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Christopher J. Malloy

Christopher J. Malloy

Sylvan C. Coleman Professor of Financial Management (Leave of Absence)

Sylvan C. Coleman Professor of Financial Management (Leave of Absence)

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Christopher Malloy is the Sylvan C. Coleman Chaired Professor of Financial Management in the Finance Unit at Harvard Business School, and a Research Associate at the National Bureau of Economic Research.  Prior to joining HBS in 2007, Professor Malloy was an Assistant Professor in the Finance Department at London Business School, where he was on faculty from 2003-2007, and previously worked for the Federal Reserve Board in Washington D.C.  Professor Malloy has consulted with governments, central banks, hedge funds, and technology firms, and has provided expert witness testimony in investment-related lawsuits. 

Professor Malloy has taught courses in Investment Strategies, Behavioral Finance, FinTech, Family Office Management, Stock Pitching, Corporate Finance, and Equity Investment Management, and currently co-heads the HBS executive program Finance for Senior Executives.  His research focuses on topics in behavioral finance, asset pricing, investments, fintech, family office management, labor economics, and empirical corporate finance.  His research has appeared in the Journal of Political Economy, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies, and has been described in The Financial Times, The Wall Street Journal, The New York Times, and various other media outlets. Professor Malloy received a PhD in Finance and an MBA from The University of Chicago Graduate School of Business, and a BA in Economics from Yale University.

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Finance
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Christopher J. Malloy
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Finance
Entrepreneurial Management
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Featured Work Publications Research Summary Awards & Honors
Do Powerful Politicians Cause Corporate Downsizing?
This paper employs a new empirical approach for identifying the impact of government spending on the private sector. Our key innovation is to use changes in congressional committee chairmanship as a source of exogenous variation in state-level federal xpenditures. In doing so, we show that fiscal spending shocks appear to significantly dampen corporate sector investment and employment activity. This retrenchment follows both Senate and House committee chair changes, occurs in large and small firms and within large and small states, and is most pronounced among geographically-concentrated firms. The effects are economically meaningful and the mechanism - entirely distinct from the more traditional interest rate and tax channels - suggests new considerations in assessing the impact of government spending on private sector economic activity.
Legislating Stock Prices
In this paper we demonstrate that legislation has a simple, yet previously undetected impact on firm stock prices.  While it is understood that the government and firms have an important relationship, it remains difficult to determine which firms any given piece of legislation will affect, and how it will affect them.  By observing the actions of legislators whose constituents are the affected firms, we can gather insights into the likely impact of government legislation on firms.  Specifically, focusing attention on “interested” legislators’ behavior captures important information seemingly ignored by the market.  A long-short portfolio based on these legislators’ views earns abnormal returns of over 90 basis points per month following the passage of legislation.  Further, the more complex the legislation, the more difficulty the market has in assessing the impact of these bills.  Consistent with the legislator incentive mechanism, the more concentrated the legislator’s interest in the industry, the more informative are her votes for future returns.

Christopher Malloy is the Sylvan C. Coleman Chaired Professor of Financial Management in the Finance Unit at Harvard Business School, and a Research Associate at the National Bureau of Economic Research.  Prior to joining HBS in 2007, Professor Malloy was an Assistant Professor in the Finance Department at London Business School, where he was on faculty from 2003-2007, and previously worked for the Federal Reserve Board in Washington D.C.  Professor Malloy has consulted with governments, central banks, hedge funds, and technology firms, and has provided expert witness testimony in investment-related lawsuits. 

Professor Malloy has taught courses in Investment Strategies, Behavioral Finance, FinTech, Family Office Management, Stock Pitching, Corporate Finance, and Equity Investment Management, and currently co-heads the HBS executive program Finance for Senior Executives.  His research focuses on topics in behavioral finance, asset pricing, investments, fintech, family office management, labor economics, and empirical corporate finance.  His research has appeared in the Journal of Political Economy, the Journal of Finance, the Journal of Financial Economics, and the Review of Financial Studies, and has been described in The Financial Times, The Wall Street Journal, The New York Times, and various other media outlets. Professor Malloy received a PhD in Finance and an MBA from The University of Chicago Graduate School of Business, and a BA in Economics from Yale University.

