Mitchell A. Petersen
Mitchell A. Petersen

FINANCE
Glen Vasel Professor of Finance
Director of the Heizer Center for Private Equity and Venture Capital

Print Overview
Mitchell Petersen is the Glen Vasel Professor of Finance. He has published widely in finance and economics. Professor Petersen's research is in the area of empirical corporate finance-the questions of how firms evaluate potential investment projects and how they fund such projects. His recent writing focuses on the funding of small firms and how such funding has been altered by technology and changes in the financial (banking) market. He was awarded the Smith-Breeden Prize for Outstanding Paper in the Journal of Finance in 1995 (for his paper "The Benefits of Lending Relationships: Evidence from Small Business Data") and the Michael Brennan Award for Best Paper in the Review of Financial Studies in 1998 (for his paper "Trade Credit: Theories and Evidence"). He was runner-up for the Brennan Award in 2008 (for his paper “Does the Source of Capital Affect Capital Structure”) and 2010 (for his paper “Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches”).

He has been a member of the editorial board of various journals, including the Journal of Finance, Financial Management, Review of Financial Studies and the Journal of Financial Intermediation. He is also a research associate with the National Bureau of Economic Research (NBER) and is a member of the Moody's Academic Advisory and Research Committee and served on the Board of Directors of L.R. Nelson.

Professor Petersen was awarded the Sidney J. Levy Teaching Award in 1996, 1999, 2001, 2003, 2006, 2008, and 2010 and was voted the Kellogg Professor of the Year in 2000, the Executive MBA Outstanding Professor in 2008, 2010, and 2011, and Kellogg Alumni Professor of the Year in 2010. He received his Ph.D. in Economics from the Massachusetts Institute of Technology. Prior to joining Kellogg Professor Petersen taught at the University of Chicago.



Areas of Expertise
Banking and Financial Institutions
Corporate Finance
Corporate Bankruptcy
Corporate Capital Structure
Debt-Equity Choice
Entrepreneurship
Payout Policy (Dividends, Repurchases)
Pension Funds
Real Options (Investments)
Risk Management
Small Business Management
Taxation
Print Vita
Education
PhD, 1990, Economics, Massachusetts Institute of Technology
AB, 1986, Economics, Princeton University, Summa Cum Laude, Phi Beta Kappa

Academic Positions
Director of Heizer Center for Private Equity and Venture Capital , Kellogg School of Management, Northwestern University, 2007-present
Glen E. Vasel Professor of Finance, Kellogg School of Management, Northwestern University, 2005-present
Glen E. Vasel Associate Professor of Finance, Kellogg School of Management, Northwestern University, 1997-2005
Assistant Professor of Finance, Kellogg School of Management, Northwestern University, 1994-1997
Assistant Professor of Finance, Graduate School of Business, University of Chicago, 1990-1994

Grants and Awards
Executive MBA Program Outstanding Teaching Awards, Kellogg School of Management, 2011, 2010, 2008
(EMP84 (Core) 2011, EMP80 (Core) 2010, EMP79 (Core) 2010, EMP70 (Core) 2008)
Outstanding Professor Award (EMP 84), Kellogg School of Management, 2011
Sidney J. Levy Teaching Award, Kellogg School of Management, 2009-2010, 2007-2008, 2005-2006, 2003-2004, 2000-2001, 1998-1999, 1995-1996
Kellogg Alumni Professor of the Year Award, Kellogg School of Managment, 2010
L.G. Lavengood Outstanding Professor of the Year Award, Kellogg School of Management, 2000
Editor's Choice Award, Review of Financial Studies, 2010
Michael Brennan Award (runner-up), Barclays Global Investors, 2010
Outstanding Professor Award (EMP 80), Kellogg School of Management, 2010
Outstanding Professor Award (EMP 79), Kellogg School of Management, 2010

Editorial Positions
Associate Editor, Journal of Finance, 2004-Present
Associate Editor, Financial Management, 2002-2009
Editor, Journal of Financial Management, 1998-2002
Associate Editor, Journal of Finanicial Intermediation, 1995-1997
Associate Editor, Review of Financial Studies, 1995-1997

 
Print Research
Research Interests
Empirical corporate finance (how firms, especially small firms, are financed and, risk management, and the role of debt markets in funding investments)

