Lauren H. Cohen
There are 4 articles for this faculty member.
Connecting School Ties and Stock Recommendations
| Q&A with: | Lauren H. Cohen |
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| Published: | May 19, 2008 |
| Feature: | Research & Ideas |
School connections are an important yet underexplored way in which private information is revealed in prices in financial markets. As HBS professor Lauren H. Cohen and colleagues discovered, school ties between equity analysts and top management of public companies led analysts to earn returns of up to 5.4 percent on their stock recommendations. Cohen explains more in our Q&A.
Sell Side School Ties
| Authors: | Lauren H. Cohen, Andrea Frazzini, and Christopher J. Malloy |
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| Published: | March 20, 2008 |
| Paper Release Date: | February 2008 |
| Feature: | Working Papers |
Certain agents play key roles in revealing information into securities markets. In the equities market, security analysts are among the most important. A large part of an analyst's job (perhaps the majority) is to research, produce, and disclose reports forecasting aspects of companies' future prospects, and to translate their forecasts into stock recommendations. Therefore, isolating how, or from whom, analysts obtain the information they use to produce their recommendations is important. Do analysts gain comparative information advantages through their social networks—specifically, their educational ties with senior officers and board members of firms that they cover? This paper investigates ties between sell-side analysts and management of public firms, and the subsequent performance of their stock recommendations.
The Small World of Investing: Board Connections and Mutual Fund Returns
| Authors: | Lauren H. Cohen, Andrea Frazzini, and Christopher Malloy |
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| Published: | February 12, 2008 |
| Paper Release Date: | January 2008 |
| Feature: | Working Papers |
How does information flow in security markets, and how do investors receive information? In the context of information flow, social networks allow a piece of information to flow along a network often in predictable paths. HBS professors Lauren Cohen and Christopher Malloy, along with University of Chicago colleague Andrea Frazzini, studied a type of dissemination through social networks tied to educational institutions, examining the information flow between mutual fund portfolio managers and senior officers of publicly traded companies. They then tested predictions on the portfolio allocations and returns earned by mutual fund managers on securities within and outside their networks.
Attracting Flows by Attracting Big Clients: Conflicts of Interest and Mutual Fund Portfolio Choice
| Authors: | Lauren H. Cohen and Breno Schmidt |
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| Published: | February 7, 2008 |
| Paper Release Date: | January 2008 |
| Feature: | Working Papers |
Retirement assets make up a large and growing percentage of the mutual fund universe. In 2004, nearly 40 percent of all mutual fund assets were held by defined contribution plans and individual retirement accounts. This percentage is steadily increasing largely because these retirement accounts represent the majority of new flows into non-money market mutual funds. With such a large and growing percentage of their assets coming from retirement accounts, mutual funds are likely to be interested in securing these big clients. This paper examines a new channel through which mutual fund families can attract assets: by becoming a 401(k) plan's trustee. HBS professor Lauren Cohen and colleague Breno Schmidt provide evidence consistent with the trustee relationship affecting families' portfolio choice decisions. These portfolio decisions, however, have the potential to be in conflict with the fiduciary responsibility mutual funds have for their investors, and can impose potentially large costs.