Featured Work
Do Powerful Politicians Cause Corporate Downsizing?
This paper employs a new empirical approach for identifying the impact of government spending on the private sector. Our key innovation is to use changes in congressional committee chairmanship as a source of exogenous variation in state-level federal xpenditures. In doing so, we show that fiscal spending shocks appear to significantly dampen corporate sector investment and employment activity. This retrenchment follows both Senate and House committee chair changes, occurs in large and small firms and within large and small states, and is most pronounced among geographically-concentrated firms. The effects are economically meaningful and the mechanism - entirely distinct from the more traditional interest rate and tax channels - suggests new considerations in assessing the impact of government spending on private sector economic activity.
Legislating Stock Prices
In this paper we demonstrate that legislation has a simple, yet previously undetected impact on firm stock prices.  While it is understood that the government and firms have an important relationship, it remains difficult to determine which firms any given piece of legislation will affect, and how it will affect them.  By observing the actions of legislators whose constituents are the affected firms, we can gather insights into the likely impact of government legislation on firms.  Specifically, focusing attention on “interested” legislators’ behavior captures important information seemingly ignored by the market.  A long-short portfolio based on these legislators’ views earns abnormal returns of over 90 basis points per month following the passage of legislation.  Further, the more complex the legislation, the more difficulty the market has in assessing the impact of these bills.  Consistent with the legislator incentive mechanism, the more concentrated the legislator’s interest in the industry, the more informative are her votes for future returns.
Journal Articles
  • Cohen, Lauren, Christopher J. Malloy, and Quoc Nguyen. "Lazy Prices." Journal of Finance 75, no. 3 (June 2020): 1371–1415. (Winner of the First Prize, Chicago Quantitative Alliance Academic Paper Competition, 2016. Winner of the Jack Treynor Prize for superior work in the field of investment management and financial markets, sponsored by the Q-Group,The Institute for Quantitative Research in Finance, 2016. Winner of the Hillcrest Behavioral Finance Prize, 2016.) View Details
  • Chen, Huaizhi, Lauren Cohen, Umit Gurun, Dong Lou, and Christopher J. Malloy. "IQ from IP: Simplifying Search in Portfolio Choice." Journal of Financial Economics 138, no. 1 (October 2020): 118–137. (Winner of the First Prize, Crowell Memorial Award for Best Paper in Quantitative Investments, PanAgora Asset Management, 2019.) View Details
  • Cohen, Lauren, Dong Lou, and Christopher J. Malloy. "Casting Conference Calls." Management Science 66, no. 11 (November 2020): 5015–5039. (Winner of the First Prize, Crowell Memorial Award for Best Paper in Quantitative Investments, PanAgora Asset Management, 2014.) View Details
  • Cohen, Lauren, Joshua D. Coval, and Christopher J. Malloy. "Reply: Do Powerful Politicians Really Cause Corporate Downsizing?" Journal of Political Economy 125, no. 6 (December 2017): 2232–2237. View Details
  • Cohen, Lauren, Dong Lou, and Christopher J. Malloy. "Cloaked Trading." Journal of Investment Consulting 17, no. 2 (2016): 69–80. (Winner of the Best Paper Prize of the Journal of Investment Consulting Academic Paper Competition, 2016 ; Winner of the Institute for Quantitative Investment Research (INQUIRE) Grant, 2014.) View Details
