Publications

July 2012
Case

Owen's Precision Machining

By: Ramana Nanda and James McQuade

For the second time in fourteen months, Christopher Owen, the second-generation owner of Owen's Precision Machining (OPM), found himself running out of cash. Owen wondered what he was doing wrong. How much additional money would he need to raise to get OPM through the... View Details

Keywords: Family Business; Cash Flow; Mergers and Acquisitions; Decision Making; Problems and Challenges; Business Strategy; Corporate Finance; Manufacturing Industry; Massachusetts

2010
Other Unpublished Work

International Capital Allocation, Sovereign Borrowing, and Growth

By: Laura Alfaro, Sebnem Kalemli-Ozcan and Vadym Volosovych

The key in the investigation of "where" and "why" capital flows, relative to the neoclassical benchmark, is how we measure these flows. The macro literature has been using three main yardsticks: the current account balance, returns to capital, and the volume of net... View Details

Keywords: Economic Growth; Borrowing and Debt; Capital; Cash Flow; Private Equity; Public Equity; International Finance; Sovereign Finance; Government and Politics

August 2015
Article

Poultry in Motion: A Study of International Trade Finance Practices

By: Pol Antràs and C. Fritz Foley

This paper analyzes the financing terms that support international trade and sheds light on how these terms shape the impact of economic shocks on trade. Analysis of transaction-level data from a U.S.-based exporter of frozen and refrigerated food products, primarily... View Details

Keywords: Risk and Uncertainty; International Finance; Financing and Loans; Trade

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January 2020 (Revised April 2020)
Case

Rumo: Infrastructure for a Healthier Economy

By: Forest L. Reinhardt, Mariana Cal, Ruth Costas and Natalie Kindred

Brazilian logistics company Rumo operated 13,500 km in railway networks, port terminals, and inland transshipment terminals, connecting major Brazilian ports to the agriculture hubs of Mato Grosso and São Paulo state. Controlled by Cosan, Brazil's leading sugar and... View Details

Keywords: Agribusiness; Plant-Based Agribusiness; Customer Relationship Management; Growth and Development Strategy; Logistics; Rail Transportation; Value Creation; Rail Industry; Transportation Industry; Agriculture and Agribusiness Industry; Latin America; Brazil

February 2017 (Revised February 2018)
Case

Frank Baker: Siris Capital Group and Titan Systems

By: Steven Rogers and Derrick Collins

Private equity firm, Siris Capital Group, must decide if they should raise their offer to take Titan Telecom private by acquiring its publicly traded stock. Siris’ decision to pay a premium for Titan must be made in the context of their unique (and somewhat complex)... View Details

Keywords: Acquisition; Leveraged Buyouts; Mergers and Acquisitions; Private Equity; Mobile Technology; Financial Services Industry; Communications Industry; Telecommunications Industry; United States

Research Summary

Corporate Control and Valuation

By: Richard S. Ruback

Richard S. Ruback's research and course development focus on applied corporate finance-in particular, corporate control transactions and valuation. His research on corporate control has yielded case studies on major transactions, such as the View Details

2019
Working Paper

Do Banks Have an Edge?

By: Juliane Begenau and Erik Stafford

Overall, no! We show that the level and time series variation in cash flows for most bank activities are well matched by capital market portfolios with similar interest rate and credit risk to what banks report to hold. Ignoring operating expenses, bank loans earn high... View Details

Keywords: Banks; Market Efficiency; Bank Capital; Bank Debt; CAPM; Banking; Bank Deposits; Bank Funding Advantage; Leverage; Maturity Transformation; Replicating Portfolio; Efficiency; Banks and Banking; Capital Markets; Performance Evaluation; Performance Efficiency; Banking Industry; United States

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December 2008 (Revised March 2009)
Case

Rosetree Mortgage Opportunity Fund

By: Victoria Ivashina and Andre F. Perold

In December 2008, in the midst of the worst financial crisis since the Great Depression, Rosetree Capital Management was evaluating the purchase of a pool of U.S. residential mortgages. The firm had formed an investment vehicle to acquire troubled residential mortgages... View Details

