At Columbia Business School, our faculty members are at the forefront of research in their respective fields, offering innovative ideas that directly impact the practice of business today. A quick glance at our publication on faculty research, CBS Insights, will give you a sense of the breadth and immediacy of the insight our professors provide.
As a student at the School, this will greatly enrich your education. In Columbia classrooms, you are at the cutting-edge of industry, studying the practices that others will later adopt and teach. As any business leader will tell you, in a competitive environment, being first puts you at a distinct advantage over your peers. Learn economic development from Ray Fisman, the Lambert Family Professor of Social Enterprise and a rising star in the field, or real estate from Chris Mayer, the Paul Milstein Professor of Real Estate, a renowned expert and frequent commentator on complex housing issues. This way, when you complete your degree, you'll be set up to succeed.
Columbia Business School in conjunction with the Office of the Dean provides its faculty, PhD students, and other research staff with resources and cutting edge tools and technology to help push the boundaries of business research.
Specifically, our goal is to seamlessly help faculty set up and execute their research programs. This includes, but is not limited to:
All these activities help to facilitate and streamline faculty research, and that of the doctoral students working with them.
The article offers the authors' views on expatriate management programs and the benefits from executives interacting with the people and institutions of the host country. The idea that international experience or interaction between foreign managers and local people will help managers become more creative, entrepreneurial, and successful is discussed. The concept of integrative complexity in bi-cultural managers which enhances job performance is mentioned.
The Kidney Case is multi-person exercise that involves the allocation of a single kidney. Students read profiles of eight candidates for the kidney and make a first allocation decision. Each candidate was designed to be high on some allocation principles but low or unknown on others (e.g., best, match, time in cue, age, personal responsibility for disease, future benefits to society, etc.). Then, students are put into groups and assigned to advocate for one of the candidates. Each group will prepare and give a 3-minute presentation on why their candidate should receive the kidney.
Emissions abatement alone cannot address the consequences of global warming for weather disasters. We model how society adapts to manage disaster risks to capital stock. Optimal adaptation — a mix of firm-level efforts and public spending — varies as society learns about the adverse consequences of global warming for disaster arrivals. Taxes on capital are needed alongside those on carbon to achieve the first best.
What are the sources of the returns to education? We study the allocation of higher education graduates from public institutions in Ohio across firms. We present three results. First, we confirm findings in the earlier literature of large pay differences across degrees. Second, we show that up to one quarter of pay premiums for higher degrees are explained by between-firm pay differences. Third, higher education degrees are associated with greater representation at the best-paying firms.
This article focuses on the role of threats in negotiations. Broadly speaking, a threat is a proposition that issues demands and warns of the costs of noncompliance. Even if neither party resorts to them, potential threats shadow most negotiations. Researchers have found that people actually evaluate their counterparts more favorably when they combine promises with threats rather than extend promises alone. Whereas promises encourage exploitation, the threat of punishment motivates cooperation.
The financial crisis of 2007–2008 was the most serious since the Great Depression and severely impacted the global economy. Yet more than 10 years after the crisis, we still lack clear understanding of its cause. Accounts point to some elements of fact but tend to be fragmented and sometimes contradictory. More than ever, we need an account that can put the puzzle pieces together and help us understand how to prevent a crisis like this from happening again.
We study a fiscal policy model in which the government is present-biased towards public spending. Society chooses a fiscal rule to trade off the benefit of committing the government to not overspend against the benefit of granting it flexibility to react to privately observed shocks to the value of spending. Unlike prior work, we examine rules under limited enforcement: the government has full policy discretion and can only be incentivized to comply with a rule via the use of penalties which are joint and bounded. We show that optimal incentives must be bang-bang.
Introduction for Special Issue in Honor of Martin Weitzman.
High returns for investors. Our author argues that a different approach to ESG can strike a better balance between environmental and social goals and profits.