  • Cohen, Lauren, Umit Gurun, and Christopher J. Malloy. "Resident Networks and Corporate Connections: Evidence from World War II Internment Camps." Journal of Finance 72, no. 1 (February 2017): 207–248. (Winner of First Prize, the Inaugural Hakan Orbay Research Award, 2015.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Friends in High Places." American Economic Journal: Economic Policy 6, no. 3 (August 2014): 63–91. View Details
  • Cohen, Lauren, Karl Diether, and Christopher Malloy. "Legislating Stock Prices." Journal of Financial Economics 110, no. 3 (December 2013): 574–595. (Winner of Fama-DFA Prize for the Best Paper Published in the Journal of Financial Economics in Asset Pricing (Distinguished Paper) 2013.) View Details
  • Cohen, Lauren, Karl Diether, and Christopher Malloy. "Misvaluing Innovation." Review of Financial Studies 26, no. 3 (March 2013): 635–666. View Details
  • Cohen, Lauren, Joshua Coval, and Christopher J. Malloy. "Do Powerful Politicians Cause Corporate Downsizing?" Journal of Political Economy 119, no. 6 (December 2011): 1015–1060. (Click here for a response to Snyder and Welch, click here for the data, and click here for the code.) View Details
  • Cohen, Lauren, Christopher Malloy, and Lukasz Pomorski. "Decoding Inside Information." Journal of Finance 67, no. 3 (June 2012): 1009–1043. (Winner of Chicago Quantitative Alliance Academic Paper Competition. First Prize presented by Chicago Quantitative Alliance.  Winner of Institute for Quantitative Investment Research (INQUIRE) Grant presented by Institute for Quantitative Investment Research.) View Details
  • Cohen, Lauren, Andrea Frazzini, and Christopher Malloy. "Hiring Cheerleaders: Board Appointments of 'Independent' Directors." Management Science 58, no. 6 (June 2012): 1039–1058. View Details
  • Cohen, Lauren, and Christopher J. Malloy. "The Power of Alumni Networks." Harvard Business Review 88, no. 10 (October 2010). View Details
  • Cohen, Lauren H., Christopher J. Malloy, and Andrea Frazzini. "Sell-Side School Ties." Journal of Finance 65, no. 4 (August 2010): 1409–1437. (Winner of Smith Breeden Prize for the Best Paper Published in the Journal of Finance in Asset Pricing (Distinguished Paper) 2010.) View Details
  • Malloy, Christopher J., Tobias J. Moskowitz, and Annette Vissing-Jorgensen. "Long-Run Stockholder Consumption Risk and Asset Returns." Journal of Finance 64, no. 6 (December 2009): 2427–2480. (Finalist for the 2010 Smith Breeden Prize for the best paper in the Journal of Finance.) View Details
  • Ljungqvist, Alexander, Christopher J. Malloy, and Felicia Marston. "Rewriting History." Journal of Finance 64, no. 4 (August 2009): 1935–1960. View Details
  • Cohen, Lauren, Karl B. Diether, and Christopher J. Malloy. "Shorting Demand and Predictability of Returns." Journal of Investment Management 7, no. 1 (First Quarter 2009): 36–52. View Details
  • Cohen, Lauren, Andrea Frazzini, and Christopher J. Malloy. "The Small World of Investing: Board Connections and Mutual Fund Returns." Journal of Political Economy 116, no. 5 (October 2008): 951–979. (Winner of the Barclays Global Investors Award, Best Paper in Asset Pricing, European Finance Association 2007.) View Details
  • Cohen, Lauren, Karl B. Diether, and Christopher J. Malloy. "Supply and Demand Shifts in the Shorting Market." Journal of Finance 62, no. 5 (October 2007): 2061–2096. (Winner of Smith Breeden Prize for the Best Paper Published in the Journal of Finance in Asset Pricing (Distinguished Paper) 2007.) View Details
  • Malloy, Christopher J. "The Geography of Equity Analysis." Journal of Finance 60, no. 2 (April 2005): 719–755. (

