Martin C. Schmalz 

Professor of Finance and Economics

Saïd Business School, University of Oxford, United Kingdom

On public service leave as Chief Economist and Director, Office of Economic and Risk Analysis
Public Company Accounting Oversight Board

Director: Future of Real Estate Initiative

Co-Director: AI in Fintech and Open Banking  Program 

Academic Director: Blockchain Strategy Program


PhD, Economics, Princeton University, USA (2012)

Dipl.-Ing., Mechanical Engineering, Universität Stuttgart, Germany (2003-2007)

Working Papers

Common Ownership, Firm Behavior, and Market Outcomes

Do Corporations Maximize Their Own Value?" (with Jin Xie) shows that firms will take value-destroying decisions when doing so benefits their largest shareholders due to these shareholders' holdings in rival firms.

A Refutation of ``Common Ownership Does Not Have Anti-Competitive Effects in the Airline Industry"  (with José Azar and Isabel Tecu) shows that the main empirical claim in DGS is factually incorrect. Correctly accounting for the endogeneity of market shares shows the original "airlines paper" understimated the panel correlation between common ownership and product prices.

Mavericks, Universal, and Common Owners - The Largest Shareholders of US Public Firms (with Amir Amel-Zadeh and Fiona Kasperk) shows that accounting for blockholders' and insiders' holdings is necessary to reach the qualitatively correct conclusions about the drivers and consequences of common ownership in America.

Innovation: The Bright Side of Common Ownership? (with Miguel Antón, Florian Ederer, and Mireia Giné) shows that common ownership increases innovation when technological spillovers are strong relative to product market spillovers. [R&R, Management Science]

Diversification vs. Monopolization: A Laboratory Experiment (with Jonas Frey and Axel Ockenfels) shows experimental "shareholders" adjust manager compensation in accordance with their endogenously chosen portfolios, with the result of lessening competition.

Asset Pricing

Index Funds, Asset Prices, and the Welfare of Investors (with William Zame) shows that, in equilibrium, investor welfare may decrease when index funds become more cheaply available.

Horizon-dependent Risk Aversion and the Timing and Pricing of Uncertainty (with Marianne Andries and Thomas Eisenbach) reconciles long-run risk models with a downward-sloping term structure of risk prices without requiring a preference for the early or late resolution of uncertainty. [Fall 2014 NBER AP] [R&R, Review of Financial Studies]

The Term Structure of the Price of Variance Risk (with Marianne Andries, Thomas Eisenbach, and Yichuan Wang) finds that the price of variance risk decreases with maturity, and thus helps distinguish between alternative asset pricing models.

Behavioral Finance

Anxiety and Pro-Cyclical Risk Taking with Bayesian Agents (with Thomas Eisenbach) provides an explanation why some people sometimes become overconfident and take excessive risks.

Corporate Finance and Security Design

Pooling and Tranching under Belief Disagreement (with Juan Ortner) shows how pooling and tranching interact. [Reject & resubmit, Review of Finance]

Unionization, Cash, and Leverage uses a regression discontinuity design on unionization elections to identify the causal effect of unionization on firms' financial policies.

Peer-Reviewed Publications (selection)

Book Chapters and Chapters in Edited Volumes (selection)