oligopoly theory. The student will learn the topics covered in a traditional course such as: consumer theory, firms’ decision-making and market structure, general equilibrium as well as information theory. The student will handle mathematical techniques for dealing with these issues. Therefore, by the end of the module the student will have enough bases to rigorously approach all sorts of topics covered in business strategy, corporate governance, finance and the theory of organizations.
For the remaining parts, this module covers the major topics in corporate finance, finance and corporate governance theory, with an emphasis on recent contributions and research questions. Having the students basic notions in finance, contract theory and game theory, the course will specially focus on corporate governance problems. The lectures will be on financial contracting under asymmetric information, incomplete contracts, control and corporate governance, and financial intermediation.
Learning outcomes
- Know and distinguish the characteristics of the different business databases.
- Present research results to various audiences using the different media available.
- Master the technical and IT tools needed to carry out applied studies.
- Identify the relevant sources of information and their content for subsequent analysis.
- Develop an ethical, social and environmental commitment.
- Work in multidisciplinary international teams.
- Develop a critical and a constructive attitude to one's work and that of others.
- Explain and motivate the analyses, interpret the results and present all these clearly and concisely in English.
- Leadership and decision-taking capability.
- Show mastery of the characteristics of the financial markets.
- Understand the determining factors of government structures.
- Understand the current models of microstructure.
- Know the different models of corporate governance.
- Identify the characteristics of the different agents linked to the company.
- Understand and show mastery of the relationship with the firm.
- Understand the process of capital markets formation, their characteristics and their evolution for a better understanding of company governance.
- Apply knowledge of quantitative economics in the analysis of company financial policies.
- Identify contributions from gender studies in the subject of research.
Contents
The first part of the module will approach topics covered in a traditional Microeconomics course. The student will handle mathematical techniques for dealing with these issues. For the remaining parts, this course covers topics on finance and corporate finance, corporate governance, and some recent contributions and research questions.
The module have been divided in four parts: microeconomics, finance, corporate governance and additional research topics.
The following topics will be covered in Economics of Markets (Microeconomics):
1. Economics as a Behavioral Science. See how economists might think about a variety of problems
2. Consumer Behavior and Choice under Uncertainty
3. Production Theory and Production Costs
4. Profit Maximization and Monopoly
5. Oligopoly Theory
6.Information Economics
7. Information Economics. An Institutional Approach.
The following topics will be covered in Finance and Markets:
8. Risk, return and diversification
9. Portfolio theory
10. Simplifying portfolio theory
11. The capital asset pricing model
12. Valuing real assets
13. Capital structure
The following topics will be covered in Corporate Governance:
14. Introducing Capital Structure: Modigliani-Miller Theorems
15. Bankruptcy Costs and Debt Holder – Equity Holder Conflicts
16. Capital Structure and Corporate Strategy
17. Ownership and Control
18. Corporate governance and performance
19. Regulation and best practice codes
The following topics will be covered in the Seminar in Finance and Markets:
20. Market efficiency: Theory and empirical evidence
21. Behavioral Finance.
22. Financial Risks: Measures of credit risk
A detailed description of their contents can be found at: https://www.uab.cat/web/estudiar/official-master-s-degrees/general-information/management-organization-and-business-economics-1096480962610.html?param1=1236065664764
Learning activities and methodology
| Title | Hours | ECTS | Learning outcomes |
|---|---|---|---|
| Type: Autonomous | |||
| Autonomous | 85 | 3.4 | 1, 5, 7, 8, 10, 15 |
| Type: Guided | |||
| Directed | 100 | 4 | 1, 5, 9, 11, 12, 13, 14, 15 |
| Type: Supervised | |||
| Supervised | 25 | 1 | 2, 3, 4, 6, 7, 10 |
The module combines theoretical lectures and practical sessions that require the dynamic participation of students. Learning activities include: following lectures on the main topics, solving and handling problem sets and computer exercises, reading and critical reviewing of papers. All this is an interactive fashion. Case preparations and in-class discussions will also become important benchmarks of student progress. In-class discussions give students an opportunity to apply material from the class to real-world problems. Other class sessions will be primarily dedicated to lecture material and shorter discussions.
The proposed teaching methodology may undergo some modifications according to the restrictions imposed by the health authorities on on-campus courses.
Assessment
Continuous assessment activities
| Title | Weight | Hours | ECTS | Learning outcomes |
|---|---|---|---|---|
| Assignments | 40 | 16 | 0.64 | 1, 3, 4, 6, 11, 12, 14, 15, 18 |
| Class Participation | 10 | 4 | 0.16 | 2, 5, 7, 8, 9, 18 |
| Exams | 50 | 20 | 0.8 | 5, 8, 10, 11, 13, 15, 16, 17 |
For this course, the use of Artificial Intelligence (AI) technologies is permitted exclusively for support tasks, such as bibliographic or information searches, text editing, or translations. Students must clearly identify which parts have been generated using AI technologies, specify the tools used, and include a critical reflection on how these tools have influenced both the process and the final outcome of the activity. Lack of transparency in the use of AI in assessed tasks will be considered a breach of academic integrity and may result in partial or total loss of marks for the activity, or more severe sanctions in serious cases.