    Nominated for Smith Breeden Prize. Best Paper For the best finance research paper published in the Journal of Finance presented by Smith Breeden Associates, Inc.​

    ) View Details
  • Diether, Karl B., Christopher J. Malloy, and Anna Scherbina. "Differences of Opinion and the Cross-Section of Stock Returns." Journal of Finance 57, no. 5 (October 2002): 2113–2141. View Details
Cases and Teaching Materials
  • Cohen, Lauren, Christopher J. Malloy, and Elena Corsi. "CIR Group: Passing Wealth through the Generations." Harvard Business School Teaching Note 220-038, October 2019. View Details
  • Cohen, Lauren, Christopher J. Malloy, and Elena Corsi. "CIR Group: Passing Wealth through the Generations." Harvard Business School Case 219-060, December 2018. View Details
  • Malloy, Christopher J., Lauren H. Cohen, Hao Gao, and Dawn H. Lau. "Junson Capital: Building an Institutionalized Family Office." Harvard Business School Case 219-069, December 2018. (Revised January 2019.) View Details
  • Braun, Alexander, Lauren H. Cohen, Christopher J. Malloy, and Jiahua Xu. "Introduction to Life Settlements." Harvard Business School Background Note 218-127, June 2018. View Details
  • Malloy, Christopher, Lauren Cohen, and Essie Alamsyah. "Shanda Family Office." Harvard Business School Case 218-102, April 2018. (Revised September 2019.) View Details
  • Malloy, Christopher J., Lauren H. Cohen, and Anthony K. Woo. "Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China." Harvard Business School Teaching Note 218-117, May 2018. View Details
  • Braun, Alexander, Lauren H. Cohen, Christopher J. Malloy, and Jiahua Xu. "Ashar Group: Brokers and Co-opetition in the Life Settlement Industry." Harvard Business School Case 218-109, May 2018. (Revised June 2018.) View Details
  • Cohen, Lauren, Christopher Malloy, and William Powley. "The Market for Justice: Burford Capital and the Litigation Finance Industry." Harvard Business School Case 218-007, October 2017. View Details
  • Malloy, Christopher J., Lauren H. Cohen, and Inakshi Sobti. "Chaudhary Group: Rebuilding Nepal (B)." Harvard Business School Supplement 218-110, March 2018. View Details
  • Malloy, Christopher J., Lauren H. Cohen, and Inakshi Sobti. "Chaudhary Group: Rebuilding Nepal." Harvard Business School Case 218-100, March 2018. View Details
  • Malloy, Christopher J., Lauren H. Cohen, and Anthony K. Woo. "Lufax: FinTech and the Transformation of Wealth Management in China." Harvard Business School Case 218-088, March 2018. View Details
  • Cohen, Lauren, Christopher Malloy, and William Powley. "Artificial Intelligence and the Machine Learning Revolution in Finance: Cogent Labs and the Google Cloud Platform (GCP)." Harvard Business School Case 218-080, February 2018. (Revised March 2018.) View Details
  • Malloy, Christopher J., Lauren H. Cohen, and Anthony K. Woo. "Dianrong: Marketplace Lending, Blockchain, and 'The New Finance' in China." Harvard Business School Case 218-043, September 2017. (Revised June 2019.) View Details
  • Cohen, Lauren, Tom Grant, Christopher Malloy, and William Powley. "Disintermediating the Banks: ThinCats and the Peer-to-Peer Lending Industry." Harvard Business School Case 217-007, July 2016. View Details
  • Cohen, Lauren, Christopher Malloy, and Matthew Foreman. "Domeyard: Starting a High-Frequency Trading (HFT) Hedge Fund." Harvard Business School Case 215-036, April 2015. View Details
  • Cohen, Lauren, and Christopher J. Malloy. "AQR's Momentum Funds (A) (CW)." Harvard Business School Spreadsheet Supplement 213-722, February 2013. View Details
  • Cohen, Lauren, and Christopher J. Malloy. "Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market (CW)." Harvard Business School Spreadsheet Supplement 213-713, February 2013. View Details
  • Cohen, Lauren, and Christopher J. Malloy. "AQR's Delta Strategy (CW)." Harvard Business School Spreadsheet Supplement 213-711, February 2013. View Details
  • Cohen, Lauren, and Christopher Malloy. "Quadriserv and the Short Selling Market." Harvard Business School Case 212-021, November 2011. (Revised April 2012.) View Details
  • Cohen, Lauren, Christopher Malloy, and Timothy Gray. "Quadriserv and the Short Selling Market (TN)." Harvard Business School Teaching Note 212-037, November 2011. (Revised April 2012.) View Details
