Firms liquidity: empirical evidence and inventory model prediction / Mutual funds and market liquidity: a twoway relationship / Strategic timing in politics and media attention: Evidence from Italy

Lun, 14/03/2022 - 13:00 / 14:30

403, Viale Romania

Speaker: Carmelo Genovese , Eleonora Iachini , Giuseppe Spataro , Luiss

Speaker: Carmelo Genovese

Title: Firms liquidity: empirical evidence and inventory model prediction

Abstract

How do firms decide to manage their liquidity? How is it possible to explain the recent increase in firms' liquidity? Liquidity trap? Precautionary behaviour? In this paper I investigate the relationship between firms’ liquidity and macro-financial variables. Starting from the increase in liquidity’s holding, I construct an inventory model to explain the empirical findings. 

 

Speaker: Eleonora Iachini

Title: Mutual funds and market liquidity: a twoway relationship

Abstract

The paper investigates the impact of the relationship between market makers and non-banks on the liquidity of financial markets. Stylized facts suggest that the growing complexity that characterizes the financial system requires further attention and possibly a rethinking of some hypotheses of market microstructure studies on the determinants of market liquidity. Changes in the behaviour of market makers brought about by their increased risk aversion affect market liquidity not only through traditional channels (inventory, asymmetric information and transaction costs), but also through additional channels. We test this hypothesis using a unique data set on trades between primary dealers and mutual funds in both electronic markets and OTC. According to our preliminary results, overall OTC trading with mutual funds in both normal times and under stress tends to reduce liquidity.
 

 

Speaker: Giuseppe Spataro

Title: Strategic timing in politics and media attention: Evidence from Italy

Abstract

This dissertation investigates whether politicians strategically time the date of law approvals to avoid overlaps with other newsworthy events. The analysis focuses on the scheduling of confidence votes in the Italian parliament. First, I constructed with NLP techniques a time series which tracks the amount of political news over total news. Evidence was found that cofidence votes are associated with higher coverage of political news. Additionally, they are less likely to be scheduled in days coinciding with predictable newsworthy events (e.g., major sport events), while there is no statistically significant correlation between the timing of the confidence votes and unpredictable newsworthy events (e.g., natural disasters).  The results are corroborated by heterogenous effects between electoral and caretaker governments. Finally, I test whether the negative relation between confidence votes and predictable newsworthy events might be explained by politicians avoiding scheduling events in the presence of other ones that attract their own attention ("lazy" politicians). All in all, the evidence provided seem consistent with the alternative mechanism, i.e. politicians strategically timing confidence vote to signal the government's cohesion ("signaling" politicians).