Publications

Article

Market Reaction to and Valuation of IFRS Reconciliation Adjustments: First Evidence from the UK

By: Joanne Horton and George Serafeim

We investigate the market reaction to, and the value-relevance of, information contained in the mandatory transitional documents required by International Financial Reporting Standards (IFRS) 1 (2005). We find significant negative abnormal returns for firms reporting... View Details

Keywords: Valuation; Markets; Information; International Finance; Earnings Management; Stock Shares; Taxation; Goodwill Accounting; Price; Financial Reporting; Standards; Corporate Disclosure; United Kingdom

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Article

Raising Capital Requirements: At What Cost?

By: Malcolm Baker and Jeffrey Wurgler

Since the financial crisis, bank capital positions have improved considerably. However, calls for heightened capital requirements have not abated. Federal Reserve Chair Ben Bernanke, Vice Chair Janet Yellen, and governors Daniel Tarullo and Jeremy Stein have all... View Details

Keywords: Laws and Statutes; Capital; Banks and Banking; Banking Industry

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2022
Working Paper

Why Do Index Funds Have Market Power? Quantifying Frictions in the Index Fund Market

By: Zach Y. Brown, Mark Egan, Jihye Jeon, Chuqing Jin and Alex A. Wu

Index funds are one of the most common ways investors access financial markets and are perceived to be a transparent and low-cost alternative to active investment management. Despite these purported virtues of index fund investing and the introduction of new products... View Details

Keywords: Mutual Funds; Passive Investing; Asset Management; Financial Markets; Investment Funds; Financial Management; Financial Services Industry; United States

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22 Apr 2024
Research & Ideas

When Does Impact Investing Make the Biggest Impact?

impact investing companies with data from Revelio Labs, for an 83 percent match rate, to study what effect the investments had on target companies. Additional value to traditional investing? The key finding: Impact investment funds mostly buy stakes in companies that... View Details

Keywords: by Rachel Layne

TeachingInterests

Making Corporate Boards More Effective

By: Guhan Subramanian

While your corporate board may have broadly defined legal duties, its role in evaluating management, providing strategic oversight, and dealing with the complexity of today's regulatory environment has never been more tested—or more... View Details

Research Summary

Capital Flows and Capital Goods (joint with Eliza Hammel)

By: Laura Alfaro

We examine one of the channels through which financial integration can help promote growth. In particular, we study the effects of capital account liberalization on the imports of capital goods. We pay particular attention to the effects of equity market... View Details

Forthcoming
Article

Transitory and Permanent Cash Flow Shocks in Debt Contract Design

By: Le Ma, Anywhere Sikochi and Yajun Xiao

We examine how lenders design contracts to account for transitory and permanent cash flow shocks facing borrowers. We find that volatile transitory cash flow shocks are associated with fewer liquidity covenants, indicating financial flexibility that enables firms to... View Details

Keywords: Debt Covenants; Cash Flow Shocks; Debt Contracting; Likelihood Of Default; Cash Flow; System Shocks

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October 2019
Article

Does Political Uncertainty Increase External Financing Costs? Measuring the Electoral Premium in Syndicated Lending

By: Olivia S. Kim

This article investigates the impact of political uncertainty on contractual lending terms using a large sample of syndicated loans and a within-firm estimation approach to achieve identification. Firms pay 7 basis points (bps) more on loans originated when their... View Details

Keywords: Risk and Uncertainty; Political Elections; Financing and Loans; Developing Countries and Economies

June 2013 (Revised August 2020)
Case

Rawabi

By: Arthur I. Segel, Sarika Agrawal, Nimrod Brandt, Daniel Kuhagen, Thomas Reithinger and Margot Eiran

Bashar Masri is developing the first new stand-alone Palestinian city 25 kilometers north of Jerusalem and 9 kilometers north of Ramallah in the West Bank on 6300 dunams (1556 acres) for 40,000 people with financial support from the Qatari investment authority and... View Details

Keywords: Housing; Urban Development; Projects; Problems and Challenges; Construction Industry; Middle East

September 2011 (Revised September 2011)
Case

Penn Warranty Corporation

By: Richard S. Ruback and Royce Yudkoff

Penn Warranty Corporation sold warranty contracts to the used car market. During the recession in 2008/2009 Penn's sales declined by 26% Instead of growing by 11% as forecasted. Also, disruptions in financial and insurance markets created a cash shortfall. In the... View Details

September 2009 (Revised December 2010)
Case

Western Union: Our World, Our Family®

By: Christopher Marquis

In 2006, Western Union spun-off from its former parent, First Data Corporation, and began the process of defining itself as a stand-alone organization. Part of that effort was the creation of a strategic corporate social responsibility program called Our World, Our... View Details

Keywords: Business Model; Corporate Social Responsibility and Impact; Programs; Business and Stakeholder Relations; Alignment; Value

June 2003 (Revised October 2006)
Case

George McClelland at KSR (A)

By: Joshua D. Margolis, Ayesha Kanji and Wan Wong

George McClelland accepts a position as the chief administrative officer/chief operating officer at Kendall Square Research (KSR), a fledgling computer company that is taking its promising parallel computer technology to market. McClelland is a veteran of the computer... View Details

Keywords: History; Technological Innovation; Leadership; Business History; Accounting; Problems and Challenges; Business Strategy; Growth and Development; Computer Industry; Technology Industry

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August 2002 (Revised December 2002)
Case

Quality Imaging Products (QIP)

Martin Stein, a recent business school graduate, is the new owner of Quality Imaging Products (QIP), a $10-million-a-year remanufacturer of printer and copier ink cartridges. Within weeks of buying the company, QIP's vp for finance, gives an ultimatum: a raise or he... View Details

Keywords: Business or Company Management; Organizational Culture; Crisis Management; Manufacturing Industry

December 1996 (Revised July 1997)
Case

Parker's Biscuits, Inc.: Venturing into China

Carol Wittenberg's first major task as president of the Asia/Pacific business for Parker's Biscuits is to set up a joint venture to manufacture biscuits in China. The team that Wittenberg has put together to find a joint venture partner has narrowed the choice down to... View Details

Keywords: Joint Ventures; Decision Choices and Conditions; Manufacturing Industry; Food and Beverage Industry; China