When prosecutors, courts, and regulators make charging and sentencing decisions, they must evaluate whether firms have effective compliance programs. Such evaluations are difficult because of the challenges associated with measuring effectiveness. Notably, these... View Details

We document a strong effect of pension and insurance company (P&I) assets on the long end of the yield curve. Using data from 26 countries, the yield spread between 30-year and 10-year government bond yields is negatively related to the ratio of pension assets (in... View Details

We find that deviations from the covered interest rate parity (CIP) condition imply large, persistent, and systematic arbitrage opportunities in one of the largest asset markets in the world. Contrary to the common view, these deviations for major currencies are not... View Details

Market imperfections are central to understanding the mechanisms that permit firms to capture value. Many of these imperfections are competed away when firms struggle to attain and defend competitive advantages, making markets more efficient in the process. The... View Details

This working paper provides a new perspective on how businesses have responded to political risk in South Asia and Latin America over the last half century. The existing business history literature on political risk is focused on the experiences of Western... View Details

Most leaders view employee freedoms and operational controls as antagonists in a tug-of-war. They tend to focus on regulating workers’ behavior, often putting a damper on commitment, innovation, and performance without realizing it. But freedom and control aren’t zero... View Details

In the battle for control over China Vanke, the Chinese securities regulator steps in to censure Vanke and Baoneng for acting against the interests of the market and minority shareholders. The Chinese insurance regulator also finds Baoneng to be in violation of... View Details

Through the challenges facing Target, the case examines the ways in which corporations can become involved in political and legislative debates and processes, ranging from campaign contributions to lobbying. In 2016, Target CEO Brian Cornell must determine how to... View Details

In early 2017, HCA Holdings, an investor-owned hospital management company, faced a strategically important capital allocation decision. After the exit of its private equity sponsors in 2016, HCA had to determine how best to allocate its substantial annual free cash... View Details

This working paper examines the history of organic wine, which provides a case study of failed category creation. The modern organic wine industry emerged during the 1970s in the United States and Western Europe, but it struggled to gain traction compared to other... View Details

In the early 1960s, a popular drug taken by patients worldwide for a range of maladies was found to cause severe birth defects and other health problems in babies born to mothers who had taken it during a certain stage of fetal development. As many as 10,000 children... View Details

The case describes the impact of Norsk Gjenvinning's (NG) transformation efforts on reducing corruption and non-compliance within the Norwegian waste management industry. View Details

Managers make predictions all the time: How fast will my markets grow? How much inventory do I need? How intensively should I monitor my suppliers? Which potential customers will be most responsive to a particular marketing campaign? Which job candidates should I... View Details

In 2017, JetBlue, the airline founded on the mission to “bring humanity back to air travel,” was considering becoming one of the first companies to report its sustainability performance according to the Sustainability Accounting Standards Board (SASB) standards. SASB... View Details

Although Indian tribes and the surrounding states were often bitter enemies throughout much of the history of the United States, recently tribes and states have been able to work cooperatively in a number of areas. In some instances, Congress has mandated such... View Details

We propose three core principles that should inform the design of bank capital regulation. First, wherever possible, multiple constraints on the minimum level of equity capital should be consolidated into a single constraint. This helps to avoid a distortionary... View Details

As a global energy generating company, AES frequently faces challenges from political changes and instability. This is exacerbated by the fact that in many instances AES' primary customer is the government, which is also in charge of law-making. For example, AES'... View Details

In early 2016, RWE, a utility that operates nuclear power plants in Germany, came under scrutiny from regulators and the media over the adequacy of its provisions for costs of decommissioning and dismantling (D&D) its nuclear power plants. Accounting standards required... View Details

Teaching Note for HBS No. 718-008. View Details