Steam efficiency is a major opportunity for manufacturers to boost financial performance in an increasingly competitive environment. An immediate policy challenge is to raise manufacturers’ awareness of these opportunities. A major barrier to accomplishing this is the communications disconnect between plant superintendents and the financial decision-makers who set capital budgeting priorities. ...

This paper proposes a model for the estimation of time series returns of illiquid asset portfolios. The model has four major advantages. First, the estimators are arithmetic averages of individual asset returns (or their proxies), so they strictly correspond to the portfolio returns. Second, the model is able to estimate returns of arbitrary-weighted portfolios, including equalweighted, price-w...

This paper examines changes in the industry-adjusted financial performance of 48 sample firms that laid off five percent or more employees between 1985 and 1990. Our findings indicate that the firms show significant improvements in operating cash flows and cost efficiency despite poor sales performance following layoffs. There is also evidence that the firms’ asset size increases after the layo...

We present a general equilibrium model of intermediation designed to capture some of the key features of the modern financial system. The model incorporates financial constraints and state-contingent contracts, and captures the spillovers associated with asset fire sales during periods of stress. If a sufficiently severe shock occurs during a credit expansion, these spillovers can potentially g...

We consider the finite-time optimal basket liquidation problem for a von Neumann-Morgenstern investor with constant absolute risk aversion (CARA). As underlying continuous-time liquidity model, we use a multi-asset extension of the nonlinear price impact model of Almgren (2003). We show that the expected utility of sales revenues, taken over a large class of adapted strategies, is maximized by ...

Tightening financial regulation squeezes banking activities into the shadow banking sector, which may hurt financial stability and production (Plantin, 2014). Unlike Plantin’s work, we investigate regulations that reduce banks’ leverage and dampen financial amplification effects. Moreover, our paper studies the trade-off between economic growth and financial stability in light of shadow banking...

This paper examines the financial benefits of IT outsourcing of 335 firms between the years 1990 and 2003. We find IT outsourcing to affect both ex ante (announcement day stock market returns) and ex post measures of firm performance (return on sales, return on assets, growth rate, selling, general, and administrative expenses and market valuation). Using a transaction cost economics frame, we ...

We consider a model where investors can invest directly or search for an asset manager, information about assets is costly, and managers charge an endogenous fee. In equilibrium, the efficiency of asset prices is linked to the efficiency of the asset management market: (1) if investors can find managers more easily then more money is allocated to active management, fees are lower, and asset pri...

Henry Bros. Electronics (HBE) has been deploying a wide variety of open source systems over the last two years. These systems touch every aspect of the business including sales lead tracking, time reporting, and asset management. Open source systems are also used for the company’s internal portal and a client-facing reporting engine. Some of the company’s file servers are deployed using open so...

I test the hypothesis that the use of leverage by market speculators can increase the likelihood and magnitude of a crash in asset prices. Using a novel leverage measure derived from public filings, I find that stocks held by highly levered hedge funds subsequently have more negatively skewed returns than stocks held by less levered funds. This finding extends to the aggregate U.S. market index...