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Finance

Finance

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Overview Faculty Curriculum Seminars & Conferences Awards & Honors Doctoral Students
    • May 2022
    • Case

    Rawbank's Illico Cash: Can 'Fast Money' Overcome Cash Dependency in the DRC?

    By: Lauren Cohen and Grace Headinger

    Thomas de Dreux-Brézé, the Head of Strategy and Project Management at Rawbank Congo in the Democratic Republic of the Congo (DRC), was perplexed as he reviewed annual adoption rates for the bank’s launch of Illico Cash 2.0. As the bank’s mobile money app, Illico Cash literally promised “Fast Cash” for its users who also had a Rawbank account. Unlike most mobile money platforms on the African continent, Illico cash was backed by an established bank – not a technology or a telecommunications company. As he contemplated Rawbank’s next strategic move, the future of Illico Cash, and the bank’s future moves into digital payment systems in the DRC, he saw multiple challenges to Illico Cash’s adoption in several regions across the DRC. Seeing lower-than-anticipated usage rates, he wondered if local preferences for cash seemed just too powerful to overcome. Can the bank’s digital payments efforts overcome hurdles in local infrastructure, entrenched interests that favored cash, and currency instability? Would crafting a digital ecosystem be a worthwhile investment for Rawbank without a wholesale structural shift in beliefs?

    • May 2022
    • Case

    Rawbank's Illico Cash: Can 'Fast Money' Overcome Cash Dependency in the DRC?

    By: Lauren Cohen and Grace Headinger

    Thomas de Dreux-Brézé, the Head of Strategy and Project Management at Rawbank Congo in the Democratic Republic of the Congo (DRC), was perplexed as he reviewed annual adoption rates for the bank’s launch of Illico Cash 2.0. As the bank’s mobile money app, Illico Cash literally promised “Fast Cash” for its users who also had a Rawbank account....

    • 2022
    • Chapter

    Crises and Collective Purpose: Distraction or Liberation?

    By: P. Tufano

    • 2022
    • Chapter

    Crises and Collective Purpose: Distraction or Liberation?

    By: P. Tufano

    • Article

    The Cross Section of Bank Value

    By: Mark Egan, Stefan Lewellen and Adi Sunderam

    We study the determinants of value creation in U.S. commercial banks. We develop novel measures of individual banks' productivities at collecting deposits and making loans. We relate these measures to bank market values and find that deposit productivity is responsible for about two-thirds of the value of the median bank, as well as the majority of variation in value across banks. We show that variation in productivity is driven by differences across banks in technology, customer demographics, and market power. We also find evidence of synergies between deposit-taking and lending. Our findings suggest that there is significant heterogeneity in banks' abilities to capture value by manufacturing safe assets.

    • Article

    The Cross Section of Bank Value

    By: Mark Egan, Stefan Lewellen and Adi Sunderam

    We study the determinants of value creation in U.S. commercial banks. We develop novel measures of individual banks' productivities at collecting deposits and making loans. We relate these measures to bank market values and find that deposit productivity is responsible for about two-thirds of the value of the median bank, as well as the majority...

About the Unit

Our strategy is to assemble and nurture a faculty whose interests and skills complement each other, and who work well together:

a) to produce a broad range of finance-related research that is published in top-tier scientific and practitioner journals, and that addresses issues of present and future importance to managers (including regulators and policy makers);

b) to develop highly-relevant and intellectually rigorous MBA and executive education courses; and

c) to mentor future academics through the Business Economics doctoral program.

Our applied focus and access to business organizations are major advantages which are reinforced by our students and our case-based approach. We have a faculty with broad expertise, and we have resources, field contacts, and institutional support, all of which we can leverage to do richer work and be more productive than we could at other institutions.

Recent Publications

Valuing Yahoo! in 2013 (Abridged)

By: Luis M. Viceira
  • May 2022 |
  • Supplement |
  • Faculty Research
Citation
Purchase
Related
Viceira, Luis M. "Valuing Yahoo! in 2013 (Abridged)." Harvard Business School Spreadsheet Supplement 222-717, May 2022.

Rawbank's Illico Cash: Can 'Fast Money' Overcome Cash Dependency in the DRC?