While no legislation is perfect, the US Inflation Reduction Act of 2022 will be a game changer for the transition to clean-energy sources, both in America and around the world. By doubling down on forward-looking industrial policy, the US is suddenly poised to give Europe, China, and others a run for their money.
Cutting carbon cuts "fossilflation" — and yes, that needs to be balanced against "greenflation." The Inflation Reduction Act tackles both, but getting the balance right will be key.
Many organizations rely on formal management control systems that align employee values with organizational values (i.e., culture-fit) to shape organizational culture. Using proprietary data from a highly-decentralized organization, I examine the employee performance consequences of adopting a formal culture-fit measurement system in employee selection. I exploit the staggered feature of the adoption of the system, and find that employees selected with the system perform significantly better than those without the system.
We revisit the firm value and pricing implications of the negative screening of sin stocks. Unlike prior work, we find that institutional ownership and valuations related to sin stocks are not different from those of other stocks after controlling for differences in fundamentals between sin and non-sin stocks. Sin stocks do not differ in the likelihood of exiting the public market, the cost of raising new equity, and in the announcement returns around negative ESG news relative to non-sin stocks, casting further doubt on whether negative screening hurts sin stocks.
Emergency Departments (EDs) typically have multiple areas where patients of different acuity levels receive treatments. In practice, different areas often operate with fixed nurse staffing levels. When there are substantial imbalances in congestion among different areas, it could be beneficial to deviate from the original assignment and reassign nurses. However, reassignments typically are only feasible at the beginning of 8-12-hour shifts, providing partial flexibility in adjusting staffing levels.
This paper recasts the consumption asset pricing model in terms of observable accounting outcomes by recognizing accounting principles that connect those outcomes to consumption and the risk to consumption. The model prompts the construction of a pricing factor from observed accounting information. The factor performs well relative to extant factors in explaining cross-sectional returns. Further, it delivers out-of-sample expected returns that forecast the actual returns and the forward betas that investors actually experience.
Performance expectations are revisited pertaining to particular corporate strategies that were highlighted by Rumelt (1974). In particular, suggestions regarding expectations about conglomerate enterprises, vertical integration, and mature- or declining-demand businesses are offered in light of additional information about research findings and observed industry phenomena that are at odds with information available when Rumelt's (1974) study of diversification was performed.
Recent evidence shows that people who grew up in economic hard times more strongly favor government redistribution and are more compassionate towards the poor. We investigate how inclusive this increase in compassion is by studying how macroeconomic conditions experienced during young adulthood affect immigration attitudes. Using US and global data, we show that experiencing bad macroeconomic circumstances strengthen anti-immigration attitudes for life. Moreover, we find that people become generally more outgroup hostile.
Asymmetric information can distort market outcomes. I study how the online disclosure of information affects consumers’ behavior and firms’ incentives to upgrade product quality in markets where information is traditionally limited. I first build a model of consumer search with firms’ endogenous quality decisions. In this model, lower search costs reallocate demand toward higher-quality producers, raising firms’ incentives to upgrade quality, and more so for firms selling ex-ante lower-quality products.
This paper focuses on teaching the application of anthropology in business to marketing students. It begins with the premise that consumer marketers have long used ethnography as a component of their qualitative market research toolkit to inform their knowledge about and empathy for consumers. A question for market research educators who include ethnography in their curricula is if and how to teach the richness of anthropologically based approaches, especially given a decoupling of ethnographic method from anthropological theory in much consumer research practice.
Diversity initiatives are designed to help workers from disadvantaged backgrounds achieve equitable opportunities and outcomes in organizations. However, these programs are often ineffective. To better understand less-than-desired outcomes and the shifting diversity landscape, we synthesize literature on how corporate affirmative action programs became diversity initiatives and current literature on their effectiveness. We focus specifically on work dealing with mechanisms that make diversity initiatives effective as well as their unintended consequences.
