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) - (February 2024)
Abstract (click to expand): This paper studies whether recessions damage firms' customer capital. Our main finding is that financially constrained firms are less likely to resume selling to customers that stopped trading during the 2008-9 collapse in international trade. We use a French reform that restricted trade credit use to identify the causal effect of financial constraints. Our findings indicate that customers face lower supplier switching costs after periods of low trade activity. Therefore, firms reinvest in customer capital after recessions to have their customers return, leading financially constrained firms to recover less quickly from aggregate downturns.
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 (2nd round)
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)
R&R Review of Financial Studies (1st round)
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, EFA, AFA.
Press coverage: Delve (podcast), Knowledge at Wharton
with David Schumacher (McGill) and Gregory Weitzner (McGill) - (November 2023)
Abstract (click to expand): What is the importance of relationship lending in public corporate bond markets? To study this question, we analyze firms' decisions whether to call their bonds and impose a loss on their existing bondholders. We show that after a call, existing bondholders are far less likely to participate in the firm’s subsequent bond issuances, where the effects are strongest for funds from large families. Firms fail to replace those bondholders with observably equivalent ones, leading to a deterioration in their bondholder bases. In turn, firms delay calling their bonds when they have more funds from large families in their bondholder base in order to preserve these relationships. Finally, we show that firms' borrowing costs are affected by their historical call policies. Our results highlight the importance of relationship lending in public markets and show how call policy can build and sustain bondholder relationships.
Press coverage: FinReg blog
Selected presentations: U Dauphine, Banque de France, U Laval, U York.
with Johan Hombert (HEC Paris) and Adrien Matray (Stanford GSB) - (November 2023)
Abstract (click to expand): 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.
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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