25 Years IWH

Professor Stefano Colonnello, PhD

Professor Stefano Colonnello, PhD
Current Position

since 9/15

Head of the Research Group Law and Finance

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 9/15

Assistant Professor

Otto von Guericke University Magdeburg

Research Interests

  • empirical corporate finance
  • relationship banking
  • corporate governance
  • law and finance

Stefano Colonnello joined the Department of Financial Markets at the IWH in September 2015. He is also Assistant Professor for Financial Economics at Otto von Guericke University Magdeburg since September 2015.

Stefano Colonnello studied finance at Bocconi University in Milan before joining the PhD program in finance at the École Polytechnique Fédérale de Lausanne and the Swiss Finance Institute. He defended his thesis "Essays in Empirical Corporate Finance" in June 2015.

Your contact

Professor Stefano Colonnello, PhD
Professor Stefano Colonnello, PhD
Mitglied - Department Financial Markets
Send Message +49 345 7753-773 Personal page

Publications

Working Papers

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Direct and Indirect Risk-taking Incentives of Inside Debt

Stefano Colonnello G. Curatola Ngoc Giang Hoang

in: IWH Discussion Papers , No. 20, 2016

Abstract

We develop a model of managerial compensation structure and asset risk choice. The model provides predictions about the relation between credit spreads and different compensation components. First, we show that credit spreads are decreasing in inside debt only if it is unsecured. Second, the relation between credit spreads and equity incentives varies depending on the features of inside debt.

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Internal Governance and Creditor Governance: Evidence from Credit Default Swaps

Stefano Colonnello

in: IWH Discussion Papers , No. 6, 2017

Abstract

I study the relation between internal governance and creditor governance. A deterioration in creditor governance may increase the agency costs of debt and managerial opportunism at the expense of shareholders. I exploit the introduction of credit default swaps (CDS) as a negative shock to creditor governance. I provide evidence consistent with shareholders pushing for a substitution effect between internal governance and creditor governance. Following CDS introduction, CDS firms reduce managerial risk-taking incentives relative to other firms. At the same time, after the start of CDS trading, CDS firms increase managerial wealth-performance sensitivity, board independence, and CEO turnover performance-sensitivity relative to other firms.

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Pricing Sin Stocks: Ethical Preference vs. Risk Aversion

Stefano Colonnello G. Curatola Alessandro Gioffré

in: IWH Discussion Papers , No. 20, 2017

Abstract

We develop a model that reproduces the return and volatility spread between sin and non-sin stocks, where investors trade off dividends with the ethical assessment of companies. We relax the assumption of boycott behaviour and investigate the role played by the dividend share of sin stocks on their return and volatility spread relative to non-sin stocks. We empirically show that the dividend share predicts a positive return and volatility spread. This pattern is reproduced by our model when dividends and ethicalness are complementary goods and investors are sufficiently risk averse.

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