Tom Shohfi 
Assistant Professor of Finance and Accounting

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Working Papers

Bank Loan Renegotiation and Credit Default Swaps

with Brian Clark, James Donato, and Bill Francis
October 2017

We find that the inception of CDS trading on reference firms’ debt is associated with a decreased number and lower probability of amendments, restatements, and rollovers to existing lenders of bank loans. Reference firms are also less likely to terminate loans prematurely or refinance with different lenders after the inception of CDS trading and tend to experience shorter loan renegotiations. Evidence is consistent with the “empty creditor” problem arising from CDS trading and the resulting decrease in the negotiation power of borrowers. Our research contributes to understanding how financial innovations alter bank lending relationships.

Bulk Volume Classification and Information Detection

with Marios Panayides and Jared D. Smith
September 2017

We use stock data from Euronext Paris for which we can identify true trade initiators to test the performance of the Lee and Ready ((1991); LR), tick test, and newly developed bulk volume classification (Easley et al. (2015); BVC) algorithms. BVC is data efficient, but has accuracy rates that are lower than the “bulk” tick test/LR at comparable bar sizes. Part of this accuracy underperformance is driven by systematic biases related to both volume and time bar choices, as well as individual stock characteristics. By calibrating the BVC we are able to mitigate, and in some cases alleviate, the accuracy advantage of the bulk tick test. Further, the calibrated BVC is the only algorithm that can detect informative order flow in a variety of tests, indicating the strong advantage of this method in uncovering the underlying trading intentions of informed traders.

The Dark Side of Blockholder Philanthropy

with Roger M. White
November 2017

We examine the market reaction to charitable pledges representing the majority of net worth held by blockholders of public firms. Experimental research suggests that such charity brings benefits, as counterparties grant preferential terms when contracting with philanthropic principals. However, these studies abstract from potential agency problems that could arise if a blockholder’s philanthropy signals a weakening preference for wealth maximization (and is indicative of distraction or relaxed monitoring). We find that these agency costs overwhelm any benefits and are most severe where monitoring needs are high and blockholder monitoring is thought to be strict.

Featured at the Harvard Law School Forum on Corporate Governance and Financial Regulation (December 8th, 2016)

Implications of Buy-Side Analysts' Participation in Public Earnings Conference Calls

with Andy Call and Nate Sharp
October 2017

The Q&A session of public earnings conference calls represents a unique opportunity for stakeholders to interact with senior management. We examine buy-side analysts’ participation on these calls and the associated capital-market implications. Using 81,000 transcripts for 3,300 companies from 2007 to 2016, we find that buy-side analysts ask questions on approximately 18% of calls. Management prioritizes buy-side analysts, but discriminates against analysts from hedge funds when short interest is high. Relative to sell-side analysts, buy-side analysts’ interactions with management are shorter and less favorable. Buy-side appearances are also associated with increases in information asymmetry and reductions in sell-side activity.

Earnings Conference Call-Level Analyst Participation Data (Stata)
Appendix: List of Participant Institution Classifications


  1. Boulton, Thomas J., Thomas D. Shohfi, and Pengcheng Zhu (2018), "Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions", Journal of Small Business Management, Forthcoming.

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©2018 Tom Shohfi