Rady School of Management
Financial architecture and corporate investment
Assistant Professor of Finance
Champonnois' main research interests are corporate finance, international finance and industrial organization. He received his Ph.D. in economics from Princeton University. He was a Lamfalussy Fellow at the European Central Bank in 2005. While at Princeton, he served as a teaching assistant on courses dealing with corporate finance and accounting, international macroeconomics and the regulation of international financial markets.
PapersComparing Financial Systems: A Structural Analysis (2010)
Industries with small firms (compared to industries with large firms) raise more market finance (relative to intermediated) in the UK than in Italy or Spain. Using a structural model, this implies that the cost of market finance (relative to intermediated finance) is lower in the UK than in Italy or Spain. In particular, the model controls for financing frictions and endogenous firm sizes and shows that industries with small ﬁrms raise disproportionately more market ﬁnance (relative to intermediated ﬁnance) in countries with a lower relative cost of market ﬁnance.
The competition between banks propagates and amplifies shocks through adverse feedback loops on the liability and asset sides of banks. We characterize how the central bank can mitigate the vulnerability of the economy through a bank lending channel (interest-rate policy) or direct interventions in the banking sector (balance-sheet policies).
The risk-taking by entrepreneurs and the demand for risky securities by risk-neutral fund managers are mutually reinforcing: risk-neutral fund managers benefit more from the upside of risk than risk-averse investors and they induce more risk-taking. A high supply of risky assets with low risk premium takes place when the aggregate risk-aversion is low.
Work in ProgressUnverifiable Risk, Bank Competition and the Resilience of the Financial sector (2010)
When bank loan contracts are incomplete and the entrepreneur's risk decision is not describable ex ante and verifiable ex post ("unverifiable risk"), aggregate risk is higher and the financial sector is more vulnerable to adverse shocks. An increase in bank competition mitigates the risk-shifting incentives and improves the resilience of the financial sector.
The Impact of Financial Integration on Investment and Financing