Università Cattolica del Sacro Cuore


The Finance group is made of researchers interested in theoretical and empirical financial economics, with an emphasis on banking, corporate finance, and asset pricing. Their work includes papers published in several significant academic journals (among them, Journal of Business Finance & Accounting, Journal of Financial Services Research, European Accounting Review, Journal of Financial Intermediation, International Journal of Central Banking, Journal of Financial Stability, Journal of Banking and Finance, Journal of Corporate Finance, Journal of Empirical Finance, Journal of Economic Dynamics and Control, Management Science, and Quantitative Finance).

Research Topics

  • Management of Financial Institutions 
    Economies of scale and scope in banking; leverage procyclicality; mergers & acquisitions; lending policies; supervision and prudential regulation of banks.
  • Accounting and Financial Institutions 
    Interfaces between accounting principles and bank management; earnings management and conservatism; analysts forecasts.
  • The Industrial Organization of Banking 
    Models of monopolistic competition for banks; models of bank branching and entry; mergers & acquisitions in the banking sector; deregulation and bank market structure.
  • Theory of Financial Intermediation 
    Diversification and incentives to monitor; multiple lending; bank/firm cross-shareholdings.
  • Micro Prudential Regulation of Banks 
    Macro shocks and capital regulation; securitization and optimal regulation of banks; optimal executive compensation in banks.
  • Industrial Organization and Corporate Finance (Debt Contracts with Collateral) 
    Credit  and product market competition; resale value of collateralized assets.
  • Corporate Governance & Shareholder Activism 
    Examination of the impact of European corporate raiders; hedge fund activism; interlocking directorates and firm value; determinants of the Voting Premium in Italy; relationship between the target firm’s minority shareholders’ returns and a country’s stock market development in deals in which controlling shareholders increase their ownership stakes; executive compensation.
  • Family firms 
    Family control and acquisition decisions; family control and financing decisions; family firms’ response to the financial crisis; impact of family control and institutional investors on CEO pay packages in Continental Europe.
  • M&A 
    Role of family control in acquisitions decisions; overconfidence and acquisitions in high and low market valuation periods; asymmetric information and target firm returns; the role of CEO risk-taking incentives in acquisition investments; going-private transactions; political contributions and acquisitions.
  • Working capital management 
    Working capital management and firm value; efficient deployment of corporate assets and executive compensation.
  • Credit Risk 
    Equity-based credit risk models take as primitive the most liquid and observable part of a public firm’s capital structure. They depart from reduced-form models and help overcoming a number of problems suffered by structural models in credit-risk management, pricing, and hedging applications.
  • Asset Pricing with Long-Run Risks 
    Equilibrium models that generate linearity in log dividend strip values can generate a non-linearity in the stock's log price-dividend ratio that is increasing in the persistence of the fundamental factors. The ability of such models to entail countercyclical stock volatility and convex countercyclical risk premia is also studied.
  • Dynamic Portfolio Choice 
    Models of intertemporal asset allocation are used to examine why rational non-myopic investors may take conspicuous levered exposures to default risk. The impact of the joint presence of default risk and systemic risk on optimal dynamic multi-asset portfolio choice is also under analysis.
  • Derivatives Pricing 
    The aim is to extend the standard optimal exercise properties for American options and to examine the exact necessary/sufficient conditions that empower optimal early exercise of an American call with a negative underlying payout rate. Applications include the implicit options of popular secured loans and some relevant capital budgeting problems.
  • Commodities Futures Pricing 
    The term structure of commodities futures prices contains important information about risk premia and the equilibrium stochastic discount factor.


Presentation of the Research Group