As financial technology improves and data becomes more abundant, do market prices reflect this growing information and allocate capital more efficiently? While a number of recent studies have documented rises in aggregate price efficiency, we show that there are large cross-sectional differences. The previously-documented increases are driven by a rise in the informativeness of large, growth stocks. The informational efficiency of smaller assets' prices or prices of assets with less growth potential are either flat or declining.
By integrating the intersectional invisibility hypothesis with the behaviors from intergroup affect and stereotypes map framework, we examine the extent to which Black women’s dual-subordinated identities render them nonprototypical victims of discrimination, relative to White women and Black men, and the corresponding consequences.
The crash of some of the flagbearers of the equity bubble in recent years has been painful for investors. We have seen “pandemic winner” Netflix dive 75 per cent from 2021 peaks, crypto exchange operator Coinbase plunge 86 per cent and the one-time meme stock and cinema chain AMC lose 80 per cent.
In a monetary union, the risk-free rate cannot respond to country-level fiscal shocks, leaving only default spreads and convenience yields to respond. Empirically, we find that convenience yields play an important role as fiscal shock absorbers in the Eurozone. Consistent with downward-sloping demand for safety, Eurozone countries earn larger convenience yields after they release positive fiscal news.
Should businesses worry about climate risk because doing so is good for their bottom line, or because their responsibilities ought to go beyond mere financial returns to shareholders? What if expanding one’s lens to include environmental, social, and corporate governance turns out to be good for business? What if not? These fundamental questions lie at the core of numerous ambitious efforts to align tools and resources of finance with global action to address climate change.
It is hard to look at a crisis like Russia’s invasion of Ukraine and see a moment of opportunity. We—to say nothing of Ukrainians—are still very much in a crisis, and a compounding one at that, with potential long-lasting economic and political consequences.
We use supervisory loan-level data to document that small firms (SMEs) obtain shorter maturity credit lines than large firms, post more collateral, have higher utilization rates, and pay higher spreads. We rationalize these facts as the equilibrium outcome of a trade-off between lender commitment and discretion. Using the COVID recession, we test the prediction that SMEs are subject to greater lender discretion. Consistent with this hypothesis, SMEs did not draw down whereas large firms did, even in response to similar demand shocks.
I study whether banks' loan loss provisioning contributes to economic downturns, by examining the U.S. housing market. Specifically, I examine the aggregate effects of banks' delayed loan loss recognition (DLR) on house prices during the Great Recession and the channels through which these potential effects arose. I construct ZIP-code-level exposure to banks' DLR before the crisis and compare high- and low-exposure ZIP codes during the crisis to examine the aggregate effects of banks' DLR on the housing market.
We examine the optimal financing of infrastructure when governments have limited financial commitment and can expropriate rents from private sector firms that manage infrastructure. While private firms need incentives to implement projects well, governments need incentives to limit expropriation. This double moral hazard limits the willingness of outside investors to fund infrastructure projects.
We consider optimal government debt maturity in a deterministic economy in which the government can issue any arbitrary debt maturity structure and in which bond prices are a function of the government's current and future primary surpluses. The government sequentially chooses policy, taking into account how current choices - which impacts future policy -- feed back into current bond prices. We show that issuing consols constitutes the unique stationary optimal debt portfolio, as it boosts government credibility to future policy and reduces the debtfinancing costs.
How does the internet affect young people's mental health? We study this question in the context of Italy using administrative data on the universe of cases of mental disorders diagnosed in Italian hospitals between 2001 and 2013, which we combine with information on the availability of high-speed internet at the municipal level. Our identification strategy exploits differences in the proximity of municipalities to the pre-existing voice telecommunication infrastructure, which was previously irrelevant but became salient after the advent of the internet.
We develop a model of information and portfolio choice in which ex ante identical investors choose to specialize because of fixed attention costs required in learning about securities. Without this friction, investors would invest in all securities and would be indifferent across a wide range of information choices. When securities' dividends depend on an aggregate (macro) risk factor and an idiosyncratic (micro) shocks, fixed attention costs lead investors to specialize in either macro or micro information.