  • Cohen, Lauren, Christopher Malloy, and Timothy Gray. "Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market (TN)." Harvard Business School Teaching Note 212-069, January 2012. (Revised February 2013.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Fundamental Analysis in Emerging Markets: Autoweb Holdings." Harvard Business School Case 212-022, September 2011. (Revised March 2012.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Fundamental Analysis in Emerging Markets: Tren Anuncio Ràpido." Harvard Business School Case 212-023, September 2011. (Revised March 2012.) View Details
  • Bergstresser, Daniel, Lauren Cohen, Randolph B. Cohen, and Christopher Malloy. "AQR's DELTA Strategy." Harvard Business School Case 212-038, October 2011. (Revised March 2012.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Dimensional Fund Advisors (DFA)'s Entry into the Retirement Market." Harvard Business School Case 212-068, January 2012. (Revised March 2012.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Introduction to Short Selling." Harvard Business School Background Note 212-079, March 2012. (Revised March 2012.) View Details
  • Bergstresser, Daniel, Lauren Cohen, Christopher Malloy, Randolph B. Cohen, and Timothy Gray. "AQR's DELTA Strategy (TN)." Harvard Business School Teaching Note 212-084, March 2012. (Revised February 2013.) View Details
  • Bergstresser, Daniel Baird, Lauren H. Cohen, Randolph B. Cohen, and Christopher J. Malloy. "AQR's Momentum Funds (A)." Harvard Business School Case 211-025, September 2010. (Revised March 2012.) View Details
  • Bergstresser, Daniel, Lauren Cohen, Christopher Malloy, Randolph B. Cohen, and Timothy Gray. "AQR's Momentum Funds (TN) (A) and (B)." Harvard Business School Teaching Note 212-083, March 2012. (Revised February 2013.) View Details
  • Malloy, Christopher J. "Alpha: The Market for Information." Harvard Business School Module Note 212-080, March 2012. View Details
  • Malloy, Christopher. "Recorded Future: Searching the Web for Alpha." Harvard Business School Case 212-057, December 2011. (Revised March 2012.) View Details
  • Malloy, Christopher, and Timothy Gray. "Recorded Future: Searching the Web for Alpha (TN)." Harvard Business School Teaching Note 212-078, March 2012. View Details
  • Cohen, Lauren, Christopher Malloy, and Timothy Gray. "Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures (TN)." Harvard Business School Teaching Note 212-066, January 2012. (Revised March 2012.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Business Intelligence Advisors (BIA), Inc.: Finding the Hidden Meaning in Corporate Disclosures." Harvard Business School Case 212-031, October 2011. (Revised March 2012.) View Details
  • Cohen, Lauren, Christopher Malloy, and Tim Gray. "Fundamental Analysis in Emerging Markets: Autoweb Holdings and Tren Anuncio Ràpido (TN)." Harvard Business School Teaching Note 212-043, March 2012. View Details
  • Cohen, Lauren H., and Christopher J. Malloy. "Miracle Life Inc. (TN)." Harvard Business School Teaching Note 210-069, April 2010. (Revised September 2011.) View Details
  • Bergstresser, Daniel Baird, Lauren H. Cohen, Randolph B. Cohen, and Christopher J. Malloy. "AQR's Momentum Funds (B)." Harvard Business School Supplement 211-075, April 2011. (Revised May 2011.) View Details
  • Cohen, Lauren, and Christopher Malloy. "Miracle Life, Inc." Harvard Business School Case 210-039, November 2009. (Revised May 2017.) View Details
  • Cohen, Lauren H., and Christopher J. Malloy. "PlanetTran." Harvard Business School Case 209-029, October 2008. (Revised March 2010.) View Details
  • Cohen, Lauren H., and Christopher J. Malloy. "PlanetTran (TN)." Harvard Business School Teaching Note 209-120, March 2009. (Revised February 2010.) View Details
  • Cohen, Lauren H., Joshua D. Coval, and Christopher J. Malloy. "Tottenham Hotspur plc." Harvard Business School Case 209-059, November 2008. (Revised August 2012.) View Details
  • Cohen, Lauren H., Joshua D. Coval, and Christopher J. Malloy. "Tottenham Hotspur plc (TN)." Harvard Business School Teaching Note 209-121, March 2009. (Revised August 2012.) View Details
Research Summary