Continuous evaluation
The evaluation system of the module includes:
- Assignments (solving problems sets, presentation of critical reviewing of papers, final essay)
- Class Participation (case and news discussion, short debates)
- Test (midterm and final exam)
The student will pass the module when the final mark is equal or higher than five (over ten).
The proposed evaluation activities may undergo some changes according to the restrictions imposed by the health authorities on on-campus courses.
A student who does not attend any assessable test is considered ‘not assessable’. Therefore, a student who completes any component of continuous assessment can no longer be classified as ‘not assessable’.
Single assessment
An exam of the four subjects of the module with a weight of 100%. The same recovery system will be applied as for continuous evaluation. The review of the final qualification follows the same procedure as for the continuous evaluation. A student who does not attend the exam is considered ‘not assessable’.
The completion of assessment activities is subject to the provisions set out in this course guide and in the "Policy of the School of Economics and Business on the Detection of Irregularities during Assessment Activities", which regulates the conditions under which assessment tasks are conducted and the procedures applicable in cases where indications of irregularities are detected. Students are encouraged to consult the policy.
Bibliography
Most relevant bibliography:
Books:
Bowles, Samuel (2004); “Microeconomics, Behavior, Institutions and Evolution”; Rusell Sage Foundation and Princeton University Press. https://www-degruyter-com.are.uab.cat/document/doi/10.1515/9781400829316/html
Hillier, D., Grinblatt, Mark and Sheridan Titman (2011), \"Financial Markets and Corporate Strategy\", 2nd Edition, McGraw-Hill.
Kreps, David (1990), “A Course in Microeconomic Theory”; Princeton University Press. https://www-degruyter-com.are.uab.cat/document/doi/10.1515/9780691215747/html
Scientific articles:
Baker, M., Wurgler, J., & Yu, Y. (2012). \"Global, local, and contagious investor sentiment\". Journal of Financial Economics, 104, 272–287. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0304405X11002601?via%3Dihub
Bebchuk, L.A., Fried, J., and Walker, D.I. (2002), “Managerial Power and Rent Extraction in the Design of Executive Compensation”, University of Chicago Law Review, 69, 751-846. https://www-jstor-org.are.uab.cat/stable/1600632#metadata_info_tab_contents
Burkart, Mike, Andrei Shleifer, and Fausto Panunzi (2003), “Family firms”, Journal of Finance, 58, 2167-2202. https://www-jstor-org.are.uab.cat/stable/3648187?seq=1#metadata_info_tab_contents
Davies, J.R., David Hillier and P. Mc-Colgan (2005), “Ownership Structure, Managerial Behavior and Corporate Value”, Journal of Corporate Finance, 11, 4, 80-96. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0929119905000118?via%3Dihub
Demsetz, Harold, Belen Villalonga (2001), “Ownership Structure and Corporate Performance” Journal of Corporate Finance, 7, 209- 233, 2001. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0929119901000207?via%3Dihub
García-Cestona, M.A. and J. Surroca (2008): Multiple goals and ownership structure: Effects on the performance of Spanish savings banks. European Journal of Operational Research, 187, 582–599. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0377221707003529?via%3Dihub
Jensen, M. and Meckling, W. (1976), “Theory of firm: managerial behavior, agency costs and ownership structure”, Journal of Financial Economics, 3, 305-360. https://www-sciencedirect-com.are.uab.cat/science/article/pii/0304405X7690026X?via%3Dihub
Stambaugh, R.F., Yu, J., & Yuan, Y. (2012). \"The short of it: investor sentiment and anomalies\", Journal of Financial Economics, 104, 288-302. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0304405X11002649?via%3Dihub
Thomsen, S. and T. Pedersen (2000), “Ownership Structure and Economic Performance in the Largest European Companies”, Strategic Management Journal, 21, 689-705. https://www-jstor-org.are.uab.cat/stable/3094306?seq=1#metadata_info_tab_contents
Complementary bibliography:
Books:
Bodie, Z. and R.C. Merton (1998), \"Finance\", Prentice Hall.
Brealey, R.A., and S.C. Myers (2003), \"Principles of Corporate Finance\", McGraw-Hill, 7 ed.
Elton, E., Martin, J.G., Brown, S.J., and W.N. Goetzmann (2003), \"Modern Portfolio Theory and Investment Analysis\", John wiley &Sons, 6 ed.
Hull, J.C. (2012), \"Risk management and financial institutions\". Ed. Pearson.