We study three centuries of U.K. fiscal history. Before WW-I, when the U.K. dominated global bond markets, the U.K.’s government debt was not always fully backed by its future surpluses, even after accounting for the seigniorage revenue from convenience yields. As predicted by theories of safe asset determination, investors concentrate extra fiscal capacity in a single country, the global safe asset supplier, based on relative macro fundamentals, and its debt growth may temporarily outstrip what is warranted by its own macro fundamentals.
We analyze the impact of the Second Avenue Subway (Q-train) construction on local real estate prices, which capitalize the benefits of transit spillovers. We find evidence of higher real estate prices in the vicinity of areas served by the new Q-train, relative to other areas in Manhattan's Upper East Side. Only 30% of the private value created by the subway leads is captured through property taxes, and is insufficient to cover the cost of the subway. Value capture through targeted property tax increases can help close the funding gap.
Higher U.S. government debt/output ratios do not forecast higher future surpluses or lower real returns on Treasurys. Neither future cash flows nor discount rates account for the variation in the current debt/output ratio. The market valuation of Treasurys is surprisingly insensitive to the macro fundamentals. Instead, the future debt/output ratio accounts for most of the variation. Systematic surplus forecast errors may help to account for these findings. Since the start of the GFC, surplus projections have anticipated a large fiscal correction that failed to materialize.
As unfunded pension liabilities grow, governments experiment with ways to curb costs. We examine the effect of a representative cost-cutting reform on the retention and productivity of workers. The reform reduced pension annuities and increased penalties for early retirement, projected to save 8 percent of revenues. We leverage administrative records and a discontinuity in the reform to estimate its effect on labor supply. The reform slightly increased worker retention, and we can rule out small attrition effects. The reform had no effect on worker output.
Background
Equitable protocols to triage life-saving resources must be specified prior to shortages in order to promote transparency, trust and consistency. How well proposed utilitarian protocols perform to maximize lives saved is unknown. We aimed to estimate the survival rates that would be associated with implementation of the New York State 2015 guidelines for ventilator triage, and to compare them to a first-come-first-served triage method.
Methods
It will take an evolution of fixed-income managers’ approach to make a difference to corporate behaviour.
Not to be left out of the ESG gold rush, a growing number of bond firms now offer environmental, social and governance funds. ESG integration has become a standard box to be checked (or not) on bond clients’ Requests for Proposals. Investment banks have created tools to help fixed income managers ESG-ify their portfolios.
The covid-19 crisis has led to a sharp deterioration in firm and bank balance sheets. The government has responded with a massive intervention in corporate credit markets. We study equilibrium dynamics of macroeconomic quantities and prices, and how they are affected by government intervention in the corporate debt markets. We find that the interventions should be highly effective at preventing a much deeper crisis by reducing corporate bankruptcies by about half, and short-circuiting the doom loop between corporate and financial sector fragility.
An important challenge for many firms is to identify the life transitions of its customers, such as job searching, expecting a child, or purchasing a home. Inferring such transitions, which are generally unobserved to the firm, can offer the firms opportunities to be more relevant to their customers. In this paper, we demonstrate how a social network platform can leverage its longitudinal user data to identify which of its users are likely to be job seekers. Identifying job seekers is at the heart of the business model of professional social network platforms.
The COVID-19 pandemic has caused great disruption to the service sector, and it has, in turn, adapted by implementing measures that reduce physical contact among employees and users; examples include home-office work and the setting of occupancy restrictions at indoor locations.
Climate change brought on by human activities lead to acute and chronic hazards that threaten the planet; to reduce the chances of the most dangerous and irreversible damage, the global community must reduce the emission of greenhouse gases, notably carbon dioxide. While more than 70 countries (~80% of global CO2 emissions and ~90% of global GDP) and over 5,000 influential companies have adopted net-zero commitments, coordination of an effort to this scale, given the complex economic, societal, governance and infrastructure considerations, is no easy feat.