David A. Matsa
David A. Matsa

FINANCE
Associate Professor of Finance

Print Overview
David Matsa is an Associate Professor of Finance at the Kellogg School of Management at Northwestern University, where he teaches corporate finance in the MBA program. Professor Matsa’s research focuses on connections between business and financial strategy and emphasizes the importance of labor market frictions in the corporate environment. His recent research examines optimal corporate capital structure determination, concentrating on various strategic motivations vis-à-vis the firm’s workforce, and on the role of managerial preferences in firms’ labor market and other strategies, including workforce hiring and downsizing decisions.


Professor Matsa received his Ph.D. in Economics from the Massachusetts Institute of Technology. Prior to graduate study, he worked as a consultant at McKinsey & Company.



Areas of Expertise
Corporate Bankruptcy
Corporate Capital Structure
Corporate Finance
Corporate Restructuring
Mergers and Acquisitions
Payout Policy (Dividends, Repurchases)
Print Vita
Education
PhD, 2006, Economics, Massachusetts Institute of Technology
BS, 2000, Economics, Massachusetts Institute of Technology
BS, 2000, Mathematics, Massachusetts Institute of Technology

Academic Positions
Associate Professor of Finance, Kellogg School of Management, Northwestern University, 2013-present
Assistant Professor of Finance, Kellogg School of Management, Northwestern University, 2006-2013

Grants and Awards
NYU Glucksman Award for the Best Paper in Finance, 2010-2011
CRA International Award for the Best Corporate Finance Paper at the Western Finance Association Meeting, 2009
Marshall Blume Prize in Financial Research, Honorable Mention, The Wharton School, University of Pennsylvania, 2012
Marshall Blume Prize in Financial Research, Honorable Mention, The Wharton School, University of Pennsylvania, 2011

 
Print Research
Research Interests
Corporate finance, industrial organization, regulation

Articles
Matsa, David A and Todd Gormley. Forthcoming. Common Errors: How to (and Not to) Control for Unobserved Heterogeneity. Review of Financial Studies.
Matsa, David A and Amalia Miller. Forthcoming. Workforce Reductions at Women-Owned Businesses in the United States. Industrial and Labor Relations Review.
Gormley, Todd, David A Matsa and Todd Milbourn. 2013. CEO Compensation and Corporate Risk-Taking: Evidence from a Natural Experiment. Journal of Accounting and Economics. 56(2-3): 79-101.
Matsa, David A and Amalia Miller. 2013. A Female Style in Corporate Leadership? Evidence from Quotas. American Economic Journal: Applied Economics. 5(3): 136-169.
Agrawai, Ashwini and David A Matsa. 2013. Labor Unemployment Risk and Corporate Financing Decisions. Journal of Financial Economics. 108(2): 449-470.
Matsa, David A. 2011. Competition and Product Quality in the Supermarket Industry. Quarterly Journal of Economics. 126(3): 1539-1591.
Gormley, Todd and David A Matsa. 2011. Growing Out of Trouble? Corporate Responses to Liability Risk. Review of Financial Studies. 24(8): 2781-2821.
Matsa, David A and Amalia Miller. 2011. Chipping Away at the Glass Ceiling: Gender Spillovers in Corporate Leadership. American Economic Review. 101(3): 635-639.
Matsa, David A. 2011. Running on Empty? Financial Leverage and Product Quality in the Supermarket Industry. American Economic Journal: Microeconomics. 3(1): 137-173.
Anderson, Michael and David A Matsa. 2011. Are Restaurants Really Supersizing America?. American Economic Journal: Applied Economics. 3(1): 152-188.
Matsa, David A. 2010. Capital Structure as a Strategic Variable: Evidence from Collective Bargaining. Journal of Finance. 65(3): 1197-1232.
Matsa, David A. 2007. Does Malpractice Liability Keep the Doctor Away? Evidence from Tort Reform Damage Caps. Journal of Legal Studies. 36(2): S143-S182.
Working Papers
Matsa, David ARavi Jagannathan, Iwan Meier and Vefa Tarhan. 2014. Why do firms use high discount rates?.
Brown, Jennifer and David A Matsa. January 2013. Boarding a Sinking Ship? An Investigation of Job Applications to Distressed Firms.
Matsa, David ABrian Melzer and Joanne W. Hsu. November 2012. Unemployment Insurance and Consumer Credit.
Book Chapters
Hosken, Daniel, David A Matsa and David Reiffen. 2001. "Pricing Dynamics of Multi-Product Retailers." In Advances in Applied Microeconomics, vol. 10, 129-153. London, UK: Elsevier.

 
Print Teaching
Teaching Interests
Corporate finance
Full-Time / Part-Time MBA
Finance II (FINC-431-0)
This course covers the basic financial knowledge needed to run a firm—whether the firm is a multi-billion dollar international conglomerate or a three-person start up. Using a combination of lectures and business cases, we will examine how firms fund their projects (capital structure), how they manage the risks that arise (risk management), and how they allocate the return on their investments (payout policy). This course is designed both for managers who will initially specialize in a different functional area (e.g., marketing, operations) and for managers who will be directly involved in making or analyzing these decisions (e.g., future senior executives, general managers, investment bankers, consultants, securities analysts, money managers, investment advisors).

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

Finance II (FINC-441-0)

Corporate Finance (FINC-441) 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.

ACCT-430 and MECN-430 are recommended.

This version of Finance II is designed for students who took Finance I in or before Summer 2014. This course will be offered in Fall 2014 in Evanston & Chicago and offered in Winter 2015 in Chicago


Thought Leadership Seminar: Contemporary Issues in Finance (FINC-484-A)
This seminar will facilitate an in-depth exploration of current issues in corporate governance and finance. Each week will focus on a different topic. The first week, we will debate a central question in corporate governance: should shareholder interests be the firm’s first priority? The seminar will also discuss major issues such as executive compensation and the rise in the top one percent, corporate decisions to lay off employees, public policies aimed at achieving gender parity in corporate boardrooms, and the public employee pension crisis (topics subject to change). Source materials will include a combination of business cases, recent academic research, and news articles from the popular press. In part of each weekly session, students will also lead discussions about current news articles that they select.