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The Centre for Applied Finance and Economics (CAFÉ) holds a number of research presentations each month as well as conferences and workshops, which are arranged by Dr Eleni Papagiannaki and Hafiz Rana.

Due to the current climate and Coronavirus pandemic, we have moved to online webinars. 

Upcoming events

Stand Still and Do Nothing: COVID-19 and Stock Returns and Volatility

(CAFE Working Paper 7)

Time:  Wed 10/02/2021 14:00 - 15:30

Online: MS TEAMS

Presenter:  Dr Muhammad Akbar  – Birmingham City Business School


Dr Muhammad Akbar will present his new CAFE Working Paper 7. We examine the intraday returns and volatility in the US equity market amid the COVID-19 pandemic crisis. Our empirical results suggest increase in volatility overtime with mostly negative returns and higher volatility in last trading session of the day. Our Univariate analysis reveal structural break(s) since the first trading halt in March 2020 and that failure to account for this may lead to biased and unstable conditional estimates. Allowing for time varying conditional variance and conditional correlation, our dynamic conditional correlation tests suggest that COVID-19 cases and deaths are jointly related to stock returns and realised volatility.

Macroeconomic impact of public and private R&D networks

Time:  Wed 17/03/2021 14:00 - 15:30

Online: Join Zoom Meeting,

Presenter: Dr Danilo Spinola – Senior Lecturer, Birmingham City Business School


In this paper, we investigate the relative role of public and private R&D as well as R&D collaboration configurations on market and aggregate dynamics, using a macroeconomic model with endogenous technological change, building on the Keynes meets Schumpeter (K+S) family of models (Dosi, Fagiolo, & Roventini, 2010). Our model explains emergent aggregate productivity and economic growth processes from the interaction between public and private actors within a R&D network, and their impact on the creation and diffusion of technology within the economy. In this framework, we study the effect of different industrial policies affecting the weight and position of public actors, the structure of innovation networks and the appropriability of knowledge.Blockchain in the Financial Sector: a discussion on the welfare gains

Blockchain in the Financial Sector: a discussion on the welfare gains and adoption challenges

Time: Wed 07/04/2021 14:00 - 15:30


Presenter: Dr Stefania Paladinia and Dr Erez Yerushalmi – Birmingham City Business School



Past events

Extended audit report, key audit matters and cost of debt

Extended audit report, key audit matters and cost of debt

Time:  Wed 13/01/2021 14:00 - 15:30


Presenter:  Dr Mohamed Elmahoub  – Birmingham City Business School


This study examines the impact of the extended audit reporting (EAR) on the pricing of debt capital. Using an extensive sample of UK firms for the recent 8-year period in which we cover pre- and post-substantial structural changes in the audit market regulation, our results are threefold. First, our findings suggest that an EAR is significantly and negatively associated with the cost of debt. Second, our results indicate that the number and/or length of risk of material misstatements that are disclosed as key audit matters have a significant and positive impact on the cost of debt. Finally, we find that the tone of an EAR is related to the cost of debt, with a net positive tone is negatively associated with the company cost of debt. The results are consistent with our predictions that EAR can reduce the information gap between auditors and financial report users in general, but debt providers in particular.

Capital Structure Choice Under Asymmetric Information and Overconfident Managers

Capital Structure Choice Under Asymmetric Information and Overconfident Managers

Time:  Wed 09/12/2020 16:00 - 17:00


Presenter:  Xiehua Ji (Richard) – Birmingham City Business School

Traditional pecking-order theory (POT) cannot explain why good-quality firms issue equity: this is often considered to be an empirical puzzle. We build a model of capital structure that has elements of both asymmetric information and behavioural finance. Firms have private information about their expected performance. The model also includes overconfident managers. Our model predicts that high-quality firms may issue equity in equilibrium, which contrasts the results in Fairchild (2005). Unlike in Fairchild (2005), managers are not equally overconfident and no exogenously given bankruptcy costs exist in our model. We test our model using a large set of data from the U.S. market and find strong empirical support.

Remote Working and the Crisis

Remote Working and the Crisis

Location: Webinar - platform ZOOM. Please see Bruce's email with ZOOM weblink and password.  (If you want to attend but haven't received Bruce's email, please contact Dr Eleni Papagiannaki and Hafiz Rana).

Time: Wednesday, 29 April, 2-3.30 pm

Presenter:  Dan Wheatly – University of Birmingham

International online lecture: To Panic or to...Panic? Allow your brain to guide you on how to embrace crisis and lead people

International online lecture: To Panic or to...Panic? Allow your brain to guide you on how to embrace crisis and lead people

Date/Time: 15 April 2020, 10 am UK time (11 am Central European time, and 12 pm Eastern European time). 

Place: Online webinar. Registrations open online. Alternatively, go to the Facebook page to book.

Presenter:  Prof. Alexandros Psychogios – Birmingham City University

Criminalizing the purchase of sex: Effects on the sex market, sexual violence and public health

Time: Wednesday 5 February 2020 

Presenter: Dr. Peter Backus – The University of Manchester


Peter Backus and Thien Nguyen

We study the effects of criminalizing participation in the market for sex. This approach to the regulation of the market for sex an approach is often referred to as the Nordic Model of sex market regulation and over the last 20 years has been adopted in a number of countries, including Canada. In 2015, Northern Ireland adopted the Sex Buyer law, the only part of the United Kingdom to do so, and we use this unusual case of a sub-national change in sex market regulation to estimate the causal effects of the criminalization of the purchasing of sexual services. Using newly constructed data sets, our results suggest the Sex Buyer Law reduced the size of the sex market in Northern Ireland and lead to decreases in sexual violence and in rates of sexually transmitted infections. Using panel data on sex market transactions, we find weaker evidence of the law reducing prices. Taken together the evidence suggests that the Sex Buyer Law can have positive effects it may leave sex workers themselves worse off in terms of income.

Imputing the Social Value of Public Healthcare: a General Equilibrium Simulation of Israel

Time: Wednesday 11 December

Presenter: Dr Erez Yerushalmi


General Equilibrium Simulation of Israel

Countries with universal healthcare have experienced a rising demand for healthcare services without a corresponding rise in public supply. This has led to a debate on whether to increase private healthcare services - especially in hospitals and second-tier healthcare. Proponents for increasing private healthcare highlight gains in efficiency and innovation, while opponents emphasize its risk to social welfare. However, the monetary value of these gains and losses is seldom quantified.

The aim of this paper is to impute the minimum social value of public healthcare that corresponds to indifference between gains in economic efficiency with losses to social welfare. To do this, we develop a general equilibrium model that distinguishes between public-private healthcare services and public-private healthcare financing. Our approach resembles contingent valuation methods that introduce a hypothetical market. However, it is different because we use numerical simulation techniques to compare a regulated with a deregulated health-labour market, and the social value is modelled as a byproduct of healthcare services. The model is then calibrated to our unique health-focused Social Accounting Matrix of Israel, and simulates the introduction of a hypothetical health-labour market (which is heavily regulated in the baseline).

Using a Monte-Carlo method, we estimate the minimum social value at around 26% of public healthcare financing. We furthermore simulate a deregulated healthcare scenario that internalizes the imputed value of social value. We show that when assessing the best type of healthcare, policy makers should weigh the economic gains of deregulation with the lost social value. Well-being may even decrease in cases of over-privatization.

Find out more