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    • COVID-19 Business Impact Center
      COVID-19 Business Impact Center
      Cold Call
      A podcast featuring faculty discussing cases they've written and the lessons they impart.
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      • 05 Jan 2021
      • Cold Call Podcast

      Using Behavioral Science to Improve Well-Being for Social Workers

      For child and family social workers, coping with the hardships of children and parents is part of the job. But that can cause a lot of stress. Is it possible for financially constrained organizations to improve social workers’ well-being using non-cash rewards, recognition, and other strategies from behavioral science? Assistant Professor Ashley Whillans describes the experience of Chief Executive Michael Sanders’ at the UK’s What Works Centre for Children’s Social Care, as he led a research program aimed at improving the morale of social workers in her case, “The What Works Centre: Using Behavioral Science to Improve Social Worker Well-being.”  Open for comment; 0 Comment(s) posted.

      Read the Transcript

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      Financial MarketsRemove Financial Markets →

      Page 1 of 21 Results →
      • 29 Jun 2020
      • Working Paper Summaries

      Measuring the Perceived Liquidity of the Corporate Bond Market

      by Sergey Chernenko and Adi Sunderam

      The liquidity of corporate bond markets is crucial to their functioning. This paper proposes a novel measure of bond market liquidity based on portfolio holdings instead of transaction data. The measure can be applied to asset-backed securities, syndicated loans, and municipal securities for which publicly available data on transactions are not available.

      • 05 Sep 2019
      • Working Paper Summaries

      The Value of Intermediation in the Stock Market

      by Marco Di Maggio, Mark Egan, and Francesco Franzoni

      Despite the rise of alternative trading platforms, high-touch broker trading remains prominent in institutional equity markets. The authors analyze how fees, research, quality of execution, and information can help explain how execution decisions and preferences vary across investors.

      • 07 Jun 2019
      • Working Paper Summaries

      Reflexivity in Credit Markets

      by Robin Greenwood, Samuel G. Hanson, and Lawrence J. Jin

      Investors’ biases and market outcomes affect each other in a two-way feedback loop. This study develops a model of a credit market feedback loop, finding that when investors become more bullish this can predict positive returns in the short run, even if expected returns become more negative at longer horizons.

      • 22 May 2019
      • Research & Ideas

      Forgiving Student Loan Debt Leads to Better Jobs, Stronger Consumers

      by Dina Gerdeman

      Without the burden of student loan debt, people seek higher-paying careers, stabilize their finances, and contribute to the economy, says Marco Di Maggio. Open for comment; Comment(s) posted.

      • 15 Jan 2019
      • Working Paper Summaries

      The Creation and Evolution of Entrepreneurial Public Markets

      by Shai Bernstein, Abhishek Dev, and Josh Lerner

      Since 1990, new stock exchanges geared toward fast-growing, entrepreneurial companies have proliferated around the world. This analysis shows that exchanges in countries with better shareholder protection allowed younger and less profitable companies to raise more capital. These markets alone cannot boost entrepreneurial activity but need enabling institutions.

      • 03 Dec 2018
      • Research & Ideas

      How Companies Can Increase Market Rewards for Sustainability Efforts

      by Rachel Layne

      There is a connection between public sentiment about a company and how the market rewards its corporate social performance, according to George Serafeim. Is your company undervalued? Open for comment; Comment(s) posted.

      • 19 Nov 2018
      • Working Paper Summaries

      Lazy Prices

      by Lauren Cohen, Christopher J. Malloy, and Quoc Nguyen

      The most comprehensive information windows that firms provide to the markets—in the form of their mandated annual and quarterly filings—have changed dramatically over time, becoming significantly longer and more complex. When firms break from their routine phrasing and content, this action contains rich information for future firm stock returns and outcomes.

      • 18 Jun 2018
      • Working Paper Summaries

      A Measure of Risk Appetite for the Macroeconomy

      by Carolin E. Pflueger, Emil Siriwardane, and Adi Sunderam

      This paper sheds new light on connections between financial markets and the macroeconomy. It shows that investors’ appetite for risk—revealed by common movements in the pricing of volatile securities—helps determine economic outcomes and real interest rates.

      • 15 Sep 2017
      • Working Paper Summaries

      Debt Redemption and Reserve Accumulation

      by Laura Alfaro and Fabio Kanczuk

      This study examines how reserve accumulation affects governments’ decisions to default. The analysis assumes that countries can accumulate reserves and borrow internationally using their own currency. Results suggest that the optimal level of international reserves is fairly large because their cost is mitigated by valuation-smoothing gains. The model matches some features of Brazil’s economic fluctuations.

      • 17 Jul 2017
      • Working Paper Summaries

      The Relevance of Broker Networks for Information Diffusion in the Stock Market

      by Marco Di Maggio, Francesco Franzoni, Amir Kermani, and Carlo Sommavilla

      How information is generated by market participants, shared, and incorporated into prices is one of the key questions for understanding how financial markets operate. This study finds that intermediaries play a large role in the acquisition and dissemination of private information, which they extract from order flow and, more generally, from interaction with clients.

