How financial decisions are made

Sep 02, 2014 by Joe O'connell
Jayant Kale, the new Philip R. McDonald Chair and a professor of finance in the D’Amore-McKim School of Business, studies the many factors that contribute to the financial decisions businesses make. Photo by Brooks Canaday.

Jayant Kale didn't grow up dreaming of becoming a leading expert in corporate finance and mutual fund investment. But he's happy he invested in that market early in life.

While studying for his doctorate in at the University of Texas at Austin, Kale took some courses and discovered a fascination with how firms make .

"I started understanding the underlying economics of these financial decisions," said Kale, who pivoted toward finance for his doctoral work. "I was intrigued by how decisions are made when different people have different information. All of it is studied in a rational way because you must look at it within very specific axioms."

Now, Kale has brought his financial expertise to Northeastern, where he is the new Philip R. McDonald Chair and a professor of finance in the D'Amore-McKim School of Business. This semester, he is teaching an undergraduate course in international finance.

Kale's research focuses on both and institutional investment. Over the past eight years, Kale has studied how supply chains factor into the financial decisions made by firms and businesses. His work has been published in publications such as the Journal of Financial Economics and the Journal of Financial and Quantitative Analysis. In his research, he's found that firms are paying more attention to the credit worthiness of suppliers and the safety of their supply chains.

"I'm trying to bring in nonfinancial people's interests into the decisions," Kale explained. "In recent years, this consideration of supply chains has become more important. If I am manufacturing something, my supplier is very crucial to my survival."

At Northeastern, Kale also plans to continue a new research project focusing on how managers' personal traits affect corporate financial decisions—an area for which there isn't much data, he said.

Kale comes to Northeastern from Georgia State University's J. Mack Robinson College of Business, where he was the H. Talmage Dobbs, Jr. Chair and a professor of finance. He also previously taught at the Indian Institute of Management Bangalore, the Indian School of Business, and Nanyang Technological University in Singapore.

In the D'Amore-McKim School of Business, Kale will be reunited with his former doctoral students and current Northeastern faculty members Anand Venkateswaran and Linlin Ma.

"I knew I would be professionally and personally happy here," Kale said of coming to Northeastern. "It is clearly a school that is on the rise. There are interesting plans for where the school is going and that is something I think I can contribute to in some way."

Explore further: Business groups, capital market participation have complementary effects for Indian companies

add to favorites email to friend print save as pdf

Related Stories

It all hinges on the bottom line

Mar 22, 2013

Determining the financial health of a company is no easy task. But new research from Concordia University's John Molson School of Business, recently published in the Journal of Corporate Finance, demonstrates that a comp ...

Much of rural India still waits for electricity

Nov 04, 2013

Americans turn on lights, plug in coffeemakers, and charge cellphones without a thought to the electricity required. But in parts of India, many households still lack electrical power, despite the nation's ...

Recommended for you

Cash remains king in Chile but its days could be numbered

22 hours ago

For more than a year now, Chileans have endured a crisis of cash access. Despite global moves toward new forms of payment such as contactless and mobile transfers, the crisis in Chile highlights the continuing ...

Will you ever pay off your student loan?

Mar 25, 2015

Would-be participants of higher education must be given full and transparent advice before they accumulate debts as students that follow them into the workplace, according to a report published in the International Journal of ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.