Martin C. Schmalz

Professor of Finance and Economics, Saïd Business School, University of Oxford, United Kingdom

Head of the Finance, Accounting, Management & Economics Area

Director: Future of Real Estate Initiative

Co-Director: AI in Fintech and Open Banking Programme

Academic Director: Blockchain Strategy Programme

  • I am a financial economist, studying how finance interacts with various other sub-fields of economics, including industrial organization, behavioral, and monetary economics.

  • I teach several courses on Machine Learning and Artificial Intelligence that are accessible to business, law and executive students, and co-authored the book "The Business of Big Data."

  • I consult with UHNWI and family offices on asset allocation and succession planning.


PhD, Economics, Princeton University, USA (2012)

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

Working Papers

Common Ownership, Firm Behavior, and Market Outcomes

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. [On the NBER SI CF program]

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]

Behavioral Finance and Asset Pricing

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.

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.

Corporate Finance and Security Design

Pooling and Tranching under Belief Disagreement (with Juan Ortner) shows how pooling and tranching interact. [Slides]

Financing Payouts (with Joan Farre-Mensa and Roni Michaely) documents that a large fraction of dividends and repurchases are financed with simultaneous securities issuances.

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)

  1. Anxiety in the Face of Risk, with Thomas Eisenbach, Journal of Financial Economics, 121(2), 2016, pp. 414-426.

    • Describes the behavior of an agent that is more risk-averse for imminent than for distant risks.

  2. Can Changes in the Cost of Carry Explain the Dynamics of Corporate Cash Holdings? (w/ Azar & J-F Kagy), Review of Financial Studies, 29(8), 2016, pp. 2194-2240.

    • Explores whether monetary conditions can explain corporate liquid asset holdings in the U.S. and abroad.

  3. Housing Collateral and Entrepreneurship, with David Sraer & David Thesmar, Journal of Finance, 72(1), 2017, pp. 99-132. {Brattle Group Distinguished Paper Prize}

    • Shows that collateral constraints restrict entrepreneurial activity.

  4. Fund Flows and Market States, with Francesco Franzoni, Review of Financial Studies, 30(8), 2017, pp. 2621-2673.

    • Bayesian investors reallocate more capital to outperforming mutual funds when the market moves sideways, compared to times with more extreme factor realizations.

  5. Anticompetitive Effects of Common Ownership, with José Azar and Isabel Tecu, Journal of Finance, 73(4), 2018, pp. 1513-1565. Internet Appendix. Replication Package.

  6. Revealing Downturns, with Sergey Zhuk, Review of Financial Studies, 32(1), 2019, pp. 338-373.

    • Bayesian learning about asset's risk loadings implies negatively skewed stock returns and conditional volatility.

  7. (Why) Do Central Banks Care About Their Profits? with Igor Goncharov and Vasso Ioannidou, Journal of Finance, forthcoming.

    • Shows that central banks care about their profitability, especially when political pressure or career concerns are more pronounced.

  8. Common Ownership, Competition, and Top Management Incentives with Miguel Antón, Florian Ederer, and Mireia Giné, Journal of Political Economy, forthcoming.

    • Shows that managers in more commonly owned industries have reduced incentives to maximize their own firms' value.

Book Chapters and Chapters in Edited Volumes (selection)

  1. Payout Policy, with Joan Farre-Mensa & Roni Michaely, reviews the literature on corporate payouts. [In: Robert Jarrow (Ed.), Annual Review of Financial Economics, Vol. 6, 2014]

  2. Common-Ownership Concentration and Corporate Conduct reviews the literature on common ownership concentration, firm behavior, and equilibrium outcomes. [In: Patrick Bolton (Ed.), Annual Review of Financial Economics, Vol. 10, 2018]

  3. Recent Studies on Common Ownership, Firm Behavior, and Market Outcomes reviews the fast-growing literature since 2018. Antitrust Bulletin 66 (1), 2021.

  4. Research on the Competitive Consequences of Common Ownership: A Methodological Critique, with José Azar & Isabel Tecu, offers a critical assessment of methods used to estimate causal effects of common ownership in the recent literature. Antitrust Bulletin 66 (1), 2021.

  5. Conceptual Breakthroughs on Common Ownership and Competition: A Framework For Evaluating Policy, describes conceptual breakthroughs and evaluates existing policy proposals within a new framework. Cambridge University Press, Corradi & Nowag (Eds), forthcoming.

  6. Delegated Philantropy in Mutual Fund Votes on Climate Change, with Marie Brière, Sébastien Pouget, and Loredana Ureche-Rangau, documents that mutual fund families with a greater fraction of ``socially responsible'' funds are more supportive of ESG proposals. ITSE/Wiley, Jurczenko (Ed.), forthcoming.