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• Case | HBS Case Collection | August 2019

  BlueVine Capital: Growth Factors

  Marco Di Maggio and Nathaniel Schwalb

  The start-up BlueVine Capital Inc. (BlueVine) used data and technology to help finance small businesses via factoring and lines of credit. The case explains the small business financing market in mid-2010s, how CEO Eyal Lifshitz identified the opportunity for BlueVine, and how he built the company through its first five years of operations. Through the case, Lifshitz and his team discover insights about their small business customers that inspire them to change their product portfolio. In December 2018, Lifshitz must decide which new products to launch next.

  Keywords: Business Startups; Small Business; Financing and Loans; Innovation Leadership; Financial Services Industry; Technology Industry;

  Citation:

  Di Maggio, Marco, and Nathaniel Schwalb. "BlueVine Capital: Growth Factors." Harvard Business School Case 220-006, August 2019.  View Details

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• Case | HBS Case Collection | August 2019

  Fossil Fuel Divestment

  Michael W. Toffel and Sarah Gulick

  The President of Harvard University is facing growing pressure from students, alumni, and other climate change activists that are urging the university to divest its multi-billion dollar endowment from fossil fuel companies. The case summarizes the arguments for and against Harvard divesting, examining past examples of Harvard’s investment decisions and the financial implications of divestment.

  Keywords: divestment; Higher Education; Corporate Social Responsibility and Impact; Environmental Sustainability; Weather and Climate Change; Public Opinion; Education Industry;

  Citation:

  Toffel, Michael W., and Sarah Gulick. "Fossil Fuel Divestment." Harvard Business School Case 620-026, August 2019.  View Details

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• Working Paper | HBS Working Paper Series | 2019

  The Value of Intermediation in the Stock Market

  Marco Di Maggio, Mark Egan and Francesco Franzoni

  Brokers continue to play a critical role in intermediating institutional stock market transactions. More than half of all institutional investor order flow is still executed by high-touch (non-electronic) brokers. Despite the continued importance of brokers, we have limited information on what drives investors' choices among them. We develop and estimate an empirical model of broker choice that allows us to quantitatively examine each investors' responsiveness to execution costs and access to research and order flow information. Studying over 300 million institutional trades, we find that investor demand is relatively inelastic with respect to commissions and that investors are willing to pay a premium for access to top research analysts and order-flow information. There is substantial heterogeneity across investors. Relative to other investors, hedge funds tend to be more price insensitive, place less value on sell-side research, and place more value on order-flow information. Furthermore, using trader-level data, we find that investors are more likely to trade with traders who are located physically closer and are less likely to trade with traders that have misbehaved in the past. Lastly, we use our empirical model to investigate the unbundling of equity research and execution services related to the MiFID II regulations. While under-reporting for the average firm is relatively small (4%), we find that the bundling of execution and research allows some institutional investors to under-report management fees by up to 15%.

  Keywords: financial intermediation; Institutional investors; research analysts; Financial Institutions; Investment; Financial Services Industry;

  Citation:

  Di Maggio, Marco, Mark Egan, and Francesco Franzoni. "The Value of Intermediation in the Stock Market." Harvard Business School Working Paper, No. 20-016, August 2019.  View Details

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