CV and Bio
Welcome to my website! I am an Assistant Professor of Finance at McGill University (Desautels Faculty of Management).
Research interests: Corporate Finance, Entrepreneurship, Labor and Finance, FinTech.
My CV is available here: CV.
Email: paul.beaumont@mcgill.ca
Publications
with Camille Hebert (University of Toronto) and Victor Lyonnet (Michigan Ross)
Review of Financial Studies, forthcoming
Abstract: Firms either enter new sectors by building on their resources or buying existing companies. Using French administrative data, we propose a measure of human capital distance between a firm and a sector of entry. Using a shift-share instrument, we show that firms build in close sectors and buy in distant sectors in terms of human capital distance. Firms build by hiring new workers, which becomes increasingly costly in distant sectors as it requires not only hiring more workers but also having more organizational capital to integrate these workers. Hence, firms buy in distant sectors to acquire already operational human capital.
Press coverage: Rotman Insights Hub
with Huan Tang (Wharton) and Eric Vansteenberghe (PSE)
Review of Financial Studies, conditionally accepted
Abstract: This paper investigates the impact of introducing junior unsecured loans (i.e., FinTech loans) in the small business lending market. Using French administrative data, we find that firms experience a 13% increase in bank credit after receiving a FinTech loan. We use propensity score matching procedures and a shift-share instrument to account for credit demand. The credit increase only occurs when FinTech borrowers invest in new assets, and Fintech borrowers are subsequently more likely to pledge collateral to banks. This suggests that firms use FinTech loans to acquire assets that they then pledge to banks, thereby increasing total borrowing capacity.
Press coverage: Delve (podcast), Knowledge at Wharton
Working Papers
with Clémence Lenoir (DG Trésor) - (January 2025)
Abstract: How do financial constraints impact firms' ability to recover sales after recessions? Financial constraints could cause temporary downturns to have lasting effects if they prevent firms from winning back customers when the economy recovers. Leveraging a French reform as a financing shock, we find that, following the 2008-9 global trade collapse, financially constrained firms export significantly less even years after the recession as they are less likely to regain customers lost during the trade collapse. Financially constrained firms recover fewer customers because they compete less aggressively on quality, suggesting that customers face lower switching costs after trade interruptions.
Selected presentations: GEP/CEPR, EFA, FIRS, NFA (Best Ph.D. Paper), SFS Cavalcade.
Press coverage: VoxFi
with David Schumacher (McGill) and Gregory Weitzner (McGill) - (November 2023)
Abstract: Can relationship lending be sustained in public financial markets? We use firms’ call decisions as a laboratory to study this question. After forcing existing bondholders to sell their bonds back at below market prices, i.e., a fixed-price call, existing bondholders are far less likely to participate in firms’ subsequent bond issuances. The effects are strongest for the firms most valuable bondholders, leading to a deterioration in firms’ bondholder bases. In turn, firms delay calling their bonds when they have more valuable investors in their bondholder base. Finally, firms’ borrowing costs are affected by the reputation they develop from their historical call decisions. Our results reveal the importance of relationship lending in public markets and show how call policy can serve as a mechanism to build and sustain bondholder relationships.
Press coverage: FinReg blog
Selected presentations: U Dauphine, Banque de France, U Laval, U York, Rome Junior Finance Conference, Aarhus Workshop, NFA, FIFI.
with Johan Hombert (HEC Paris) and Adrien Matray (Harvard) - (November 2023)
Abstract: Does reducing the cost for entrepreneurs to write more complete contracts with their financiers enhance entrepreneurial success? To shed light on this question, this paper exploits a 2008 French reform that made it less costly for new firms to choose a legal form allowing more complete financial contracts in the company bylaws. Using comprehensive tax-filing data from 2004 to 2015, we find a marked increase in the adoption of that legal form among new firms, leading to higher growth in capital, labor, and revenues in the first three years after creation. The effects are more pronounced for firms with high marginal returns to capital, suggesting that capital misallocation decreases. Our findings highlight the significant role of legal and financial structures in entrepreneurial success, which has policy implications for promoting entrepreneurship.
Draft available upon request.
Selected presentations: ASU Sonoran, WEFI, UIC Conference, WFA, EFA, NFA, FOM, WashU Conference, Paris Finance December Meetings, Milan JCF Conference, The Law and Finance of PE and VC Conference.
with Adrien Matray (Harvard) and Chenzi Xu (Berkeley) - (September 2024)
Abstract: The increasing availability of microdata has enabled researchers to decompose economic shocks across multiple dimensions, such as breaking down country exports by firms, products, and destinations or analyzing city employment across industries and firms. However, this level of disaggregation presents new empirical challenges, such as accounting for the extensive margin and handling heterogeneous treatment effects when the number of observations varies nonrandomly across agents. Our research demonstrates that standard regressions using log-transformed dependent variables are biased in most settings and can misrepresent the true effects of additional controls on the elasticity of the variable of interest. To address these issues, we propose a new methodology based on the aggregation properties of arc elasticity. This approach is particularly useful for: (i) expressing the total elasticity of a shock as a weighted sum of intensive and extensive margins; (ii) disaggregating data to control for additional unobserved heterogeneity; and (iii) testing for potential spillovers and violations of the Stable Unit Treatment Value Assumption (SUTVA) in a model-free way. Our method provides a robust framework for analyzing highly disaggregated economic data, offering insights that traditional approaches may overlook.
Draft available upon request.
Permanent Working Papers
with Thibault Libert (ACPR/PSE) and Christophe Hurlin (Université d'Orléans).
Abstract: This paper uses a credit registry covering the quasi universe of firm-bank relationships in France for the period 1999-2016 to provide a detailed account of the role of very large borrowers ("granular borrowers") in shaping bank-level and aggregate credit variations. We document that the distribution of borrowers is fat-tailed, the top 100 borrowers representing 18% of aggregate long-term credit and 64% of total undrawn credit lines. We adapt the methodology of Amiti and Weinstein (2018) to identify the contributions of firm, bank, and aggregate shocks to credit variations at any level of aggregation. At the macroeconomic level, we show that aggregate properties of credit largely reflect granular borrowers’ shocks. This finding highlights the limitations of using time series of aggregate credit to assess the magnitude of financial frictions in the economy. At the bank-level, we find that the concentration of the borrower bases of banks exposes them to considerable borrower idiosyncratic risk and leads liquidity flows to be more synchronized across banks.
Other Writings
with Antoine Luciani
Document de travail DESE, 2018
with Antoine Luciani and Ihssane Slimani Houti
Insee Analyses, 2016
Press coverage: Le Monde, Les Echos
Insee Références, 2016
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