Gosia Ryduchowska

I earned my Ph.D. from the London School of Economics and Political Science in 2019. My research interests lie in the area of corporate finance. Using empirical settings I study how financial constraints shape firm investment, labour allocation, and innovation. I am also interested in distressed firms and restructuring efficiency.

Reseach Interests

corporate finance, ownership, innovation

Working Papers

• Strategic overbidding in procurement auctions?

I find evidence that cash constrained firms compromise long-term profitability to improve their short-term liquidity. I document that constrained firms overbid in government procurement when market conditions deteriorate. New contracts improve short-term cash flows, but result in lower long-term profits. I provide an unbiased estimate of the drop in performance of winners following an award by measuring performance relative to companies which placed second in the auction. I show that financial constraints predict aggressive bidding, that firms overbid less in auctions that require larger deposits, and that winning long-term contracts causes a short-term increase and subsequent decline in profitability. My results offer a non-behavioural explanation for the ``winner's curse''.

• The role of local banking in timing of investment. (with K. Kalisiak)

We show that access to local financing affects firms' investment timing decisions. Firms in areas with better-developed local banking sectors respond earlier to future improvement in investment opportunities. They start new investments at the time the improvement is announced. Other firms catch up only after the improvement and associated cash flows are realized. We exploit variation caused by infrastructure development in the oil industry that exogenously affects firms in only one region and use nearby regions as control. The event creates a gap between announcement and realization dates in which credit demand increases, but credit supply stays unchanged. This specific structure highlights the role of financial constraints and eliminates the problem of reverse causality.

Work in progress

• The impact of uncertainty on labour reallocation and firm employment decisions. (with S. Wang)

• Restructuring outcomes under common debt ownership. (with M. Groen-Xu)