Dirk Hackbarth Awarded 2021 Sharpe Award

The Journal of Financial and Quantitative Analysis recently announced Dirk Hackbarth, Professor of Finance, as the winner of the 2021 William F. Sharpe Award for Scholarship in Financial Research.

Dirk Hackbarth

Hackbarth and his co-authors received the award for their article “Granularity of Corporate Debt”. In this article, they study whether firms spread out debt-maturity dates, which they call granularity of corporate debt. In their model, firms that are unable to roll over expiring debt need to liquidate assets. If multiple small asset sales are less inefficient than a single large one, it can be optimal to diversify debt rollovers across time. Using a large sample of corporate bond issuers during the 1991–2012 period, they establish novel stylized facts and evidence consistent with their model’s predictions. There is substantial heterogeneity (i.e., firms have both concentrated and dispersed debt structures). Debt maturities are more dispersed for larger and more mature firms and for firms with better investment opportunities, higher leverage, and lower profitability. During the recent financial crisis, firms with valuable investment opportunities implemented more dispersed maturity structures. Finally, firms manage granularity actively and adjust toward target levels.

The William F. Sharpe Award for Scholarship in Financial Research recognizes researchers who, through their articles published in the JFQA, have most contributed to the understanding of important areas of financial economics. Nominees for the Sharpe Award are chosen by a vote of JFQA readers and Associate Editors. The final selection is made by JFQA Managing Editors.

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