Doctoral Defence: “Essays on Economics of Investment and Lending”

February 11, 2022

On 18 February, Timo Autio, MSc will defend his doctoral dissertation ”Essays on Economics of Investment and Lending”.  

The dissertation examines questions of investment and lending from three different perspectives, aiming to shed light on how existing financial infrastructure influences decisions and outcomes of market participants.

In the first essay, he studies the impact of individual venture capital investors on their portfolio companies. By using comprehensive venture capital investment data from Finland and linking them to the rich Finnish microdata on companies and individuals, he finds evidence that venture capital investors contribute to the increased growth of their portfolio companies. This effect comes particularly through growth in the number of employees, but study also provides tentative support for increased patenting activity.

The second essay (joint with Marco Casiraghi and Marta Giagheddu) studies whether Italian government debt issuance crowded-out small- and medium-sized enterprises (‘SME’) from the loan markets at the height of the government debt crisis, 2011-2012. The essay finds that the government debt issuance indeed crowds-out SMEs from the loan market. Furthermore, they show that the ECB’s actions through long-term refinancing operations effectively normalized the lending conditions.

The third essay analyzes an incentive discrepancy between a stock investor and a stockbroker. Using a theoretical framework, he shows that if an investor has a limited capacity to process information there are situations when the investor can be better off by taking stock recommendations from a broker, even though the broker would aim to maximize the amount of trading.