Finance

- 2021
- Working Paper
Studying the U.S.-Based Portfolio Companies of U.S. Impact Investors

By: M. Diane Burton, Gurveen Chadha, Shawn A. Cole, Abhishek Dev, Christina Jarymowycz, Leslie Jeng, Laura Kelley, Josh Lerner, Jaime R. Diaz Palacios, Yue (Cynthia) Xu and T. Robert Zochowski

Recent years have seen a dramatic increase in the reliance on market-based solutions to social and environmental problems around the world (Barman 2016; Horvath and Powell 2020). The growth of impact investing is a vivid example of this trend and, although there have been efforts to understand the strategies and returns of impact investors (Gray et al. 2015; Kovner and Lerner 2015; Barber et al. 2021; Burton et al. 2021; Geczy et al. 2021), less attention has been given to systematically analyzing the companies that they fund. One important constraint has been data availability, as standard data sources do not typically identify impact portfolio companies (“IPCs”), or companies funded by impact investors. Even when identified, standard data sources contain only limited information on these companies, which are oftentimes privately held. Our research agenda aims to fill this gap by facilitating the study of IPCs through a multi-dimensional approach. We draw upon an expansive database of 14,165 IPCs, compiled by the Project on Impact Investments (“Pii”) at Harvard Business School (“HBS”) (Burton et al. 2021). For the in-depth data collection effort on IPCs described in this paper, we screen this database for the 4,371 U.S.-based portfolio companies of 146 U.S.-based impact investors and 4 impact funds of private equity investors that have invested in at least one U.S. headquartered IPC. We then gather detailed information found in publicly filed documents for a carefully selected sample of 270 IPCs of which we interview 82. This paper describes our sampling methodology and research process. Ultimately, we hope our research will fill gaps in understanding whether and how IPCs achieve social and financial returns.
- 2021
- Working Paper
Studying the U.S.-Based Portfolio Companies of U.S. Impact Investors

By: M. Diane Burton, Gurveen Chadha, Shawn A. Cole, Abhishek Dev, Christina Jarymowycz, Leslie Jeng, Laura Kelley, Josh Lerner, Jaime R. Diaz Palacios, Yue (Cynthia) Xu and T. Robert Zochowski

Recent years have seen a dramatic increase in the reliance on market-based solutions to social and environmental problems around the world (Barman 2016; Horvath and Powell 2020). The growth of impact investing is a vivid example of this trend and, although there have been efforts to understand the strategies and returns of impact investors (Gray...
- 2021
- Working Paper
Who Closed the Schools?

By: Joshua D. Coval

This paper examines the differences in characteristics between U.S. public schools that opted for virtual instruction because of COVID-19, and schools that did not. Much of the variation can be explained by measures of the degree to which districts favored teachers over students before the pandemic: Districts that chose virtual instruction exhibited a far greater willingness to prioritize teacher interests over those of students and the interests of teachers with seniority over younger and/or higher-performing teachers. We provide evidence that this prioritization is associated with significant costs in terms of student test results and graduation rates.
- 2021
- Working Paper
Who Closed the Schools?

By: Joshua D. Coval

This paper examines the differences in characteristics between U.S. public schools that opted for virtual instruction because of COVID-19, and schools that did not. Much of the variation can be explained by measures of the degree to which districts favored teachers over students before the pandemic: Districts that chose virtual instruction...
- 2021
- Working Paper
Bank Balance Sheet Constraints and Bond Liquidity

By: Johannes Breckenfelder and Victoria Ivashina
- 2021
- Working Paper
Bank Balance Sheet Constraints and Bond Liquidity

By: Johannes Breckenfelder and Victoria Ivashina

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

Studying the U.S.-Based Portfolio Companies of U.S. Impact Investors

By: M. Diane Burton, Gurveen Chadha, Shawn A. Cole, Abhishek Dev, Christina Jarymowycz, Leslie Jeng, Laura Kelley, Josh Lerner, Jaime R. Diaz Palacios, Yue (Cynthia) Xu and T. Robert Zochowski

