Lecturer (Assistant Prof.) in Finance
School of Accounting and Finance, University of Bristol. Research interests
Contact
g.ordonez-calafi[at]bristol.ac.uk University of Bristol 15-19 Tyndalls Park Rd Bristol, BS8 1PQ, UK |
Research Papers
Mutual funds' strategic voting on environmental and social issues (with Roni Michaely and Silvina Rubio), R&R Review of Finance
Blockholder Disclosure Thresholds and Hedge Fund Activism (with Dan Bernhardt), Journal of Financial and Quantitative Analysis, 2022
Stock Selling During Takeovers (with John Thanassoulis), Journal of Corporate Finance, 2020
Competing Under Financial Constraints
- Abstract: Environmental and social (ES) funds in non-ES families must balance incorporating the stakeholder’s interests they advertise and maximizing shareholder value favored by their families. We find that these funds support ES proposals that are far from the majority threshold, while opposing them when their vote is more likely to be pivotal, consistent with greenwashing. This strategic voting is not exhibited in governance proposals, by ES funds in ES families or by non-ES funds in non-ES families, reinforcing the notion of strategic voting to accommodate family preferences while appearing to meet the fiduciaries responsibilities of the funds.
- Previous title: 'ES Votes that Matter'
- Featured at The FinReg Blog
Blockholder Disclosure Thresholds and Hedge Fund Activism (with Dan Bernhardt), Journal of Financial and Quantitative Analysis, 2022
- Abstract: Blockholder disclosure thresholds shape incentives for hedge fund activism, which are jointly determined with real investment and managerial behavior. Uninformed investors value lower thresholds (more transparency) when the cost of trading against an informed activist outweighs the benefits of the activist's disciplining of management. Conversely, activists may desire disclosure thresholds if the threat of their participation discourages managerial malfeasance, which is their source of profits. Hedge fund activism can be excessive: if market opacity sufficiently harms uninformed investors, the costs of reduced real investment outweigh the social benefits from managerial disciplining, and society benefits from lower thresholds.
- Comments on the SEC's proposed rule on 'Reporting Threshold for Institutional Investment Managers' [letter]
Stock Selling During Takeovers (with John Thanassoulis), Journal of Corporate Finance, 2020
- Abstract: Stock sales during takeover negotiations weaken the target Board's ability to recommend against the takeover, i.e., to resist. Sophisticated shareholders therefore face a coordination problem when deciding whether to sell-out early; and their actions generate a feedback loop between trading volumes and takeover outcomes. Bidding firms, anticipating the pressurising effect of future share sales on the target Board, may reduce their bids. We study these tensions theoretically. We find that increasing the influence of shareholders during the bidding process lowers equilibrium bids; elongates the bidding process; but raises the overall probability of bid acceptance; and raises expected premia for unsophisticated shareholders.
Competing Under Financial Constraints
- Abstract: Firms' debt capacity affects their ability to compete in the product market, and the competitiveness of firms in the product market determines their ability to secure debt. I model the endogenous relation between product market competition and financial constraints by characterizing a trade credit transaction where a competitive retailer has incentives to not honour the debt extended by its supplier. With linear input prices, credit rationing arises endogenously in equilibrium if competitive pressure is sufficiently strong. I show that a financially constrained retailer faces lower input prices, and it can make higher profits due to its own financial constraints. With non-linear prices, the retailer might never be constrained, even though contractual frictions affect market outcomes.
In progress
- Rollover Risk, Commitment and Liquidity Regulation (with Toni Ahnert)
- Hedge Fund Activists' Allies