Keywords: Financial Crisis; Borrowing and Debt; Mortgages; Investment; Housing; Valuation; United States

01 Dec 2006
What Do You Think?

How Important Is Quality of Labor? And How Is It Achieved?

is to assume that quality of labor is genetic ." Flavius Chircu said, "I would simplify the analysis by substituting 'quality of labor' with 'quality of output,' be that output a product, service, or mix thereof." In Sneh... View Details

Keywords: by by Jim Heskett

January 2008
Article

Innovation Killers: How Financial Tools Destroy Your Capacity to Do New Things

By: Clayton M. Christensen, Stephen P. Kaufman and Willy C. Shih

Most companies aren't half as innovative as their senior executives want them to be (or as their marketing claims suggest they are). What's stifling innovation? There are plenty of usual suspects, but the authors finger three financial tools as key accomplices.... View Details

Keywords: Investment; Innovation and Management; Growth and Development Strategy; Business and Shareholder Relations; Prejudice and Bias; Value Creation

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28 Apr 2014
Working Paper Summaries

Payout Policy

Keywords: by Joan Farre-Mensa, Roni Michaely & Martin C. Schmalz

Eaton Corp.: Portfolio Transformation and the Cost of Capital

In 2000, Eaton Corporation was broadly diversified industrial conglomerate. But its strategy was evolving and its focus was narrowing around “power management” and more recently on “intelligent power,” the use of digitally enabled products and services designed... View Details

2014
Other Teaching and Training Material

Entrepreneurship Reading: Financing Entrepreneurial Ventures

By: William R. Kerr, Ramana Nanda and James McQuade

"Financing Entrepreneurial Ventures" introduces students to the key issues involved in the financing of entrepreneurial enterprises. The Reading begins by examining how business models shape external financing requirements. It then contrasts the choice to bootstrap... View Details

2010
Chapter

The Financing of R&D and Innovation

By: Bronwyn H. Hall and Josh Lerner

Evidence on the “funding gap” for investment innovation is surveyed. The focus is on financial market reasons for underinvestment that exist even when externality-induced underinvestment is absent. We conclude that while small and new innovative firms experience high... View Details

Keywords: Research and Development; Innovation and Invention; Venture Capital; Corporate Finance

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November 2010 (Revised May 2014)
Case

Dow's Bid for Rohm and Haas

By: Benjamin C. Esty and David Lane

This case analyzes Dow Chemical Company's proposed acquisition of Rohm and Haas in 2008. The $18.8 billion acquisition was part of Dow's strategic transformation from a slow-growth, low-margin, and cyclical producer of basic chemicals into a higher-growth,... View Details

Keywords: Mergers and Acquisitions; Financial Crisis; Capital Structure; Financial Condition; Financial Management; Contracts; Lawsuits and Litigation; Risk and Uncertainty; Valuation; Chemical Industry

January 2005 (Revised March 2008)
Case

Kohler Co. (A)

Kohler Co., best known for its plumbing fixtures, is a large, private family firm. As part of a recapitalization aimed at preserving family ownership of Kohler Co., nonfamily shareholders, who held 4% of common stock, were required to sell their shares to the company.... View Details

Keywords: Family Business; Capital Structure; Cash Flow; Stocks; Price; Family Ownership; Business and Shareholder Relations; Valuation

28 Jun 2021
Research & Ideas

Keep or Cut Workers? How Companies Reacted to the COVID-19 Crisis

conduct an analysis to determine how companies were responding to the crisis. Were they retaining their staff and providing essential workers with extra pay, or were they cutting expenses through layoffs and furloughs? "It gave us a rare... View Details

Keywords: by Lane Lambert

July 2019 (Revised May 2021)
Case

Acelerex

By: John R. Wells and Benjamin Weinstock

In early 2019, Randell Johnson, Founder and Chief Executive of Acelerex, was reflecting on the company’s first year of rapid growth and the challenges of scaling the business that lay ahead. Acelerex was riding the waves of change taking place in electrical power grids... View Details

Keywords: Energy; Energy Sources; Growth Management; Expansion; Global Strategy; Cash Flow; Energy Industry; Web Services Industry; Consulting Industry