By: Lauren Cohen and Grace Headinger
  • May 2022 |
  • Case |
  • Faculty Research
Thomas de Dreux-Brézé, the Head of Strategy and Project Management at Rawbank Congo in the Democratic Republic of the Congo (DRC), was perplexed as he reviewed annual adoption rates for the bank’s launch of Illico Cash 2.0. As the bank’s mobile money app, Illico Cash literally promised “Fast Cash” for its users who also had a Rawbank account. Unlike most mobile money platforms on the African continent, Illico cash was backed by an established bank – not a technology or a telecommunications company. As he contemplated Rawbank’s next strategic move, the future of Illico Cash, and the bank’s future moves into digital payment systems in the DRC, he saw multiple challenges to Illico Cash’s adoption in several regions across the DRC. Seeing lower-than-anticipated usage rates, he wondered if local preferences for cash seemed just too powerful to overcome. Can the bank’s digital payments efforts overcome hurdles in local infrastructure, entrenched interests that favored cash, and currency instability? Would crafting a digital ecosystem be a worthwhile investment for Rawbank without a wholesale structural shift in beliefs?
Keywords: Fintech; Inflation; Deflation; Rural; Urban; Emerging Market; Mobile Technology; Finance; Money; Inflation and Deflation; Business Growth and Maturation; Decision Choices and Conditions; Demographics; Developing Countries and Economies; Corporate Entrepreneurship; Behavioral Finance; Currency; Banks and Banking; Commercial Banking; Financial Strategy; Rural Scope; Urban Scope; Innovation Strategy; Emerging Markets; Network Effects; Consumer Behavior; Mobile and Wireless Technology; Technology Adoption; Banking Industry; Financial Services Industry; Technology Industry; Congo, Democratic Republic of the
Citation
Educators
Related
Cohen, Lauren, and Grace Headinger. "Rawbank's Illico Cash: Can 'Fast Money' Overcome Cash Dependency in the DRC?" Harvard Business School Case 222-084, May 2022.

From GOP to NFT: Anthony Scaramucci and the Launch of Flatter NFT

By: Lauren Cohen, Richard Ryffel and Grace Headinger
  • May 2022 |
  • Case |
  • Faculty Research
Anthony Scaramucci, Managing Director of SkyBridge Capital, considered whether he should officially greenlight the launch of SkyBridge’s own NFT platform – Flatter NFT. He had led the investment firm to push first into Bitcoin and then Ethereum to make SkyBridge a central node in the crypto industry. He further believed SkyBridge could differentiate itself from OpenSea and other platforms by tying non-fungible tokens with fungible experiences. The technology behind the platform was solidly proven. However, in his head he weighed the tradeoff between launching a full platform versus other ways of investing in the space. With a potential announcement of the platform pending for the September 2021 SALT NYC conference, Scaramucci believed now was the time to make a decision. The NFT space swelled in users and value by the day. Should SkyBridge jump in or move on to another venture?
Keywords: Business Startup; Fintech; Technology; Cryptocurrency; Web3; Business Startups; Volatility; Decision Making; Entertainment; Entrepreneurship; Investment; Strategic Planning; Adoption; Competitive Advantage; Technology Adoption; Finance; Banking Industry; Financial Services Industry; Technology Industry; New York (city, NY)
Citation
Educators
Purchase
Related
Cohen, Lauren, Richard Ryffel, and Grace Headinger. "From GOP to NFT: Anthony Scaramucci and the Launch of Flatter NFT." Harvard Business School Case 222-085, May 2022.

Crises and Collective Purpose: Distraction or Liberation?

By: P. Tufano
  • 2022 |
  • Chapter |
  • Faculty Research
Citation
Read Now
Related
Tufano, P. "Crises and Collective Purpose: Distraction or Liberation?" In Business School Leadership and Crisis Exit Planning: Global Deans' Contributions on the Occasion of the 50th Anniversary of EFMD, edited by Eric Cornuel. Cambridge University Press, 2022.

The Cross Section of Bank Value

By: Mark Egan, Stefan Lewellen and Adi Sunderam
  • Article |
  • Review of Financial Studies
We study the determinants of value creation in U.S. commercial banks. We develop novel measures of individual banks' productivities at collecting deposits and making loans. We relate these measures to bank market values and find that deposit productivity is responsible for about two-thirds of the value of the median bank, as well as the majority of variation in value across banks. We show that variation in productivity is driven by differences across banks in technology, customer demographics, and market power. We also find evidence of synergies between deposit-taking and lending. Our findings suggest that there is significant heterogeneity in banks' abilities to capture value by manufacturing safe assets.
Keywords: Productivity; Banks and Banking; Valuation; Performance Productivity; Value Creation; United States
Citation
Find at Harvard
Related
Egan, Mark, Stefan Lewellen, and Adi Sunderam. "The Cross Section of Bank Value." Review of Financial Studies 35, no. 5 (May 2022): 2101–2143.

