Conference on the Role of Government Regulation in Corporate Finance
October 10, 2009

The role of government in corporate financial decisions is far reaching. It ranges from tax policy that affects financial structure and profitability, to regulation of new issues, to disclosure requirements, to governance standards, and to a variety of other corporate behavior. Interest in the role of regulation in corporate finance has been fueled by the Enron scandal of 2001 and more recently by the banking crisis and the bailout of AIG. These events have led to renewed calls for increased government regulation of corporate governance, executive compensation, firm investment and financing policies and more comprehensive regulation of financial intermediaries. These developments represent a significant departure from US government policy of deregulation that held sway in the 1970s, 80s and 90s and raise questions about whether the pendulum could swing too far in the direction of overregulation. To the extent that government policy impacts corporations, it is reasonable to argue that corporations, in turn, will attempt to influence government policy via lobbying and other methods.

The purpose of this conference is to bring together researchers in economics, finance, financial accounting, law, and the political science to analyze the effect of government regulation in corporate finance issues and the corporate responses to these regulatory changes. The conference is sponsored by the Financial Markets Research Center at Vanderbilt University. The conference will be held at the Owen School, Vanderbilt University.

Each presentation is 25 minutes followed by a 10 minute general discussion

7:45am – 8:45am: Breakfast

8:45am – 9:00am: Welcoming Remarks – Hans Stoll, Owen School, Vanderbilt University

Session 1 Chaired by Peter Rousseau, Vanderbilt Department of Economics

9:00am – 10:45am: The effect of regulatory environment on firm policies and economic growth

  • Vojislav Maksimovic, University of Maryland “Issues of financing and corruption in developing countries”
  • Simon Gervais, Duke University “Legal protection in retail financial markets”
  • Ross Levine, Brown University “Big bad banks: The winners and losers from bank deregulation in the United States”

10:45am – 11:15am: Break

Session 2 Chaired by Jacob Sagi, Owen School, Vanderbilt University

11:15am – 12:25pm: Regulation of Financial Intermediaries

  • Christian Lundblad, University of North Carolina “Regulatory pressure and fire sales in the corporate bond market”
  • Amit Seru, University of Chicago “Financial regulation and securitization: Evidence from subprime loans”

12:30pm – 1:30pm: Luncheon

Session 3 Chaired by Randall Thomas, Vanderbilt University Law School

1:30pm – 2:40pm: The value of political connections

  • Alexei Ovtchinnikov, Vanderbilt University “Corporate political contributions and stock returns”
  • Eitan Goldman, Indiana University “Political connections and the allocation of procurement contracts”

2:40pm – 3:00pm: Break

Session 4 Chaired by Alexei Ovtchinnikov, Owen School, Vanderbilt University

3:00pm – 4:10pm: Corporate Lobbying

  • Felix Meschke, University of Minnesota “Corporate political contributions: Investment or agency?”
  • Hui Chen, University of Colorado “Corporate lobbying and financial performance”

4:10pm – 4:30pm: Closing Remarks – Michael Bradley, Duke University