More from the Author

• 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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• Case | HBS Case Collection | July 2019

  At-Bay Cyber Insurance

  Marco Di Maggio and David Lane

  At-Bay was a cyber insurance startup that offered companies coverage against a wide array of cyber risks—exposure to which the firm was able to quickly assess and price on the basis of technical expertise that traditional insurance carriers lacked. In mid-2019, At-Bay was working to build underwriting revenue ahead of a Series B round of venture funding that the company hoped to receive by year’s end. This required not only scaling its underwriting capacity and convincing insurance brokers to include the startup among the carriers they quoted to their corporate clients, but also ensuring that At-Bay avoided the temptation to grow revenues by taking on riskier clients than it might otherwise prefer.

  Keywords: Business Startups; Disruptive Innovation; Risk Management; Product Marketing; Distribution Channels; Information Technology; Salesforce Management; Insurance Industry;

  Citation:

  Di Maggio, Marco, and David Lane. "At-Bay Cyber Insurance." Harvard Business School Case 220-005, July 2019.  View Details

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• Technical Note | HBS Case Collection | October 2018 (Revised July 2019)

  The Brand Management of Places

  E. Ofek and Nathaniel Schwalb

  The brand management of places, such as countries, cities and regions, has received increasing attention in recent years. The associations, impressions and reputations that people have of a certain place can have a big impact in a number of areas – from tourism, to exports, to drawing talent, to securing foreign investment, to public diplomacy, and to political leadership. Consequently, a number of stakeholders may attempt to influence the perceptions that people have about a place in a way that is conducive to their goals. This background note lays the ground for instructors to expose students to the concept of a place brand, allow examining the ways in which it may be influenced, and examine the motivations of the various actors. The note provides ample examples of countries and cities that have actively tried to shape their brand identity and further exposes students to recent trends and vehicles (such as social media) relevant for the branding of places. The note raises a set of issues on this topic that can serve as the basis for a rich classroom discussion.

  Keywords: Place Brand; Destination Brand; Nation Brand; Public Diplomacy; Brands and Branding; Management; Perception; Public Opinion;

  Citation:

  Ofek, E., and Nathaniel Schwalb. "The Brand Management of Places." Harvard Business School Technical Note 519-007, October 2018. (Revised July 2019.)  View Details

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