Ross, S.a., R.W., Westerflied, and B.D. Jordan (2000), \"Fundamentals of Corporate finance\", McGraw-Hill, 5 ed
Sharpe, W.F., G. J. Alexander, and J. V. Bailey (1999), \"Investments\", Prentice Hall, 6. Ed.
Varian, Hal (2010), \"Intermediate Microeconomics\"; W. W. Norton Company.
Scientific articles:
Altman, E. (1982), “A Further Empirical Investigation of the Bankruptcy Cost Question”, Journal of Finance, 39 1, 219-26. https://www-jstor-org.are.uab.cat/stable/2327613#metadata_info_tab_contents
Ballester, L., Casu, B., & Gonzalez-Urteaga, A. (2016), \"Bank fragility and contagion: Evidence from the CDS market\", Journal of Empirical Finance, 38, 394-416 https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0927539816000128?via%3Dihub
Basel Committee on Banking Supervision, BCBS (2010b): “Principles for Enhancing Corporate Governance”. October 2010.
Crespí, R., García-Cestona, M., Salas, V., (2004), “Governance mechanisms in Spanish banks: Does ownership matter?”, Journal of Banking and Finance 28, 2311-2330. https://www-sciencedirect-com.are.uab.cat/science/article/pii/S0378426603002383?via%3Dihub
Faulkender, M,. and M. Petersen (2006), “Does the Source of Capital Affect Capital Structure?, Review of Financial Studies, 19, 249-79. https://www-jstor-org.are.uab.cat/stable/3598031#metadata_info_tab_contents
Galve Górriz, C Vicente Salas Fumás (2011), “Family ownership and performance: the net effectof productive efficiency and growth constraints”, Innovar: revista de ciencias administrativas y sociales, 21, 40, 155-170.https://revistas.unal.edu.co/index.php/innovar/article/view/35130/35407
Graham, J.R. (1996), \"Debt and the marginal tax rate\", Journal of Financial Economics 41, 41-73.
Himmelberg, C. P., Hubbard, R.G., & Palia, D. (1999), “Understanding the determinants of managerial ownership and the link between ownership structure and performance”. Journal of Financial Economics, 53, 353- 384.
Jensen, Michael and Kevin Murphy (1990),\"Performance Pay and Top Management Incentives.\" Journal of Political Economy, 98, 2, 225- 63. https://www-jstor-org.are.uab.cat/stable/2937665#metadata_info_tab_contents
La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and R.W. Vishny (2000), \"Agency Problems and Dividend Policies around the World\", Journal of Finance, LV (1), 1-33. https://www-jstor-org.are.uab.cat/stable/222549#metadata_info_tab_contents
LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, andRobert Vishny, 2000, “Investor Protection and Corporate Governance,” Journal of Financial Economics, 58, 3-28.
LaPorta, R., Florencio Lopez-De Silanes, and Andrei Shleifer (1999), “Corporate Ownership Around the World,” Journal of Finance, 54, 471-517. https://www-jstor-org.are.uab.cat/stable/2697717
Malmendier, U. and G. Tate (2005), “CEO Overconfidence and corporate Investment”, Journal of Finance, 60, 2661-700. https://www-jstor-org.are.uab.cat/stable/3694800#metadata_info_tab_contents
Miller, M. and Modigliani, F. (1961), “Dividend policy, growth and the value of shares”, Journal of Business, 34, 411-433.
Miller, M (1977), “Debt and Taxes”, Journal of Finance, 32, 261-275.
Miller, M (1988), “The Modigliani-Miller Proposition after Thirty Years”, Journal of Economic Perspectives, 2, 99-120. https://www-jstor-org.are.uab.cat/stable/1942779#metadata_info_tab_contents
Modigliani F. and Miller, M. (1958), \"The Cost of Capital, Corporation Finance and the Theory of Investment\", American Economic Review, 48, 162-197. https://www-jstor-org.are.uab.cat/stable/1814566?seq=1#metadata_info_tab_contents
Odegaard, Bernt Arne and Oyvind Bohren (2003), “Governance and Performance Revisited” ECGI - Finance Working Paper No. 28/2003; EFA 2003 Annual Conference Paper No. 252 Norwegian School of Management.
Rajan, R. G. and Luigi Zingales (1995), “What Do We Know about Capital Structure: Some Evidence from International Data”, Journal of Finance, 50, 5, 1421-60. https://www-jstor-org.are.uab.cat/stable/2329322#metadata_info_tab_contents
Reid, Alan S. (2003), “The Internationalisation of Corporate Governance Codes of Conduct”, Business Law Review, 24, 10, 233- 2
Software
Microsoft Excel
Course groups and languages
The information provided is provisional until November 30. After this date, you will be able to consult the language of each group through this link. To access the information, you will need to enter the course CODE
| Type of teaching | Group | Language | Semester | Shift |
|---|---|---|---|---|
| (TEm) Theory (master) | 30 | English | second semester | morning-mixed |
| (PLABm) Practical laboratories (master) | 30 | English | second semester | morning-mixed |