Publications

April 2002 (Revised September 2002)
Background Note

Capital Controls

By: Rawi E. Abdelal and Laura Alfaro

Only in the waning years of the 20th century did international financial markets begin to enjoy the freedom from government regulation that they had experienced before the first world war. By 2002, international capital markets had grown to be enormous--$1.2 trillion... View Details

Keywords: History; Policy; Business and Government Relations; Change Management; Cost vs Benefits; Governance Controls; Governance Compliance; Emerging Markets; Financial Markets; Network Effects; Banking Industry; Financial Services Industry

12 Jul 2020
Working Paper Summaries

Sticky Capital Controls

Keywords: by Miguel Acosta-Henao, Laura Alfaro, and Andrés Fernández

December 1997 (Revised December 1998)
Case

Valuing Capital Investment Projects

By: W. Carl Kester

A collection of problems that introduces students to the application of discounted cash flow analysis in the evaluation of capital budgeting problems. View Details

Keywords: Budgets and Budgeting; Capital; Cash Flow; Investment; Valuation

March 2010
Article

Sudden Stops: Determinants and Output Effects in the First Era of Globalization, 1880–1913

By: Michael D. Bordo, Alberto Cavallo and Christopher Meissner

We study the determinants and output effects of sudden stops in capital inflows during an era of intensified globalization from 1880 to 1913. Higher levels of exposure to foreign currency debt and large current account deficits associated with reliance on foreign... View Details

Keywords: Sudden Stops; Capital Flows; Economics; Macroeconomics; Economic Growth; Financial Crisis; Globalization; History

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14 Mar 2011
Research & Ideas

Keeping Credit Flowing to Consumers in Need

government should not be the sole credit source. But how will private capital respond to a diminished federal role? Given the collapse of the housing market, what terms will private capital require to... View Details

Keywords: by Sean Silverthorne; Financial Services; Construction; Real Estate

October 2000 (Revised April 2001)
Case

Cost of Capital at Ameritrade

By: Mark L. Mitchell and Erik Stafford

Ameritrade Holding Corp. is planning large marketing and technology investments to improve the company's competitive position in deep-discount brokerage by taking advantage of emerging economies of scale. In order to evaluate whether the strategy would generate... View Details

Keywords: Developing Countries and Economies; Asset Pricing; Cash Flow; Cost of Capital; Investment; Marketing; Mathematical Methods; Competition; Information Technology; Internet and the Web; Financial Services Industry

2010
Working Paper

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: Sovereign Finance; Performance Productivity; Capital; Economics

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

May 2023
Technical Note

Venture Capital at a Crossroads

By: Jo Tango and Alys Ferragamo

Venture capital is a cyclical, ever-changing industry, as seen in recent years. The late 2010s and early 2020s witnessed record amounts of capital flowing into the sector, high valuations, and new types of investors entering the market. Innovations in the seed stage,... View Details

Keywords: Venture Capital

October 2019
Article

Limited Investment Capital and Credit Spreads

By: Emil N. Siriwardane

Using proprietary credit default swap (CDS) data, I investigate how capital shocks at protection sellers impact pricing in the CDS market. Seller capital shocks—measured as CDS portfolio margin payments—account for 12% of the time-series variation in weekly spread... View Details

Keywords: Credit Risk; Derivatives; Credit Derivatives and Swaps; Capital Markets; Credit; Financial Institutions

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19 Mar 2015
News

Startup Raises $40M to Keep Small Businesses’ Cash Flowing

20 Oct 2020
Working Paper Summaries

Flight to Safety: How Economic Downturns Affect Talent Flows to Startups

Keywords: by Shai Benjamin Bernstein, Richard Townsend, and Ting Xu

November 2009
Background Note

Business Valuation and the Cost of Capital

By: Timothy A. Luehrman

This note is an introduction to the cost of capital as used in discounted cash flow valuation analyses. The note covers basic financial economic principles and practical problems encountered in calculating the cost of capital, especially WACC. It concludes with... View Details

Keywords: Economics; Capital Budgeting; Cash Flow; Cost of Capital; Valuation

2010
Article

The Effect of Financial Development on the Investment Cash Flow Relationship: Cross-Country Evidence from Europe

We investigate financing constraints in a large cross-country data set covering most of the European economy. Firm-level investment sensitivity to cash flow is used to identify financing constraints. We find that the sensitivities are significantly positive, on... View Details

Keywords: Growth and Development; Development Economics; Investment; Cash Flow; Cross-Cultural and Cross-Border Issues; Relationships; Economy; Financial Markets; Business Subsidiaries; Capital Markets; Assets; Financing and Loans; Europe

2010
Simulation

Finance Simulation: Capital Budgeting: Product No. 3357.

By: Timothy A. Luehrman

In this single-player simulation, students act as members of the Capital Committee of New Heritage Doll Company, tasked with selecting and allocating capital across the company's three divisions. Students evaluate a diverse set of competing investment proposals and... View Details

Keywords: Resource Allocation; Investment; Projects; Capital Budgeting; Corporate Finance

Web

HBS - Financials | Statement of Activity & Cash Flows

2022 Annual Report From The Dean Key Metrics Financials PDF Downloads Financials From the CFO Financial Highlights Statement of Activity & Cash Flows Consolidated Balance Sheet Supplemental Financial Information Financials From the CFO... View Details

February 1998 (Revised March 1998)
Case

Marriott Corporation: The Cost of Capital

By: Richard S. Ruback

Presents recommendations for hurdle rates of Marriott's divisions to select by discounting appropriate cash flows by the appropriate hurdle rate for each division. View Details

Keywords: Cost of Capital; Asset Pricing

January 2009
Journal Article

The Fiscal Impact of High-skilled Emigration: Flows of Indians to the U.S.

By: Mihir Desai, D. Kapur, J. McHale and K Rogers

Easing immigration restrictions for the highly skilled in developed countries portends a future of increased human capital outflows from developing countries. The myriad consequences of these developments for developing countries include the direct loss of the fiscal... View Details

Keywords: Talent and Talent Management; Diasporas; Developing Countries and Economies; Taxation; Compensation and Benefits; Human Capital; Mathematical Methods; India; United States