Finance Seminar（2016-11）

Topic:Financing Intangible Capital

Speaker:Mindy X. Zhang, The University of Texas at Austin

Time:Wednesday, 11 May, 10:00-11:30

Place:Room 217, Guanghua Building 2

Abstract:

Firms finance intangible investment through employee compensation contracts. In a dynamic model in which intangible capital is embodied in a firm's employees, we analyze the firm's optimal decisions of intangible investment, employee compensation contracts, and financial leverage. Employee financing is achieved by delaying wage payments in the form of future claims. We document that intangible capital investment is highly correlated with employee financing, but not with debt issuance or regular equity refinancing. In the quantitative analysis, we show that this new channel of employee financing can explain the cross-industry differences in leverage and financing patterns.

Introduction:

Dr. Mindy Xiaolan Zhang is an assistant professor of finance at McCombs School of Business. She received her Ph.D. in Finance from the University of California, Los Angeles in 2014. She conducts research at the intersection between macroeconomics and finance. Specifically, she works on macro finance, equilibrium asset pricing, dynamic contracting, dynamic corporate theory, labor and finance.

//www.mccombs.utexas.edu/Directory/Profiles/Zhang-Xiaolan

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