2021 |
Working Paper |
Faculty Research

Recent years have seen a dramatic increase in the reliance on market-based solutions to social and environmental problems around the world (Barman 2016; Horvath and Powell 2020). The growth of impact investing is a vivid example of this trend and, although there have been efforts to understand the strategies and returns of impact investors (Gray et al. 2015; Kovner and Lerner 2015; Barber et al. 2021; Burton et al. 2021; Geczy et al. 2021), less attention has been given to systematically analyzing the companies that they fund. One important constraint has been data availability, as standard data sources do not typically identify impact portfolio companies (“IPCs”), or companies funded by impact investors. Even when identified, standard data sources contain only limited information on these companies, which are oftentimes privately held. Our research agenda aims to fill this gap by facilitating the study of IPCs through a multi-dimensional approach. We draw upon an expansive database of 14,165 IPCs, compiled by the Project on Impact Investments (“Pii”) at Harvard Business School (“HBS”) (Burton et al. 2021). For the in-depth data collection effort on IPCs described in this paper, we screen this database for the 4,371 U.S.-based portfolio companies of 146 U.S.-based impact investors and 4 impact funds of private equity investors that have invested in at least one U.S. headquartered IPC. We then gather detailed information found in publicly filed documents for a carefully selected sample of 270 IPCs of which we interview 82. This paper describes our sampling methodology and research process. Ultimately, we hope our research will fill gaps in understanding whether and how IPCs achieve social and financial returns.

Citation

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Who Closed the Schools?

By: Joshua D. Coval

2021 |
Working Paper |
Faculty Research

This paper examines the differences in characteristics between U.S. public schools that opted for virtual instruction because of COVID-19, and schools that did not. Much of the variation can be explained by measures of the degree to which districts favored teachers over students before the pandemic: Districts that chose virtual instruction exhibited a far greater willingness to prioritize teacher interests over those of students and the interests of teachers with seniority over younger and/or higher-performing teachers. We provide evidence that this prioritization is associated with significant costs in terms of student test results and graduation rates.

Citation

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Bank Balance Sheet Constraints and Bond Liquidity

By: Johannes Breckenfelder and Victoria Ivashina

2021 |
Working Paper |
Faculty Research

Citation

Everything Old is New Again - SPACs

By: Nori Gerardo Lietz and Philipp Chvanov

May 2021 |
Technical Note |
Faculty Research

Citation

Educators

André Hoffmann: Beyond Philanthropy

By: Lauren Cohen, Hao Gao, Jiawei Ye and Spencer C.N. Hagist

May 2021 |
Case |
Faculty Research

André Hoffmann is a leader of one of the world's largest pharmaceutical companies. His exceptional tenure in philanthropy over the past several decades, including being president of the WWF and the vice-president of the MAVA Foundation, has allowed him access to a far broader scope of the field than most philanthropists can have in a lifetime. Through these experiences, he has indicated a set of key factors that cause philanthropy and social impact efforts to fail, both consistently and silently, and that threaten the future of the planet in the wake of such time-sensitive global issues as climate change, resource overuse, and ecological destruction. His plan to fix the system involved a fundamental restructuring of not only philanthropy, but of the broader business landscape itself, including a dramatic reframing of how we understand cash flows and profits across industries. The measures cannot come from one body alone, and will require immense cooperation of enterprises if the world is meant to ever stand a chance.

Keywords: Strategy; Switzerland; United States; Japan

Citation

Educators

Getting Schooled: The Role of Universities in Attracting Immigrant Entrepreneurs

By: Natee Amornsiripanitch, Paul A. Gompers, George Hu and Kaushik Vasudevan

2021 |
Working Paper |
Faculty Research

Immigrant founders of venture capital-backed companies have been critical to the entrepreneurial ecosystem. We document the channels through which immigrant founders find their way to the United States and how those channels have changed over time. Immigrants have been an important source of founders for venture capital-backed startups accounting for roughly 20% of all founders over the past 30 years. Immigrants coming to the United States for their education have been the primary source of founders with those coming after being educated abroad and then arriving for work decreasing in importance over time. The importance of undergraduate education as a channel for immigrant founders has increased over time. Immigrant founders coming for education are likely to start their companies in the state in which they were educated, especially states where they received their graduate education, leading to potentially large local economic benefits. The results of this paper have important policy implications for the supply of entrepreneurial talent and efforts to promote entrepreneurial ecosystems.

Keywords: Immigrants; Entrepreneurial Ecosystem; Higher Education; Immigration; Entrepreneurship

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Case Study: What Role Should a Company Play in a National Crisis?

By: Christopher J. Malloy

May–June 2021 |
Article |
Harvard Business Review

The article presents a fictionalized case study asking what type of role should a company play in a national crisis, specifically a tsunami hitting Indonesia, similar to the 2004 Indian Ocean tsunami. Topics include how disasters can impact family-owned companies, the need for appointing rapid-response teams before disasters happen, and evaluating the use of disaster relief funds.

Keywords: Emergency Preparedness; Disaster Relief; Natural Disasters; Crisis Management

Citation

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