      • 13 Jul 2017
      • Working Paper Summaries

      Catering Through Disclosure: Evidence from Shanghai-Hong Kong Connect

      by Aaron S. Yoon

      The researcher studies firms’ use of disclosure to build investor confidence when they operate in a market where the institutions that support the supply of credible information are weak.

      • 05 Jul 2017
      • Research & Ideas

      Are Stockbrokers Illegally Leaking Confidential Information to Favored Clients?

      by Carmen Nobel

      New research by Marco Di Maggio reveals stockbroker behavior that is probably illegal, definitely underregulated, and arguably influential in the day-to-day operations of the stock market. Open for comment; Comment(s) posted.

      • 30 Nov 2016
      • Working Paper Summaries

      The Stock Market and Bank Risk-Taking

      by Antonio Falato and David Scharfstein

      It is clear that risk-taking by financial institutions is one of the main causes of financial crises and severe recessions. Yet we know relatively little about what gives rise to such risk-taking in the first place. This paper presents evidence that a focus on short-term stock prices induces publicly-traded banks to increase risk relative to privately-held banks. The findings provide support for the view that compensation schemes should require management to hold stock for longer periods to mitigate their incentives to pump up short-term earnings and the short-term stock price.

      • 08 Sep 2016
      • Working Paper Summaries

      A Model of Credit Market Sentiment

      by Robin Greenwood, Samuel G. Hanson, and Lawrence J. Jin

      Recent empirical research in finance and economics has revived the idea that investor sentiment drives credit booms and busts. To explore the drivers of sentiment in credit markets, the authors model the two-way feedback between credit market sentiment and credit market outcomes. In their model the propagation of credit cycles is driven by the interplay between expectations and the refinancing nature of credit markets.

      • 01 Aug 2016
      • Research & Ideas

      Retail Execs Underplay Current Performance to Investors--but Why?

      by Dina Gerdeman

      In quarterly earnings calls with investors and analysts, some retail managers may underplay how their companies are actually performing, according to recent research by Kenneth Froot and colleagues. Open for comment; Comment(s) posted.

      • 09 May 2016
      • Working Paper Summaries

      What Do Measures of Real-Time Corporate Sales Tell Us About Earnings Surprises and Post-announcement Returns?

      by Kenneth A. Froot, Namho Kang, Gideon Ozik, and Ronnie Sadka

      This study by Kenneth A. Froot and colleagues show that managers’ departures from the Timely Disclosure Hypothesis—the notion that managers release through available announcement channels all of their then-current private information—may be sensitive to post-quarter private information managers have obtained. Managers may act through their stock trading to benefit from these departures.

      • 13 Jan 2016
      • Working Paper Summaries

      Forward Guidance in the Yield Curve: Short Rates versus Bond Supply

      by Robin Greenwood, Samuel G. Hanson, and Dimitri Vayanos

      Since late 2008, central banks have been conducting monetary policy through two primary instruments: quantitative easing (QE), in which they buy long-term government bonds and other long-term securities, and “forward guidance,” in which they guide market expectations about the path of future short rates. This paper analyzes the effects of forward guidance on both short rates and QE. Results show that forward guidance on QE tends to impact longer maturities than forward guidance on short rates, even when expectations about bond purchases by the central bank concern a shorter horizon than expectations about future short rates.

      • 08 Oct 2015
      • Working Paper Summaries

      Market Reaction to Mandatory Nonfinancial Disclosure

      by Jyothika Grewal, Edward J. Riedl & George Serafeim

      How does the equity market respond to the adoption of mandatory nonfinancial disclosure? Research by George Serafeim and colleagues.

      • 14 Jan 2009
      • Working Paper Summaries

      Smart Money: The Effect of Education, Cognitive Ability, and Financial Literacy on Financial Market Participation

      by Shawn Cole & Gauri Kartini Shastry

      (Previously titled "If You Are So Smart, Why Aren't You Rich? The Effects of Education, Financial Literacy and Cognitive Ability on Financial Market Participation.") Individuals face an increasingly complex menu of financial product choices. The shift from defined benefit to defined contribution pension plans, and the growing importance of private retirement accounts, require individuals to choose the amount they save, as well as the mix of assets in which they invest. Yet, participation in financial markets is far from universal in the United States. Moreover, researchers have only a limited understanding of what factors cause participation. Cole and Shastry use a very large dataset new to the literature in order to study the important determinants of financial market participation. They find that higher levels of education and cognitive ability cause increased participation—however, financial literacy education does not. Key concepts include: The relationship between education and savings is difficult to measure, because both are affected by many factors (motivation, ability, etc.). This paper documents an important causal relationship between education and financial market participation. A set of financial literacy education programs, mandated by state governments, did not have an effect on individual savings decisions. It is imperative to conduct rigorous evaluations of financial literacy education programs to measure their efficacy. Closed for comment; 0 Comment(s) posted.

      • 02 Oct 2008
      • What Do You Think?

      Workout vs. Bailout: Should Government Take Advantage of the Buffett Effect?

      by Jim Heskett

      The depth of the global financial crisis is becoming clearer day by day, says HBS professor Jim Heskett. Respondents to this month's column offered creative solutions, and by and large resisted the temptation to venture into the realm of ideology. (Online forum now closed.) Closed for comment; 50 Comment(s) posted.

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