Finance Online Seminar（2020-04)

Topic: Common Ownership, Competition, and Top Management Incentives

Speaker: Martin C. Schmalz, University of Oxford

Time: Wednesday, 1 April, 16:00-17:30 Beijing Time

Location: Microsoft Teams Online conference room

Abstract:

When one firm’s strategy affects other firms’ value, optimal executive incentives depend on whether shareholders have interests in only one or in multiple firms. Performance-sensitive contracts induce managerial effort to reduce costs, and lower costs induce higher output. Hence, greater managerial effort can lead to lower product prices and industry profits. Therefore, steep managerial incentives can be optimal for a single firm and at the same time violate the interests of common owners of several firms in the same industry. Empirically, managerial wealth is more sensitive to performance when a firm’s largest shareholders do not own large stakes in competitors.

Introduction:

Martin is a tenured Associate Professor of Finance at Oxford Sa?d. He is also a Research Affiliate with the Centre for Economic Policy Research (London) and CESIfo (Münich), and a Research Member with the European Corporate Governance Institute (Brussels). Martin previously served as the NBD Bancorp Assistant Professor in Business Administration, Harry H. Jones Research Scholar, and as an Assistant Professor of Finance at the University of Michigan’s Stephen M. Ross School of Business and a Faculty Affiliate of the Center on Finance, Law,and Policy at the University of Michigan.

He has taught PhD courses in corporate financial theory, the finance core for BBA and EMBA, and won a Teaching Excellence Award for his case-based 'Valuation' elective in Michigan’s daytime MBA curriculum. He now teaches an elective for Oxford’s MBAs, MFEs, and MLFs on Big Data and Machine Learning in Finance. He holds a graduate degree (Dipl-Ing) in mechanical engineering from the Universit?t Stuttgart (Germany) and a MA and PhD in Economics from Princeton University (USA).

Martin has published papers on entrepreneurship, corporate finance and governance, behavioural finance and asset pricing and various studies of the asset management industry. His research on how the ownership structure of firms affects firm behaviour and market outcomes has affected policy-making and antitrust enforcement worldwide.

His research has been published in The Journal of Finance, Journal of Financial Economics, and Review of Financial Studies and has won various awards, including a Brattle Group Distinguished Paper Prize for one of the best papers published in The Journal of Finance in 2017. It has been covered, among others, by The New York Times, The Economist, Wall Street Journal, Financial Times, Bloomberg, The New Yorker, The Atlantic, Forbes, Fortune, Frankfurter Allgemeine Zeitung. He was invited to present to regulators and policy makers across the globe, including the US Department of Justice, The White House Council of Economic Advisers, European Commission, European Parliament, OECD, various central banks, and at universities across America, Europe, Asia, and Australia.

In 2019 Martin received a Jerry S. Cohen Memorial Fund Writing Award for his paper 'Anticompetitive effects of common ownership'.

https://www.sbs.ox.ac.uk/about-us/people/martin-schmalz

Your participation is warmly welcomed!