Articles
Petersen, Mitchell A. and Michael Faulkender. 2012. Investment and Capital Constraints: Repatriations Under the American Jobs Creation Act. Review of Financial Studies. 25(11): 3351-3388.
AbstractLink
Petersen, Mitchell A.. 2009. Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches. Review of Financial Studies. 22: 435-480.
AbstractLink
Faulkender, Michael and Mitchell A. Petersen. 2006. Does the Source of Capital Affect Capital Structure?. Review of Financial Studies. 19(1): 45-79.
AbstractLink
Berger, Allen, Nathan Miller, Mitchell A. Petersen, Raghuram G. Rajan and Jeremy Stein. 2005. Does Function Follow Organizational Form? Evidence From the Lending Practices of Large and Small Banks. Journal of Financial Economics. 76(2): 237-269.
AbstractLink
Petersen, Mitchell A.. 2004. Discussion of "Do Community Banks Benefit from Diversification" by Kevin Stiroh. Journal of Financial Services Research. 25(2-3): 161-167.
Link
Petersen, Mitchell A. and Raghuram G. Rajan. 2002. Does Distance Still Matter? The Information Revolution in Small Business Lending. Journal of Finance. 57(6): 2533-2570.
AbstractLink
Petersen, Mitchell A. and S. Ramu Thiagarajan. 2000. Risk Measurement and Hedging: With and Without Derivatives. Financial Management. 29(4): 5-29.
AbstractLink
Petersen, Mitchell A.. 1999. Banks and the Role of Lending Relationships: Evidence from the U.S. Experience. Rassegna Economica. 63(1): 37-62.
AbstractLink
Petersen, Mitchell A.. 1999. Comment on Jayaratne and Wolken. Journal of Banking and Finance. 23(2-4): 459-462.
AbstractLink
Petersen, Mitchell A. and Raghuram G. Rajan. 1997. Trade Credit: Theories and Evidence. Review of Financial Studies. 10(3): 661-691.
AbstractLink
Petersen, Mitchell A. and Raghuram G. Rajan. 1995. The Effect of Credit Market Competition on Lending Relationships. Quarterly Journal of Economics. 110(2): 407-443.
Abstract
Fialkowski, David and Mitchell A. Petersen. 1994. Posted versus Effective Spreads: Good Prices or Bad Quotes?. Journal of Financial Economics. 35(3): 269-292.
AbstractLink
Petersen, Mitchell A.. 1994. Cash flow Variability and Firm's Pension Choice: A Role for Operating Leverage. Journal of Financial Economics. 36(3): 361-383.
AbstractLink
Petersen, Mitchell A. and Raghuram G. Rajan. 1994. The Benefits of Lending Relationships: Evidence from Small Business Data. Journal of Finance. 49(1): 3-37.
AbstractLink
Petersen, Mitchell A.. 1992. Pension Reversions and Worker-Stockholder Wealth Transfers. Quarterly Journal of Economics. 107(3): 1033-1056.
Abstract
Working Papers
Petersen, Mitchell A. and Justin Murfin. 2012. Loans on sale: Credit market seasonality, borrower need, and lender rent seeking.
AbstractLink
Petersen, Mitchell A.. 2004. Information: Hard and Soft.
AbstractLink
Heath, Chip and Mitchell A. Petersen. 1996. Premature De-escalation of Commitment in Response to Failed Investment: A Test of Theories of Escalating Commitment, Marginal Decision-Making, and Mental Budgeting.
AbstractLink
Petersen, Mitchell A. and Steve Umlauf. 1993. Quote Revisions and The Quoted Size: An Empirical Analysis.
AbstractLink
Book Chapters
Petersen, Mitchell A.. 1996. "Do 401(k) Plans Replace Other Employer-Provided Pensions?." In Advances in the Economics of Aging, edited by David A. Wise, 219-240. Chicago, IL: University of Chicago Press.
Abstract
Petersen, Mitchell A.. 1996. "Allocating Assets and Discounting Cash Flows: Pension Plan Finance." In Pensions, Savings, and Capital Markets, edited by Phyllis Hernandez, John Turner, Richard Hinz, Washington, DC: US Department of Labor.
AbstractLink
Cases
Petersen, Mitchell A., Rajiv Chopra and Alex Williamson. 2013. Grupo Pão de Açúcar: Strategic Use of Trade Credit. Case 5-312-508.
Abstract
Petersen, Mitchell A. and Rashmi Singhal. 2007. Vioxx: Too Risky for Merck?. Case 5-207-253 (KEL289).
AbstractLink
Petersen, Mitchell A.. 2004. Western-Southern Enterprise. Case 5-104-019 (KEL075).
AbstractLink
Petersen, Mitchell A. and Robert O'Keef. 2004. West Teleservices. Case 5-104-020 (KEL074).
AbstractLink

 
Print Teaching
Teaching Interests
Corporate finance (valuation, capital structure, and dividend policy), tax strategy, real options
Full-Time / Part-Time MBA
Finance II (FINC-441-0)

This course counts toward the following majors: Analytical Finance, Finance.

This course is the sequel to FINC-430. The primary objective is to examine the financial decisions of firms with regard to their capital budgeting decisions (which investments to make), dividend decisions and capital structure decisions (how to raise capital). We first examine these decisions in an idealized frictionless world in which the firm cannot change its value by altering its dividend or capital structure policy. We then explore the effect of frictions (e.g. taxes, bankruptcy costs, inefficient or uncompetitive financial markets, or self-interested managers) on the firm's financial decisions and how these decisions can affect a firm's value. Prerequisites: FINC-430. Corequisite: DECS-434 or equivalent. ACCT-430 and MECN-430 are recommended.

Financial Strategy and Tax Planning (FINC-447-0)

This course counts toward the following majors: Analytical Finance, Finance.

This course examines the role of taxes in a firm's financial strategy. Tax knowledge is not a prerequisite, and we do not cover the specifics of any one tax code. Instead we study the basic structure of tax codes and identify the fundamental sources of gains from tax planning. General principles are illustrated with examples from past and current tax law in the United States and other countries. Real examples of tax planning and cases are used. We study financial decisions such as the choice of organizational form, investments in real and financial assets, and different methods of financial investments. FINC-465-0 is a prerequisite for this course, but they may be taken concurrently.

Executive MBA
Managerial Finance II (FINCX-441-0)
Managerial Finance II analyzes corporate financial decisions. Topics include market efficiency, capital structure, dividend and stock repurchase policy, and firms’ use of options and convertible securities.

Strategic Financial Management (FINCX-442-0)
Strategic Financial Management examines financial management theory and cases. Students use valuation skills to determine the cost of capital, financing and operating issues faced by the firm. PREREQUISITE: Managerial Finance II (FINCX-441-0)