Finance: Non-venture Financing

21 Results

 

Politicians Benefited From Using Toxic Loans

A new study by Boris Vallée and Christophe Pérignon offers evidence that local politicians in France (and probably elsewhere) used high-risk loans for political gain in the years leading up to the recent financial crisis. The strategy worked: Toxic loans helped mayors get reelected. Open for comment; 3 Comments posted.

The Rise and Fall of Demand for Securitizations

At the heart of the recent financial crisis were nontraditional securitizations, especially collateralized debt obligations and private-label mortgage-backed securities backed by nonprime loans. Demand for these securities helped feed the housing boom during the early and mid-2000s, while rapid declines in their prices during 2007 and 2008 generated large losses for financial intermediaries, ultimately imperiling their soundness and triggering a full-blown crisis. Little is known, however, about the underlying forces that drove investor demand for these securitizations. Using micro-data on insurers' and mutual funds' holdings of both traditional and nontraditional securitizations, this paper begins to shed light on the economic forces that drove the demand for securitizations before and during the crisis. Among the findings, variation across securitization types and investors is key to understanding the crisis. Beliefs appear to have been an important driver of mutual fund holdings of nontraditional securitizations. Results also underscore the importance of optimal liquidity management in the context of fire sales. Read More

A Playbook for Small-Business Job Creation

Karen Mills left her post as SBA Administrator for a joint fellowship at Harvard to tackle a question she's faced her whole career: How can the United States drive innovation and turn it into jobs? Open for comment; 1 Comment posted.

Companies Detangle from Legacy Pensions

Although new defined benefit plans are rare, many firms must still fund commitments to retirees. Luis M. Viceira looks at the pension landscape and the recent emergence of insurance companies as potential saviors. Open for comment; 4 Comments posted.

Crowdfunding a Poor Investment?

Crowdfunding promises to democratize funding of startups. But is that necessarily a good thing? Entrepreneurial finance experts Josh Lerner, Ramana Nanda, and Michael J. Roberts on the promises and problems with the newest method for funding small businesses. Closed for comment; 12 Comments posted.

Faculty Symposium Showcases Breadth of Research

Faculty present their latest research on the human tendency toward dishonesty, the use of crowdsourcing to solve major scientific problems, and the impact of private equity investments. Closed for comment; 3 Comments posted.

Crashes and Collateralized Lending

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). Read More

The Hedge Fund as Activist

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. Read More

The Competitive Advantage of Global Finance

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. Read More

Unlocking Your Investment Capital

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. Read More

The Trouble Behind Livedoor

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. Read More

Float Manipulation and Stock Prices

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. Read More

Cash and the Woman-Owned Business

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. Read More

The Big Money for Big Projects

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 Read More

When Reputation Trumps Regulation

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. Read More

Case Study: A Lesson in Private Venture Financing

Using a case discussion on Gray Security Services, Harvard Business School associate professor Walter Kuemmerle highlights issues confronting entrepreneurs and investors interested in Africa. Read More

Women Entrepreneurs Use Springboard for Funding

The Springboard Venture Capital Forum, held recently at Harvard Business School, was a platform for twenty-three women entrepreneurs seeking heavy-duty financing. Read More

The Determinants of Corporate Venture Capital Success

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. Read More

Networked Incubators: Hothouses of the New Economy

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. Read More

Big Deals: Financing Large-Scale Investments

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. Read More

The Future of the Venture Capital Cycle

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. Read More