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
Working Papers
with Clémence Lenoir (DG Trésor) - (June 2023)
Abstract (click to expand): This paper studies how financing frictions affect firms' ability to acquire and retain customers during aggregate downturns. Exploiting a French reform that restricted trade credit supply for domestic customers as a liquidity shock, we show that liquidity-constrained firms export 2% less after the 2008-9 global trade collapse. The effects of the liquidity shock are stronger for trade relationships interrupted during the global trade collapse, suggesting that firms must reinvest in their trade relationships to get their customers back after periods of low trade activity. Hence, liquidity constraints amplify the firm-level impact of aggregate downturns by preventing firms from reinvesting in customer capital. Firms invest in customer loyalty notably by upgrading product quality.
Selected presentations: GEP/CEPR, EFA, FIRS, NFA (Best Ph.D. Paper), SFS Cavalcade.
Press coverage: VoxFi
with Camille Hebert (University of Toronto) and Victor Lyonnet (OSU) - (Sep 2023)
R&R Review of Financial Studies
Abstract (click to expand): 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.
Selected presentations: ECGC (Best Ph.D. Paper), Mitsui Finance Symposium, NFA, AFA, SFS Cavalcade,
Junior WEFI, MFA, FIRS.
Press coverage: Rotman Insights Hub
with Huan Tang (LSE) and Eric Vansteenberghe (PSE) - (July 2023)
Abstract (click to expand): 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 FinTech borrowers experience a 20% increase in bank credit following FinTech loan origination. We establish causality using a shift-share instrument exploiting firms’ differential exposure to banks’ collateral requirements. The credit expansion 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 their total borrowing capacity.
Selected presentations: Junior WEFI, ENTFIN, WFA ECWFC, Annual IMF Macro-Finance Research Conference, EIEF Junior Finance Conference (2022), EFA (2022), AFA (2023).
Press coverage: Delve (podcast)
with David Schumacher (McGill) and Gregory Weitzner (McGill) - (September 2023)
Abstract (click to expand): When a firm refinances a bond by calling it, existing bondholders are forced to sell their bonds back to the firm at a below-market price. Do these bondholders replace the bond that was just called by buying the newly issued one? This paper shows that calls have a large impact on firms' bondholder relationships. After a call, existing bondholders are far less likely to participate in the firm’s subsequent bond issuances. Funds that are most valuable to firms (i.e., top bondholders or large funds) are more likely to exit, consistent with them exerting market power. In turn, firms are more likely to delay calling their bonds when they have more attractive investors in their bondholder base. Finally, we show that firms' borrowing costs are affected by their reputation for call delays. Our results show how call policies affect firm/bondholder relationships and highlight the role of both firm and investor reputation in financial markets.
Permanent Working Papers
with Thibault Libert (ACPR/PSE) and Christophe Hurlin (Université d'Orléans).
Abstract (click to expand): 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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