Malcolm P. Baker

Robert G. Kirby Professor of Business Administration
Unit Head, Finance

Malcolm Baker is the Robert G. Kirby Professor of Business Adminstration at the Harvard Business School and the program director for corporate finance at the National Bureau of Economic Research. 

His research is in the areas of behavioral finance, corporate finance, and capital markets, with a primary focus on the interactions among corporate finance, investor behavior, and inefficiency in capital markets. Professor Baker has made numerous presentations to academic and practitioner audiences. His research awards include the 2002 Brattle Prize, given annually by the American Finance Association to the best corporate finance paper in the Journal of Finance, second place for the 2012 Jensen Prize, given annually by the Journal of Financial Economics, the 2011 Sharpe Award, given annually by the Journal of Financial and Quantitative Analysis, and the 2012 Graham and Dodd Scroll, given annually by the Financial Analysts Journal. He has served as associate editor for the Journal of Finance and the Review of Financial Studies

Baker has taught in the first and second year of the MBA program at Harvard Business School and in several executive education programs. In 2006, he developed a new elective course in behavioral finance. 

Baker received a Ph.D. in business economics from Harvard University, an M.Phil. in finance from Cambridge University, and a bachelor's degree in applied mathematics-economics from Brown University. Before beginning his doctoral studies, he was a senior associate at Charles River Associates and a member of the US Olympic rowing team.

Outside of Harvard, he serves as a director of research at Acadian Asset Management, an institutional asset management firm focusing in active global and international equity strategies, and as a board member at TAL International, a global leader in container leasing.

  1. Overview

    by Malcolm P. Baker

    My current teaching includes the second half of the required finance curriculum - Finance 2 - and a second year investments course in Behavioral Finance and Value Investing, which I am co-teaching with Robin Greenwood. In the past, I have taught in the first half of the required curriculum - Finance 1 - and in executive courses, including Finance for Senior Executives and the Investment Management Workshop.
  2. MBA Elective Curriculum: Behavioral and Value Investing

    by Malcolm P. Baker

    Capital markets are not efficient in the way that textbook theory suggests. Through their trading behavior, biased individual investors and rule-bound institutions can cause prices to deviate significantly from fundamental value. These deviations create opportunities and risks for sophisticated investors. The first part of the course develops a framework for understanding what drives deviations from market efficiency. This covers the two building blocks of behavioral finance: investor psychology and so-called limits-to-arbitrage. The second part of the course - value investing - is focused on identifying and measuring these deviations in practice. The course takes a broad view of value investing. This means that we will cover many of the traditional ideas emphasized in early treatments of value investing - such as the concept of franchise value - while also covering situations in which the broader themes of behavioral finance can help us make better investments. The applications studied in the course appear in markets in the U.S. and abroad.

  3. MBA Required Curriculum: Finance 2

    by Malcolm P. Baker

    This course builds on the foundation developed in FIN1, adding a focus on financing and deal structure. FIN2 extends the valuation frameworks of FIN1 to include the impact of financing decisions on firm value. The course is divided into four parts.

    §  Financing and financial policy. Choosing the right mix of debt, equity, and other securities.

    §  Integrated financing and valuation. Taking into account the impact of financing decisions and deal structure on valuation.

    §  Options and risk management. Using options in employee incentive contracts, in the design of securities, and in risk management.

    §  Mergers and acquisitions. Combining firms to create value, and using deal structure in merger negotiations.

  4. Executive Education: Finance for Senior Executives

    by Malcolm P. Baker

    Finance for Senior Executives provides the frameworks to strategically use financial resources and position your company for future success. By examining corporate finance from both internal and external perspectives, this HBS Executive Education leadership development offering enables you to establish the best financial systems for management and control—and utilize capital markets for the most profitable outcomes. You will leave with the strategies and tools to improve your company's bottom line and to take on new responsibilities over time.

    Specifically, you will be better able to:

    §  Position your company to compete in today's volatile global marketplace and to seize opportunities when the market expands

    §  Establish successful and realistic performance plans, incentives, and financial controls at the corporate and divisional levels

    §  Employ proven forecasting methods that enable you to predict and monitor outcomes with greater confidence

    §  Recognize and address biases within financial systems and structures

    §  Master the workings of capital structure and capital markets to ensure better strategic decision making in an economic downturn

    §  Balance profit, growth, and control in highly dynamic environments

    §  Understand and implement optimal restructuring strategies

    §  Work more effectively with a diverse range of colleagues in financial roles inside and outside your organization