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  • Research Summary

Explaining Returns With Cash-Flow Proxies (with Tuomo Vuolteenaho)

Stock returns are correlated with contemporaneous earnings growth, dividend growth, future real activity, and other cash-flow proxies. The correlation between cash-flow proxies and stock returns may arise from association of cash-flow proxies with one-period expected... View Details
  • 2013
  • Working Paper

Separating Homophily and Peer Influence with Latent Space

By: Joseph P. Davin, Sunil Gupta and Mikolaj Jan Piskorski
We study the impact of peer behavior on the adoption of mobile apps in a social network. To identify social influence properly, we introduce latent space as an approach to control for latent homophily, the idea that "birds of a feather flock together." In a series of... View Details
Keywords: Social Influence; Social Network; Mobile App; Peer Effects; Latent Homophily; Latent Space; Proxy Variables; Familiarity; Behavior; Consumer Behavior; Applications and Software; Social and Collaborative Networks; Mobile and Wireless Technology; Power and Influence; Social Media
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  • 20 Oct 2015
  • First Look

October 20, 2015

prominent feature of the corporate landscape, escaping some of their earlier approbation as corporate raiders or, even worse, "greenmailers." Activism covered a range of approaches—from proxy votes and demands for Board seats,... View Details
Keywords: Sean Silverthorne
  • 2025
  • Working Paper

Enhancing Treatment Effect Prediction on Privacy-Protected Data: An Honest Post-Processing Approach

By: Ta-Wei Huang and Eva Ascarza
As firms increasingly rely on customer data for personalization, concerns over privacy and regulatory compliance have grown. Local Differential Privacy (LDP) offers strong individual-level protection by injecting noise into data before collection. While... View Details
Keywords: Targeted Intervention; Conditional Average Treatment Effect Estimation; Differential Privacy; Honest Estimation; Post-processing; Analytics and Data Science; Consumer Behavior; Marketing
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  • April 2024
  • Article

Demand-and-Supply Imbalance Risk and Long-Term Swap Spreads

By: Samuel G. Hanson, Aytek Malkhozov and Gyuri Venter
We develop and test a model in which swap spreads are determined by end users' demand for and constrained intermediaries’ supply of long-term interest rate swaps. Swap spreads reflect compensation both for using scarce intermediary capital and for bearing convergence... View Details
Keywords: Swap Spreads; Credit Derivatives and Swaps; Interest Rates; Risk and Uncertainty; Volatility
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  • December 2008
  • Article

Corporate Governance and Agency Conflicts

By: Aiyesha Dey
I investigate whether corporate governance is associated with the level of agency conflicts in firms. I employ exploratory principal components analysis on 22 individual governance variables to obtain seven factors that represent the different dimensions of governance... View Details
Keywords: Corporate Governance; Agency Theory
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  • 2017
  • Article

Inflation Bets or Deflation Hedges? The Changing Risks of Nominal Bonds

By: John Y. Campbell, Adi Sunderam and Luis M. Viceira
The covariance between U.S. Treasury bond returns and stock returns has moved considerably over time. While it was slightly positive on average in the period 1953–2009, it was unusually high in the early 1980s and negative in the 2000s, particularly in the downturns of... View Details
Keywords: Inflation and Deflation; Bonds; Interest Rates; Investment Return; Risk Management
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  • 2016
  • Working Paper

Through the Grapevine: Network Effects on the Design of Executive Compensation Contracts

By: Susanna Gallani
Effective design of executive compensation contracts involves choosing and weighting performance measures, as well as defining the mix between fixed and incentive-based pay components, with a view to fostering talent retention and goal congruence. The variability in... View Details
Keywords: Compensation Design; Board Interlocks; Compensation Consultants; Network Centrality; Homophily; Quadratic Assignment Procedure; Blockholders; Executive Compensation
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  • Research Summary

International Financial Integration and Entrepreneurship (joint with Andrew Charlton)

By: Laura Alfaro
We explore the relation between international financial integration and the level of entrepreneurial activity in a country. Researchers have stressed the role of new firm activity and economic dynamism on growth. Yet, the empirical effects of international capital... View Details
  • 2019
  • Working Paper

Bank Boards: What Has Changed Since the Financial Crisis?

By: Shiva Rajgopal, Suraj Srinivasan and Forester Wong
Several government-mandated committees investigating the financial crisis highlighted four key deficiencies in the composition of bank boards before the crisis: (i) group think among bank board members; (ii) absence of prior banking experience of board members; (iii)... View Details
Keywords: Banks and Banking; Governing and Advisory Boards; Corporate Governance; Financial Crisis; Change; Diversity
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  • Web

Behavioral Finance & Financial Stability

is associated with a decline in total compensation, especially in variable pay. They also construct a new county-level uncertainty shock and find that local uncertainty shocks reduce county-level durable consumption. See Marco’s other... View Details
  • 18 Oct 2022
  • Research & Ideas

When Bias Creeps into AI, Managers Can Stop It by Asking the Right Questions

case, then I'm essentially using a proxy for “this person is a woman.” Then, when the algorithm uses the color of the case to decide who to hire or who to give a discount to, the algorithm may favor the group that has red cases, meaning... View Details
Keywords: by Rachel Layne
  • Web

Technology & Innovation - Faculty & Research

production workers) are associated with more autonomy and a wider span of control. By contrast, communication technologies (like data networks) decrease autonomy for both workers and plant managers. Treating technology as endogenous using instrumental View Details
  • 22 Oct 2019
  • Research & Ideas

Use Artificial Intelligence to Set Sales Targets That Motivate

handle human tasks—allows companies to use multiple variables to compute the best targets for employees, often in real time. Many companies have started using machine-learning algorithms to construct AI systems. Such algorithms can take... View Details
Keywords: by Michael Blanding
  • Web

Research - Behavioral Finance & Financial Stability

new employer-employee matched data, the authors find that firms provide at best partial insurance to their workers. An increase in firm-level uncertainty is associated with a decline in total compensation, especially in variable pay. They... View Details
  • 11 Apr 2012
  • Research & Ideas

The High Risks of Short-Term Management

explain with observable factors about 30 percent of the variation. The rest of the variation can be attributed either to "noise" in our measurement of the dependent variable or to idiosyncratic factors that contribute to the time horizon... View Details
Keywords: by Sean Silverthorne; Financial Services
  • 29 Aug 2006
  • First Look

First Look: August 29, 2006

firms in nearly 100 countries in 1999 and 2004, we find suggestive evidence that international financial integration has been associated with higher levels of entrepreneurial activity. Our results are robust to using various proxies for... View Details
Keywords: Sean Silverthorne
  • 01 Jun 1997
  • News

A Better Way to Go on Strike

Ideally, the specifics of the No-Fist mechanism would be part of the initial collective bargaining agreement, since agreement on true variable costs of operations could be difficult and to some extent arbitrary. Estimates of real View Details
Keywords: David Lax and Professor James K. Sebenius
  • 01 Sep 2015
  • First Look

First Look -- September 1, 2015

contrast, standard factor-model-based proxies fail to exhibit predictive power internationally. We show analytically and empirically that the importance of ROE in forecasting returns depends on the quality of accounting information.... View Details
Keywords: Sean Silverthorne
  • 10 Feb 2009
  • First Look

First Look: February 10, 2009

components of expected inflation, and the covariance between nominal variables and the real economy. The last of these state variables enables the model to fit the changing covariance of bond and stock... View Details
Keywords: Martha Lagace