Publications

Find at Harvard

December 2008 (Revised October 2010)
Case

Paul Capital Partners: Secondary Limited Partnership Investing

By: David S. Scharfstein

This case examines the proposed purchase by Paul Capital Partners of a limited partnership (LP) interest in a private equity fund. Paul Capital has a fund dedicated to buying these "secondary" LP interests. The case is intended as a vehicle for discussing the secondary... View Details

Keywords: Capital; Investment; Private Equity; Valuation; Partners and Partnerships; Interests; Markets; Debates; Financial Services Industry

Educators

Teaching Interest

Overview

By: David S. Scharfstein

I teach an MBA course in the elective curriculum called Managing and Innovating in Financial Services. I focus on key functions of the financial system including credit, liquidity, insurance and payments provided by a variety of financial intermediaries including... View Details

October 2013
Supplement

Oaktree and the Restructuring of CIT Group (B)

By: Victoria Ivashina and David Scharfstein

This supplement presents the actual terms of the rescue financing provided by a group of private investors to CIT. It is intended to be distributed at the end of the discussion of "Oaktree and the Restructuring of CIT Group (A)" (HBS No. 214-035) and can be used as... View Details

Keywords: Private Equity; Restructuring; Financial Services Industry

2021
Working Paper

Racial Disparities in the Paycheck Protection Program

By: Sergey Chernenko and David S. Scharfstein

Using a large sample of Florida restaurants, we document significant racial disparities in borrowing through the Paycheck Protection Program (PPP) and investigate the causes of these disparities. Black-owned restaurants are 25% less likely to receive PPP loans.... View Details

Keywords: Discrimination; Paycheck Protection Program; Economic Injury Disaster Loans; Bank Lending; Nonbank Lending; Banks and Banking; Financing and Loans; Prejudice and Bias; Race

2023
Working Paper

The Stock Market and Bank Risk-Taking

By: David S. Scharfstein and Antonio Falato

Using confidential supervisory risk ratings, we document that banks increase risk after they go public compared to a control group of banks that filed to go public but withdrew their filings for plausibly exogenous reasons. The increase in risk increases short-term... View Details

Keywords: Risk and Uncertainty; Banks and Banking; Going Public; Performance; Stocks

Web

Finance Awards & Honors - Faculty & Research

School Professor Globally by Poets & Quants in 2017. Lauren H. Cohen : Named one of Harvard Business School’s Best Teachers - CNBC, 2017. Lauren H. Cohen : Competitor in the 2017 World's Strongest Man competition (80KG). View Details

March 2012
Article

How to Make Finance Work

By: Robin Greenwood and David S. Scharfstein

Once a sleepy old boys' club, the U.S. financial sector is now a dynamic and growing business that attracts the best and the brightest. It is tempting to declare the industry a roaring success. But its purpose is to serve the needs of U.S. households and firms, and by... View Details

Keywords: Business Ventures; Value; Competitive Advantage; Investment; Performance Evaluation; Household; Financial Crisis; Finance; Financial Services Industry; United States

Find at Harvard

2023
Working Paper

Applications or Approvals: What Drives Racial Disparities in the Paycheck Protection Program?

By: Sergey Chernenko, Nathan Kaplan, Asani Sarkar and David S. Scharfstein

We use the 2020 Small Business Credit Survey to study the sources of racial disparities in use of the Paycheck Protection Program (PPP). Black-owned firms are 8.9 percentage points less likely than observably similar white-owned firms to receive PPP loans. About 55% of... View Details

Keywords: Borrowing and Debt; Small Business; Race; Financing and Loans

2006
Working Paper

Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs

By: Paul A. Gompers, Anna Kovner, Josh Lerner and David S. Scharfstein

This paper argues that a large component of success in entrepreneurship and venture capital can be attributed to skill. We show that entrepreneurs with a track record of success are more likely to succeed than first time entrepreneurs and those who have previously... View Details

Keywords: Return On Investment; Entrepreneurship; Venture Capital; Success; Experience and Expertise

2023
Working Paper

The Limits of Algorithmic Measures of Race in Studies of Outcome Disparities

By: David S. Scharfstein and Sergey Chernenko

We show that the use of algorithms to predict race has significant limitations in measuring and understanding the sources of racial disparities in finance, economics, and other contexts. First, we derive theoretically the direction and magnitude of measurement bias in... View Details

Keywords: Racial Disparity; Paycheck Protection Program; Measurement Error; AI and Machine Learning; Race; Measurement and Metrics; Equality and Inequality; Prejudice and Bias; Forecasting and Prediction; Outcome or Result

2016
Working Paper

The Stock Market and Bank Risk-Taking

By: David S. Scharfstein and Antonio Falato

We argue that stock market pressure to generate earnings encourages banks to increase risk. We measure risk using confidential supervisory ratings as well as financial information released in regulatory filings. We document that there is an increase in the risk-taking... View Details

Keywords: Stock Market; Financial Markets; Business Earnings; Banks and Banking; Risk and Uncertainty

June 2010 (Revised November 2013)
Case

Momentive Performance Materials, Inc.

By: Victoria Ivashina and David Scharfstein

After nearly violating its loan covenants in 2009, Momentive Performance Materials, backed by its financial sponsor Apollo Global Management, took a variety of actions to restructure its debt. The restructuring steps included an open market repurchase of publicly held... View Details

Keywords: Restructuring; Financial Crisis; Borrowing and Debt; Private Equity; Financing and Loans

Educators