When Harry Fired Sally: The Double Standard in Punishing Misconduct

By: Mark Egan, Gregor Matvos and Amit Seru
  • May 2022 |
  • Article |
  • Journal of Political Economy
We examine gender differences in misconduct punishment in the financial advisory industry. We find evidence of a “gender punishment gap”: following an incident of misconduct, female advisers are 20% more likely to lose their jobs and 30% less likely to find new jobs relative to male advisers. Females face harsher outcomes despite engaging in misconduct that is 20% less costly and having a substantially lower propensity towards repeat offenses. The gender punishment gap in hiring and firing dissipates at firms with a greater percentage of female managers at the firm or local branch level. The gender punishment gap is not driven by gender differences in occupation (type of job, firm, market, or financial products handled), productivity, misconduct, or recidivism. We extend our analysis to explore the differential treatment of ethnic minority men and find similar patterns of “in-group” tolerance. Our evidence is inconsistent with a simple Bayesian model with profit maximizing firms and suggests instead that managers are more forgiving of missteps among members of their own gender/ethnic group.
Keywords: Financial Advisers; Brokers; Gender Discrimination; Consumer Finance; Financial Misconduct And Fraud; FINRA; Financial Institutions; Employees; Crime and Corruption; Gender; Prejudice and Bias; Personal Finance; Financial Services Industry
Citation
Find at Harvard
Read Now
Related
Egan, Mark, Gregor Matvos, and Amit Seru. "When Harry Fired Sally: The Double Standard in Punishing Misconduct." Journal of Political Economy 130, no. 5 (May 2022): 1184–1248.

Do the Right Firms Survive Bankruptcy?

By: Samuel Antill
  • Article |
  • Journal of Financial Economics
In U.S. Chapter 11 bankruptcy cases, firms are either reorganized, acquired, or liquidated. I show that decisions to liquidate often reduce creditor recovery, costing creditors billions of dollars every year. I exploit the within-district random assignment of bankruptcy judges to estimate a structural model of bankruptcy. I estimate that liquidation is frequently chosen when a reorganization would have maximized total creditor recovery. Liquidations involving "363 sales," in which managers sell assets without creditor approval, are especially harmful for creditors. I estimate that courts could dramatically improve creditor recovery by assigning liquidations using a statistical model.
Keywords: Bankruptcy; Bankruptcy Reorganization; Recovery Rate; Structural Estimation; Roy Model; 363 Sales; Insolvency and Bankruptcy; Governing Rules, Regulations, and Reforms
Citation
Find at Harvard
Related
Antill, Samuel. "Do the Right Firms Survive Bankruptcy?" Journal of Financial Economics 144, no. 2 (May 2022): 523–546.

Melio: Modernizing Payments for Small Business

By: David S. Scharfstein, Dean Xu and Danielle Golan
  • April 2022 |
  • Case |
  • Faculty Research
Citation
Educators
Purchase
Related
Scharfstein, David S., Dean Xu, and Danielle Golan. "Melio: Modernizing Payments for Small Business." Harvard Business School Case 222-076, April 2022.
More Publications

In the News

    • 03 May 2022
    • Urban Land

    Grid-Efficient Buildings and High-Performance Districts Potentially Drive Carbon Positive Development

    Re: John Macomber
    • 11 Apr 2022
    • TechCrunch

    A Look at Six New Funds Begs the Question: Is a Slowdown Really Coming?

    Re: Josh Lerner
    • 29 Mar 2022
    • Bloomberg

    Private Equity’s Opaque Costs Mystify the Pensions That Pay Them

    Re: Emil Siriwardane
→More Faculty News

HBS Working Knowledge

    • 18 May 2022

    Are Banks the ‘Bad Guys’? Overdraft Fees Are Crushing Low-Income Customers

    Re: Marco Di MaggioRe: Emily Williams
    • 22 Feb 2022

    When Will the Hot Housing Market Finally Start to Cool?

    Re: Nori Gerardo Lietz
    • 07 Sep 2021

    Who Pays For Wildfire and Hurricane Damage? Everyone.

    Re: Ishita Sen
→More Working Knowledge Articles

Harvard Business Publishing

    • March 2012
    • Article

    How to Make Finance Work

    By: Robin Greenwood and David S. Scharfstein
    • May 2022
    • Case

    From GOP to NFT: Anthony Scaramucci and the Launch of Flatter NFT

    By: Lauren Cohen, Richard Ryffel and Grace Headinger
    • 2017
    • Book

    HBR Guide to Buying a Small Business: Think Big, Buy Small, Own Your Own Company

    By: Richard S. Ruback and Royce Yudkoff
→More Harvard Business Publishing

Seminars & Conferences

There are no upcoming events.

→More Seminars & Conferences

Faculty Positions

Harvard Business School seeks candidates in all fields for full time positions. Candidates with outstanding records in PhD or DBA programs are encouraged to apply.
→Learn More

Contact Information

Finance Unit
Harvard Business School
Baker Library | Bloomberg Center
Soldiers Field
Boston, MA 02163
financeunit@hbs.edu

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