This paper presents a framework for understanding the contribution of systematic crash risk to the cost of capital for a variety of different types of securities. The framework isolates the systematic crash risk exposure of different collateral types (equities, corporate bonds, and CDO tranches), and provides a simple mechanism for allocating the cost of bearing this risk between a financing intermediary and investor. Research was conducted by Jakub W. Jurek (Bendheim Center for Finance, Princeton University) and Erik Stafford (Harvard Business School).
Published in 2007
Do hedge funds improve management of the companies they invest in? A new study by Harvard Business School professor Robin Greenwood and coauthor Michael Schor argues that, in fact, hedge funds create shareholder value through anticipation of change, not necessarily delivering it.
Published in 2006
Relatively few multinational companies truly understand or take advantage of international finance. Professor Mihir A. Desai tackles the subject in a new book, International Finance: A Casebook. Here’s a Q&A.
By reassessing risk exposure, many companies can create more equity capacity to fund investments, says Harvard Business School professor Robert C. Merton. Just don't leave it up to the Finance Department.
When Livedoor CEO Takafumi Horie was arrested last month, it shook the economic underpinnings of Japan. Professor Robin Greenwood discusses what went wrong with one of that country's most-watched Internet companies.
Published in 2005
When a firm reduces the number of shares available to trade, so-called float manipulation, the price of the stock is often driven up. The author uses a series of 2,000 stock split events in Japan as an experiment to understand the consequences of float manipulation for stock prices. The conclusion: Stock prices are raised significantly when there are differing opinions about the value of shares, investors are unable to sell short, and the number of outstanding shares is reduced.
Published in 2004
Female entrepreneurs often lack start-up cash. This excerpt from the book Clearing the Hurdles, co-authored by HBS professor Myra M. Hart, explains what women can do about it.
This isn't your father's venture capital. Amusement parks, satellite
networks, oil fields, toll roads: HBS Professor Benjamin Esty studies financing of large projects. Q&A
Foreign firms cross-listing on U.S. exchanges are learning that their biggest appeal to potential investors lies in a strong reputation. An interview with HBS professor Jordan Siegel.
Published in 2002
Using a case discussion on Gray Security Services, Harvard Business School associate professor Walter Kuemmerle highlights issues confronting entrepreneurs and investors interested in Africa.
Published in 2001
The Springboard Venture Capital Forum, held recently at Harvard Business School, was a platform for twenty-three women entrepreneurs seeking heavy-duty financing.
Published in 2000
Corporate-sponsored venture capital funds do not have to fail. But as HBS professors Paul Gompers and Josh Lerner explain, hybrid organizations such as Xerox Technology Ventures face considerable challenges on the road to success.
Are business incubators a fleeting phenomenon or a lasting way of bringing start-ups to fruition? Four HBS professors argue that one particular model—the "networked incubator"—is most likely to endure.
Multimillion dollar start-ups are all over the news these days. But HBS Professor Benjamin Esty's research provides insight into a much bigger kind of venture, with start-up costs on the order of billions, rather than millions, of dollars.
Published in 1999
Despite many success stories and a rapid rise to prominence, the venture capital industry remains a mystery to most, and questions about its sustainability persist. In this excerpt from their pathbreaking book The Venture Capital Cycle, HBS Professors Paul Gompers and Josh Lerner look toward the future of this misunderstood financial intermediary.