For Professor Malloy's recent articles and working papers, please visit his personal website >>

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Awards & Honors
Won a 2010 Smith Breeden Distinguished Paper Honor for the Best Paper in the Journal of Finance for his paper with Lauren Cohen and Andrea Frazzini, “Sell-Side School Ties” (August 2010).
Won the 2007 Smith Breeden Distinguished Paper Prize for the Best Paper in the Journal of Finance for his paper with Lauren Cohen and Karl B. Diether, "Supply and Demand Shifts in the Shorting Market" (October 2007).
Winner of an Institute for Quantitative Investment Research (INQUIRE) Grant in 2009 for "Decoding Inside Information" (NBER Working Paper Series, No. 16454, October 2010) with Lauren Cohen and Lukasz Pomorski.
Won the 2010 First Prize Chicago Quantitative Alliance Academic Paper Competition with Lauren H. Cohen for their paper with Lukasz Pomorski, "Decoding Inside Information" (NBER Working Paper Series, No. 16454, October 2010).
Winner of the 2014 Crowell Memorial Prize for Best Paper on Quantitative Investing from PanAgora Asset Management for "Playing Favorites: How Firms Prevent the Revelation of Bad News" (with Lauren Cohen and Dong Lou, 2014).
Winner of the 2013 Fama-DFA Second Place Prize for the Best Paper Published in the Journal of Financial Economics in the Areas of Capital Markets and Asset Pricing for "Legislating Stock Prices" (with Lauren Cohen and Karl Diether, December 2013).
Additional Information
  • Curriculum Vitae
  • Christopher Malloy's Homepage
  • Working Knowledge Articles
  • Harvard Law School Forum on Corporate Governance and Financial Regulation
  • Digital Initiative
Areas of Interest
  • asset pricing
  • behavioral finance
  • investment management
  • investor behavior
  • market efficiency
  • Additional Topics
  • boards of directors
  • conflicts of interest
  • corporate finance
  • decision-making
  • entrepreneurial finance
  • financial intermediaries
  • hedge funds
  • institutional investing
  • mutual funds
  • networks
  • political economy
  • social interactions
  • Industries
  • asset management
  • brokerage
  • financial services
  • retail financial services
In The News

In The News

    • 13 Jun 2012
    • Enterprising Investor

    Behavioral Intelligence: Can It Help Managers Generate Alpha?

    • 13 Aug 2012
    • Business Insider

    Here's How to Use Congress to Beat the Stock Market

Additional Information
Curriculum Vitae
Christopher Malloy's Homepage
Working Knowledge Articles
 More
Harvard Law School Forum on Corporate Governance and Financial Regulation
Digital Initiative
 Less

Areas of Interest

asset pricing
behavioral finance
investment management
investor behavior
market efficiency
 More

Additional Topics

boards of directors
conflicts of interest
corporate finance
decision-making
entrepreneurial finance
financial intermediaries
hedge funds
institutional investing
mutual funds
networks
political economy
social interactions

Industries

asset management
brokerage
financial services
retail financial services
 Less

In The News

    • 13 Jun 2012
    • Enterprising Investor

    Behavioral Intelligence: Can It Help Managers Generate Alpha?

    • 13 Aug 2012
    • Business Insider

    Here's How to Use Congress to Beat the Stock Market

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