Johan Hombert
Professor of Finance, HEC Paris
Director of the HEC Paris PhD Program
Email: hombert@hec.fr
Check out my blog! Short and pedagogical articles connecting ideas from finance classes, academic research, and real-world problems.
I co-organize the HEC Paris Entrepreneurship Workshop help every year in December on the HEC Paris campus. The next call for papers will be out this summer.
Working Papers
Contract Completeness of Company Bylaws and Entrepreneurial Success
with Paul Beaumont and Adrien Matray
Entrepreneurial success is fostered by a 2008 French reform that reduced the cost for entrepreneurs to write more complete contracts with their financiers.
Until the 2008 reform, less than 5% of new firms opted for the corporate legal form that allows firms to write complex bylaws. This share increased above 15% after the reform. We show that, by allowing entrepreneurs to write more complete contracts with investors, the reform fostered entrepreneurial success.
Draft coming soon!
Innovation Booms, Easy Financing, and Human Capital Accumulation
with Adrien Matray
The late 1990s tech bubble attracted many high-skill young workers, who initially enjoyed higher wages. In the long run, however, they end up earning 6% less than individuals who started in other sectors. The long-run wage discount is concentrated in firms that received high capital flow during the bubble.
The figure shows the earnings premium of ICT workers relative to non-ICT workers. Each color is a different cohort of workers. ICT workers who started during the late 1990s technology boom initially enjoyed an earnings premium, which turned into a discount fifteen years out.
Inter-Cohort Risk Sharing with Long-Term Guarantees: Evidence from German Participating Contracts
with Axel Möhlmann and Matthias Weiss
Private implementation of inter-cohort risk sharing in German life insurance contracts. Compared to the French life insurance market analyzed in Hombert and Lyonnet (RFS 2022), long-term guarantees are higher in Germany and lean against inter-cohort risk sharing.
Life insurers use reserves to absorb shocks to the return on assets held (blue) and smooth the return paid to their customers (orange). This smoothing mechanism generates risk sharing between cohorts of investors.
Publications
Can Risk be Shared Across Investor Cohorts? Evidence from a Popular Savings Product
Review of Financial Studies, 2022 (with Victor Lyonnet)
Private implementation of inter-cohort risk sharing on a large scale: savings products sold by life insurers in France transfer 0.8% of GDP across cohorts of investors every year.
Life insurers use reserves to absorb shocks to the return on assets held (red) and smooth the return paid to their customers (blue). This smoothing mechanism generates risk sharing between cohorts of investors.
Incentive Constrained Risk Sharing, Segmentation, and Asset Pricing
with Bruno Biais and Pierre-Olivier Weill
American Economic Review, 2021
When imperfect asset pledgeability creates endogenous borrowing constraints, asset markets are endogenously segmented, assets trade at a discount relative to replicating portfolios of derivatives, and expected excess returns are concave in beta.
Can Unemployment Insurance Spur Entrepreneurial Activity? Evidence from France
with Antoinette Schoar, David Sraer and David Thesmar
Journal of Finance, 2020
Giving unemployment benefits to entrepreneurs leads to the entry of small firms which eventually grow, and fosters creative destruction.
After a 2002 French reform made entrepreneurs eligible to unemployment benefits, business creation increased by 25%. We show that the reform did not decrease the average quality and growth rate of start-ups.
Anticompetitive Vertical Mergers Waves
with Jerome Pouyet and Nicolas Schutz
Journal of Industrial Economics, 2019
Vertical mergers that relax competition.
Can Innovation Help U.S. Manufacturing Firms Escape Import Competition from China?
with Adrien Matray
Journal of Finance, 2018
U.S. manufacturing firms that have invested in R&D are more resilient to trade shocks.
The Competitive Effect of a Bank Megamerger on Credit Supply
with Henri Fraisse and Mathias Le
Journal of Banking and Finance, 2018
A merger between two large European banks reduces credit supply to SMEs.
The Real Effects of Lending Relationships on Innovative Firms and Inventor Mobility
with Adrien Matray
Review of Financial Studies, 2017
Hurting lending relationships stiffles innovation and leads to reallocation of inventors across firms and across states.
News Trading and Speed
with Thierry Foucault and Ioanid Rosu
Journal of Finance, 2016
Traders who observe news faster than others have extremely volatile ("high-frequency") strategies.
Equilibrium Pricing and Trading Volume under Preference Uncertainty
with Bruno Biais and Pierre-Olivier Weill
Review of Economic Studies, 2014
Asset pricing when traders make decisions under preference uncertainty, because their financial firms face challenges collecting, processing, and disseminating information.
Overcoming Limits of Arbitrage: Theory and Evidence
with David Thesmar
Journal of Financial Economics, 2014
Arbitrageurs can choose their capital structure to take advantage of temporary mispricing: theory and evidence.
Upstream Competition between Vertically Integrated Firms
with Marc Bourreau, Jerome Pouyet and Nicolas Schutz
Journal of Industrial Economics, 2011
Competition between vertically integrated firms can fail.
Other Publications
Does Unemployment Insurance Change the Selection into Entrepreneurship?
with Antoinette Schoar, David Sraer and David Thesmar
NBER book Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, 2017
Giving unemployment benefits to entrepreneurs does not deteriorate the success potential of start-ups.
Current and Former PhD Students
Huan Tang London School of Economics (Finance) → Wharton (Finance)
Noémie Pinardon-Touati University of Columbia (Economics)
Chhavi Rastogi International Finance Corporation, World Bank
Marina Traversa Leibniz Institute - SAFE (post-doc)
Antoine Hubert de Fraisse on the job market in 2024-25