Maria Chaderina   

(CV)

 
 

Corporate Finance, Financial Frictions, Financial intermediation, Market Microstructure

 

Areas of Interest

PhD, Financial Economics

Joining WU (Vienna University of Economics and Business) as Assistant Professor in August 2013

Working Papers

The Pre-Borrowing Motive: A Model of Coexistent Debt and Cash Holdings (May 2013)


This paper demonstrates how costly default gives rise to the risk-averse type of behavior by firms. Firms are exposed to the risk of change in the terms of borrowing. With costly default, firms are better off hedging this risk. Hedging motivates firms to borrow earlier with long term debt and keep proceeds in cash until the funds are needed. The finding is novel in the light that the result does not rely on collateral constraints. We examine full implications of the pre-borrowing motive in the dynamic neo-classical model of the firm and characterize optimal borrowing and cash holding policies. In a calibrated version of the model, levels of cash holdings are consistent with that observed in data.

Education

BSc in Economics, UoL (London School of Economics)

BSc in Economics, HSE (International College of Economics and Finance)

MSc in Financial Economics, CMU (Tepper School of Business)

PhD in Financial Economics, CMU (Tepper School of Business)

Predatory-Prey dynamics and Employment Cycles on Wall Street with Richard Green (May 2013)


Much of the activity in sectors of financial services such as sales and trading or the hedge-fund industry is zero-sum in nature. Along with providing transactional and diversification services, participants in this industry also prey upon each other. High-ability traders (predators) capture surplus at the expense of less able and experienced traders (prey). We show that in a dynamic model of such an industry, multiple equilibria emerge due to participation externalities. In the model, traders are randomly matched each period. The presence of more low-ability traders protects others from predation by high-ability traders, leading to equilibrium at a high level of employment. Shocks to aggregate profits may trigger exit by those of the lowest ability, which in turn exposes those of intermediate ability to greater risk of predation and motivating their exit. This leads to a collapse in employment. Depending on parameter values, the industry may remain stuck at the low employment level. In other cases it may, once profits recover, begin rapid growth towards the high employment level until this growth is interrupted by another bad shock. Thus, our relatively simple model generates boom-bust cycles reminiscent of Wall Street employment.

Co-existence of Cash and Debt (May 2013)


I document empirical evidence on the co-existence of debt and cash holdings on balance sheets of public US non-financial firms. On average, more than 5% of firms keep more than 20% of their assets in cash while more than 20% of their assets are financed with debt. Cash also appears to co-exist with Long-Term debt as opposed to Short-term debt. In the panel regressions of cash holdings on firm characteristics, cash flow volatility comes positive and significant, for both subsamples of likely to be financially constrained and unconstrained firms. I introduce market to book volatility measure as a proxy for sensitivity of the firm value to news. It is positive and statistically significant for both constrained and unconstrained firms, controlling for other determinants of cash holdings.