Simon Business School
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Finance

Finance at Simon Business School deals with problems of corporate financial policy, individual consumption-investment choices, and capital market equilibrium in an uncertain environment. The principles of price theory, mathematics, and statistics provide the basis for analyzing these problems. In particular, close attention is given to investor-management behavior induced by utility maximization, how this behavior is affected by information, regulation, and contractual arrangements, and the implications of these considerations for systematic, measurable phenomena in financial markets. The methodological approach taken at Simon Business School places strong emphasis on formal modeling of these problems and empirical testing of alternative theories.

Faculty and  Research Interests

  • Gregory Bauer: His area of research is international finance.
  • James A. Brickley: His research and teaching interests are in the economics of organizations, corporate governance and compensation policy, corporate finance, franchising, and banking.
  • Richard Couch: His interests include corporate finance, corporate governance, and capital management.
  • Shiming Fu: His research interests lie in financial economics, corporate finance, and dynamic contracting.
  • Olga Itenberg: Her research interests lie in macroeconomics, innovation, and corporate finance.
  • Gregg A. Jarrell: His interests include the economics of corporate control, economics of regulation, and applied corporate finance.
  • Ron Kaniel: His research is on understanding mutual funds investment decisions and how they impact security prices, endogenous community effects on investors’ investment decisions and equilibrium prices, and the predictive role of changes in trading volume and investors’ order flow on security returns.
  • Leonard Kostovetsky: His papers focus on the way that political beliefs and connections affect the decisions of financial investors and corporate managers.
  • John B. Long Jr.: His interests include portfolio theory, asset-pricing theory, financial aspects of business cycles, and applied price theory.
  • Robert Novy-Marx: His research focuses primarily on asset pricing, both theoretical and empirical, though he also works in industrial organization, public finance, and real estate.
  • Dmitry Orlov: He has research interests in several areas of finance and economics including employee performance evaluations, markets for repurchase agreements, and coherent risk measurement.
  • Robert Ready: His research interests are in asset pricing, macrofinance, and international finance. His recent research focuses primarily on commodity prices.
  • G. William Schwert: His interests include portfolio and capital-market theory, econometrics, and time-series analysis and the effects of public regulation on business.
  • Clifford W. Smith Jr.: His interests include option pricing, corporate financial policy, and financial intermediation.
  • Erin Smith: Her interests are in shareholder value.
  • Giulio Trigilia: His research interests are (primary) Information and financial economics; applied theory; and (secondary) Long run history of financial markets and (especially) securities
  • Jerold B. Warner: His interests include portfolio theory, capital markets, and corporate finance.

Recent Research in Finance

How Can Timing Optimize Employee Effort?

Dmitry Orlov

What is the optimal way for supervisors to design performance evaluations and incentive pay? A paper by Simon professor Dmitry Orlov shows that partial transparency about employee performance is the way to go. “Well-managed firms are neither fully transparent nor fully opaque with their employees,” Orlov writes in “Optimal Design of Internal Disclosure.” Giving feedback to employees can improve productivity, Orlov says. However, the greater the feedback, the higher the cost of compensation over time.

Media Mentions Boost Mutual Funds

Ron Kaniel

It pays to be a mutual fund mentioned in Category Kings, the prominent Wall Street Journal feature. The Journal’s quarterly rankings give a surprisingly heavy boost to mutual funds that make it into the Top 10, according to research by Simon professor Ron Kaniel and coauthor Robert Parham, a current PhD student. They found that the quarterly capital flows of Top 10 funds grew an average of 31 percent more than those of funds just missing the list. Read more about Media Mentions here.

Measuring Risk in the Global Market

Robert Ready, Nikolai Roussanov, and Colin Ward

New research by Simon assistant professor Robert Ready and two coauthors provides a model for understanding global economic risk as it relates to a country’s main industry and export. Countries differ fundamentally in what they produce and, as a result, how they relate to the global economy. The result is a difference in risk associated with investing in their securities. Read more about Measuring Risk in the Global Market.

Measuring a Prolific Career

G. William Schwert

The remarkable career of Eugene Fama gets a by-the-numbers look in a new paper co-authored by Simon professor G. William Schwert. Read more about "Gene Fama's Impact: A Quantitative Analysis".

Investment Unfazed by Interest Rates

Jerold Warner

How is corporate investment affected when changes in profits, stock returns, market uncertainty, and interest rates come into play? Read more about “The Behavior of Aggregate Corporate Investment”.

Looking at Liquidity Before Litigation

Frank Torchio and Sunita Surana

A new paper by Simon adjunct lecturer Frank Torchio ’82S (MBA) and colleague Sunita Surana provides new insight into the proper way to perform a discounted cash flow valuation for fair-value assessments. Read more about Looking at Liquidity Before Litigation.

 

 

 

 
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