Dec 32, 2021

Unfortunately, Omicron has just virtualized us.


UCLA Anderson 254-01, Winter 2022
Empirical Corporate Finance (PhD)

Instructor: Ivo Welch

Meeting Times
WF 14:35-16:00.
Zoom Id: 964 8870 4773 (password required, see Bruinlearn or email).
20 sessions planned; more possible next quarter if there is student demand.

New Room Assignment: C303. 1:30pm. (we may have to wait up to 10 min for previous class to exit.)

During class, please extend me the courtesy of turning on your video. I do not want to talk to a wall of black squares.

The class is not open to unregistered students. Please register.

Class Basics

This class is for PhD students with a research interest in financial economics. It is not advisable for MBA or MFE students. It is far too much pain for too little gain. The workload of this course is twice that of other courses. The course may also extend into the next quarter. Taking this course entails a kind of masochism that is really useful only for PhD students who want to author research in finance and for whom extra sessions are not chores for the sake of a grade, but important learning opportunities.

This is a first-time class for me. If you want a class which is well rehearsed, please take this class when it is offered next instead (or take another class altogether). Of course, Anderson finance phd students don’t have much of a choice, because the class is offered only every other year, but other students do. This year, count on many mishaps. Help me help you.

254-01 is not a lecture class. It is a very small seminar class, hopefully with fewer than 10 students. Most of the time, I will just ask questions. I may walk you through some papers in the beginning to show you how this can be done, but don’t expect me to do this later in the course. Always be prepared to be called upon. Also, please ask questions.

I will cancel sessions when the students have not read the assigned papers. The plan is to assign readings of three to four papers per session, which comes to six to eight papers per week (or fourty to sixty papers for the entire quarter). This is doable. By nature, most empirical corporate finance papers are easier to read than theory papers. We will typically discuss two of the papers per session (40 minutes per paper) and skip one or two. (This may be determined by the spur of the moment.) I ask for referee reports for two papers, so these absolutely need to have been read.

The order of the papers on the syllabus determines the papers that you should prepare for.


You should have read before the class begins:

It would also be good if you had a rudimentary understanding of accounting, taxes, and law.

Finally, you need to understand what Fama-French (Black-Jensen-Scholes) and Fama-Macbeth regressions are. If you do not know, I wrote a gentle introduction for my ASAM students.


See meta aspects about economic research.


See readings. This is the main part of the course.

Importantly, students need to write a referee report on two papers for each session. Guidelines are here. As author, use not your true name but a synonym (e.g., poodle, claus, frenchie) — and use the same synonym throughout the course. At the end of the course, your referee reports will be made public. Please upload them before the session to here. As file name, please use your synonym. You are allowed to update the report after the session in which the paper was discussed.

Term Paper

See term paper (tables).

Follow Instructions

Please email me a 60-second (< 120-seconds) downloadable mp4 video in which you introduce yourself, your relevant or basic background, and why you are taking this course. Use as subject title “254-01: Personal Introduction YOUR NAME”. Let’s see if you can follow the instructions on the syllabus. 😀

NOTE: Use to compress your video to a reasonable file size, like 480p30. Then upload it to Bruinlearn as your answer to your first assignment. (I think I decided against bruinlearn for uploading referee reports, though.)

Outside-of-Class Communication

Office Hours: Wednesday, 16:30-17:30.

I will try to answer emails of students enrolled in this course within 48 hours. I expect students to extend the same courtesy to me. Always include “254-01” in the title, or your email may be deleted or lost.

If the question can wait until the second half of the course (i.e., February), please hold it. I am teaching another new half-course (on climate change, too. I will have a lot more time and patience when that half-course is over.

There is no TA for this course.


Grading is not harsh, in that every PhD student who tries reasonably hard will get at least a B.

The grading is based on a term paper (1/3), class participation and referee reports (1/3), and a short (1-hour?) final exam (1/3). If there are non-Anderson PhD students in the class, they can be graded without the term paper upon request.

The term paper can be solo or joint. It is the most important aspect of this course for PhD students. For more details, see term paper.


Although the class is scheduled for Winter quarter, we may extend class session into Spring break or Spring quarter, too. If the class extends, I will give grades based on performance by the end of the quarter and further attendance will be optional. (If there is no interest by students to extend into Spring, it will be fine with me. I would only be doing this students’ sake.)

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