Elisabeth Kempf joined Chicago Booth in 2016 as an Assistant Professor of Finance. Her primary research interest is in empirical corporate finance. Her research has explored issues related to corporate governance and sources of skill for financial analysts and fund managers. Her dissertation has been awarded the AQR Top Finance Graduate Award 2016, the WFA Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, the Young Scholars Finance Consortium Best Ph.D. Paper Award, and the 2015 EFA Best Doctoral Tutorial Paper Prize. Her work has been published in the Review of Financial Studies.
Kempf holds a Ph.D. in finance from Tilburg University (Netherlands), an M.Sc. in finance from HEC Paris (France), and a B.Sc. in business administration from the University of Mannheim (Germany). Prior to her Ph.D. studies, she worked as an analyst at Deutsche Bank.
2019 - 2020 Course Schedule
REVISION: Litigating Innovation: Evidence from Securities Class Action Lawsuits
Low-quality securities class action lawsuits disproportionally target firms with valuable innovation output and lead to substantial shareholder-value losses. We establish this fact using data on class action lawsuits between 1996 and 2011 and the value of newly granted patents as a measure of valuable innovation output. Our results challenge the widely-held view that greater failure propensity of innovative firms drives their litigation risk. Instead, our findings suggest that valuable innovation output makes a firm an attractive litigation target. Our results support the view that the class action litigation system may have adverse effects on the competitiveness of the U.S. economy.
REVISION: The Job Rating Game: Revolving Doors and Analyst Incentives
Investment banks frequently hire analysts from rating agencies. While many argue that this "revolving door" creates captured analysts, it can also create incentives to improve accuracy. To study this issue, I construct an original dataset, linking analysts to their career paths and the securitized finance ratings they issue. First, I document that accurate analysts are more frequently hired by underwriting investment banks. Second, I exploit two distinct sources of variation in the likelihood of being hired by a bank. Both indicate that, as this likelihood rises, analyst accuracy improves. The findings suggest policymakers should consider incentive effects alongside capture concerns.
REVISION: Learning by Doing: The Value of Experience and the Origins of Skill for Mutual Fund Managers
Learning by doing matters for professional investors. We develop a new methodology to show that mutual fund managers outperform in industries where they have obtained experience on the job. The key to our identification strategy is that we look "inside' funds and exploit heterogeneity in experience for the same manager at a given point in time across industries. As fund managers become more experienced, they pick better stocks, and their trades become better predictors for abnormal stock returns around subsequent earnings announcements. Our approach identifies experience as a first-order driver of observed mutual fund manager skill.
REVISION: Distracted Shareholders and Corporate Actions
Investor attention matters for corporate actions. Our new identification approach constructs firm-level shareholder "distraction" measures, by exploiting exogenous shocks to unrelated parts of institutional shareholders' portfolios. Firms with "distracted" shareholders are more likely to announce diversifying, value-destroying, acquisitions. They are also more likely to grant opportunistically-timed CEO stock options, more likely to cut dividends, and less likely to fire their CEO for bad performance. Firms with distracted shareholders have abnormally low stock returns. Combined, these patterns are consistent with a model in which the unrelated shock shifts investor attention, leading to a temporary loosening of monitoring constraints.