Carola Frydman
Carola Frydman

Professor of Finance

Print Overview

Carola Frydman is a Professor of Finance at the Kellogg School of Management. Professor Frydman's research focuses on American business history. Recent research projects examine the evolution of financial markets during the early twentieth century, with special emphasis on the role of financial intermediaries for firm growth, and on financial crises. She has also studied the long-run trends in executive compensation, the market for managers, and corporate governance. Her work has been published at journals such as the American Economic Review, the Journal of Political Economy, the Journal of Financial Economics, and the Journal of Economic History, and featured in The Wall Street Journal, the New York Times, and The Economist. She is on the Editorial Board of Explorations in Economic History, the Journal of Economic History, and of the Review Studies in Corporate Finance. Prior to joining Kellogg, Professor Frydman was an Assistant Professor of Finance at the MIT Sloan School of Management (2006-2011) and an Assistant Professor of Economics at Boston University (2011-2016). She holds a Ph.D. in Economics from Harvard University, and B.A. and M.A. degrees in Economics from Universidad de San Andres, Argentina, and is a Research Associate at the National Bureau of Economic Research.

Areas of Expertise
Banking and Financial Institutions
Corporate Finance
Corporate Governance
Economics of Organizations
Management Compensation

Print Vita
Ph.D., 2006, Economics, Harvard University
M.A., 2004, Economics, Harvard University
M.A., 2000, Economics, Universidad de San Andres
B.A., 1999, Economics, Universidad de San Andr, Universidad de San Andres, Summa Cum Laude

Academic Positions
Professor of Finance, Kellogg School of Management, Northwestern University, 2017-present
Associate Professor of Finance, Kellogg School of Management, Northwestern University, 2016-2017
Visiting Associate Professor of Finance, Kellogg School of Management, Northwestern University, 2013-2016
Assistant Professor, Economics, Boston University, 2011-2016
Faculty Research Fellow, National Bureau of Economic Research, National Bureau of Economic Research (NBER), 2007-present
Assistant Professor of Finance, Sloan School of Management, Massachusetts Institute of Technology, 2006-2013
Visiting Scholar, National Bureau of Economic Research, University of Cambridge, 2009-2010

Other Professional Experience
Local Arrangements Committee, Economic History Associations Meeting, 2010-2011
Program Committee Member, American Finance Association Meetings, 2010-2010
Program Committee Member, Western Finance Association Meetings, 2009-2010
Early Career Women in Finance Conference, Women in Finance Conference, 2009-2009
Program Committee Member, Western Finance Association Meetings, 2007-2007

Editorial Positions
Editorial Board, Review of Corporate Finance Studies, 2016-2018
Editorial Board, Journal of Economic History, 2017-2019
Editorial Board, Explorations in Economic History, 2016-2018

Print Research
Papanikolaou, Dimitris and Carola Frydman. Forthcoming. In Search of Ideas: Technological Innovation and Executive Pay Inequality. Journal of Financial Economics.
Frydman, Carola and Eric Hilt. Forthcoming. Investment Banks as Corporate Monitors in the Early 20th Century United States. American Economic Review.
Frydman, Carola, Eric Hilt and Lily Y. Zhuo. 2015. Economic Effects of Runs on Early 'Shadow Banks': Trust Companies and the Impact of the Panic of 1907. Journal of Political Economy. 123(4): 902-940.
Benmelech, Efraim and Carola Frydman. 2015. Military CEOs. Journal of Financial Economics. 117(1): 43-59.
Frydman, Carola. Forthcoming. Rising Through the Ranks. The Evolution of the Market for Corporate Executives, 1936-2003. Management Science.
Frydman, Carola and Raven Molloy. 2012. Pay Cuts for the Boss: Executive Compensation in the 1940s. Journal of Economic History. 72(1): 225-251.
Frydman, Carola and Raven Molloy. 2011. The Effect of Tax Policy on Executive Compensation: Evidence from Postwar Reforms. Jounal of Public Economics. 23: 2099-2138.
Frydman, Carola and Raven E. Saks. 2010. Executive Compensation: A New View from a Long-Term Perspective, 1936-2005. Review of Financial Studies. 23: 2099-2138.
Frydman, Carola and Dirk Jenter. 2010. CEO Compensation. Annual Review of Financial Economics. 2(1): 75-102.
Frydman, Carola and Raven E. Saks. 2010. Executive Compensation: A New View from a Long-Term Perspective, 1936-2005. Review of Financial Studies. 23: 2099-2138.
Working Papers
Benmelech, EfraimCarola Frydman and Dimitris Papanikolaou. 2017. Financial Frictions and Employment During the Great Depression.
Boustan, Leah P., Carola Frydman and Robert Margo. 2014. Human Capital in History. University of Chicago Press.

Print Teaching
Full-Time / Evening & Weekend MBA
Finance II (FINC-431-0)

**This version of Finance II is designed for students who took Finance I during or after Fall 2014**

Finance II: Corporate Finance covers the financial knowledge you need to run a firm, whether the firm is a multi-billion international conglomerate or a three-person start up. You will learn how to answer the three fundamental question of corporate finance: (1) Capital structure or the funding decision: which source(s) of capital should you use to fund the firm's project? (2) Capital budgeting or the investment decision: which projects should you invest in? (3) Dividend decision: how should you deploy the capital that the project returns?

We will cover the three fundamental methods for valuing projects and firms: discounted cash flow (or net present value), real options, and multiples analysis. The class begins with a theoretical framework. The world of finance is very complex. Without a logical structure that you can use to frame and answer questions, you will rapidly become lost and will be unable to defend your position. The theoretical framework is valuable, however, only if you can use it to examine real world decisions. Thus the majority of class time will be devoted to applying the logical framework.

This course is important for anyone who plans to run a firm or a division, who hopes to be involved in the investment or funding decisions of the firm, who plans to work for a service provider who will assist the firm in analyzing these decisions (e.g., banking and consulting), or who plans to invest in firms or advise clients who will invest in firms. Even if you initially specialize in a different functional area, you want to understand how the finance function works. The most brilliant idea isn't useful if you cannot get it funded.

Recommended Prerequisites: ACCT-430 and MECN-430

Finance II (FINCM-431-0)

Research (FINC-590-0)
Independent investigation of selected problems pertaining to thesis or dissertation. May be repeated for credit.