Please read the paper by Cerqueiro, Ongena, and Roszbach and answer the following questions:
What is the paper’s research question? What is the paper’s main identification challenge in addressing the question of interest? Explain your answer
Why the change in the law in 2004 allows the authors to overcome their main identification challenge? How the change in the law in 2004 is expected to influence the variables of interest? Explain why?
Explain the methodology that the authors use to address the research question. Make sure to include the following elements?
o What type of methodology do they apply (relate it back to the course)
o What is their treatment group and what is their control group?
o Write down and explain their main empirical specification (eq. 1)
o How do the authors deal with the fact that treatment and control firms maybe different
(i.e., firms that pledge a floating charge may be different than firms that do not)?
o What evidence do the authors provide to justify the internal validity of their
identification strategy
Your answers to these questions should NOT exceed one page in total and you should not just copy the text in the paper. Irrelevant facts will be marked negatively
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