Essays in empirical finance

Abstract: “Going Online? The Motive of Firms to Borrow from the Crowd” investigates firms’ motivation to seek crowdlending using a novel Swedish dataset. Firms that borrow from the crowd have higher growth rates and external financing demand, but lower tangibility and fewer available assets to pledge as collateral, compared with firms that borrow from banks. Interest rates on commercial loans from the crowd are primarily determined by firms’ credit and financial information.“Monetary Policy, Lending Standard, and Bank Risk-Taking: Evidence from the Swedish Mortgage Market” finds a shift of the composition of credit supply towards risky borrowers under the low-rate environment. However, the effect of policy rates on risk-taking is heterogeneous across banks depending on their stressed-rate settings, which are used to determine credit limits and may reflect banks’ business models.“House Prices, Home Equity, and Personal Debt Composition” studies the dynamics of personal debt composition in response to house price changes, using a monthly panel of Swedish individuals’ debt balances. Homeowners reoptimize their debt structure by using home equity to pay down more expensive non-mortgage debt during a housing boom. Entrepreneurial financing is also an important usage of home equity.  “Entrepreneurs’ Foreign Experience, Cultural Proximity, and Venture Capital Investments” shows that foreign VC-backed ventures perform poorly on average in China, but have higher success rates if their founders are returnees. Entrepreneurs’ foreign experience increases cultural proximity between VCs and portfolio forms, and mitigates foreign VCs’ disadvantages in information collection and monitoring.