Paola Sapienza
Paola Sapienza

Donald C. Clark/HSBC Chair in Consumer Finance
Professor of Finance

Print Overview

Paola Sapienza is the Donald C. Clark/HSBC Chair in Consumer Finance Professor at the Kellogg School of Management. She also serves as a faculty research fellow in the National Bureau of Economic Research's program on corporate finance and political economy, and has previously served as a faculty fellow in the former Zell Center for Risk Research, a research affiliate of the Center for Economic Policy Research.

Sapienza's areas of expertise include banking and financial institutions, behavioral economics, behavioral finance, corporate finance, emerging markets and regulation of financial markets, private equity and venture capital. Sapienza has written articles on banking, social capital, trust and financial development. Her work has been published in such journals as the American Economic Review, the Quarterly Journal of Economics, the Journal of Finance, the Journal of Financial Economics, and Science. She has been featured in the Thompson Reuter's list of most influential scientific minds in 2014 and 2015. She holds a teaching affiliation with the Kellogg School's Heizer Center for Private Equity and Venture Capital. Professor Sapienza has been an Associate Editor at the Journal of Economic Perspectives, Management Science, and the Journal of Finance. She was elected director of the American Finance Association in 2011 for a three year term. She serves on the board of the Academuc Female Finance Committee (AFFECT).

Prior to joining Kellogg, Sapienza worked as an economist in the research department of Bank of Italy. She received a bachelor's degree in economics from Bocconi University, and an MA and PhD in Economics from Harvard University.

Professor Sapienza is an independent board member of Assicurazioni Generali SpA since April 2010.

Areas of Expertise
Banking and Financial Institutions
Behavioral Economics
Behavioral Finance
Corporate Finance
Emerging Markets
Regulation of Financial Markets

Print Vita
PhD, 1998, Economics, Harvard University
MA, 1993, Economics, Harvard University
Bachelor in Economics (Laurea), 1989, Economics, Bocconi University, Milan, Summa Cum Laude

Academic Positions
Professor, Finance, Kellogg School of Management, Northwestern University, 2009-present
Faculty Affiliate, International Organizations & International Law (IO/IL) Working Group, Buffett Center for International and Comparative Studies, Northwestern University, 2008-present
Research Fellow, Centre for Economic Policy Research, 2007-present
Research Associate, National Bureau of Economic Research, 2007-present
Faculty Fellow, Zell Center for Risk Research, Northwestern University, 2006-present
Faculty Affiliate, Roberta Buffett Center for International and Comparative Studies, Northwestern University, 2001-present
Faculty Fellow, Center for International Economics and Development, Northwestern University, 2000-present
Visiting Fellow, GSB Initiative on Global Markets, University of Chicago, 2009-2009
Ford Visiting Associate Professor, Finance, Booth School of Business, University of Chicago, 2008-2009
Associate Professor, Finance, Kellogg School of Management, Northwestern University, 2006-2009
Faculty Research Fellow, National Bureau of Economic Research, 1999-2007
Research Affiliate, Centre for Economic Policy Research, 1998-2007
Assistant Professor, Finance, Kellogg School of Management, Northwestern University, 1998-2006

Honors and Awards
Thompson Reuter/Clarivate list of the Most Influential Scientific Minds, 2014, 2015, 2016, 2014, 2015, 2016 consecutive years
Appointed as Director of the Academic Female Finance Committee (AFFECT), American Finance Association, 2016-2019
Elected Director of the American Finance Association, American Finance Association, 2012-2014
Smith Breeden Distinguished Paper Award, Journal of Finance, 2009

Editorial Positions
Associate Editor, Journal of Finance, 2012-2015
Associate Editor, Management of Science, 2009-2013
Associate Editor, Journal of Economic Perspectives, 2005-2008

Print Research
Research Interests
Financial development, financial institutions, political economy, behavioral economics

Sapienza, Paola, Luigi Guiso and Luigi Zingales. 2016. Monnet's Error. Economic Policy. 31(86): 247-297.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. Forthcoming. Time Varying Risk Aversion. Journal of Financial Economics.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. Forthcoming. Long Term Persistence. Journal of European Economic Association.
Reuben, Ernesto G., Paola Sapienza and Luigi Zingales. 2015. Procrastination and Impatience. Journal of Behavioral and Experimental Economics. 58: 63-76.
Sapienza, Paola, Luigi Guiso and Luigi Zingales. 2015. The Value of Corporate Culture. Journal of Financial Economics.
Sapienza, Paola, Ernesto G. Reuben and Luigi Zingales. 2014. How Stereotypes Impair Women's Career in Science. Proceedings of the National Academy of Sciences. 111(12): 4403-4408.
Sapienza, Paola. 2014. Economic Experts versus Average Americans. American Economic Review, Papers & Proceedings. 103(3): 636-42..
Sapienza, Paola, Anna Toldra and Luigi Zingales. 2013. Understanding Trust. The Economic Journal. Doi:10.1111/ecoj.12036
Sapienza, Paola and Luigi Zingales. 2012. A Trust Crisis. International Review of Finance. 12(2): 123-131.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2013. The Determinants of Attitudes towards Strategic Defaults in Mortgages. Journal of Finance. 68(4): 1473-1515.
Reuben, Ernesto G., Pedro Rey-Biel, Paola Sapienza and Luigi Zingales. 2012. The emergence of male leadership in competitive environments. Journal of Economic Behavior and Organization. 83(1): 111-117.
Ravina, Enrichetta and Paola Sapienza. 2010. What Do Independent Directors Know? Evidence from Their Trading. Review of Financial Studies. 23(3): 962-1003.
Reuben, Ernesto G., Paola Sapienza and Luigi Zingales. 2010. Time Discounting for Primary and Monetary Rewards. Economic Letters. 106: 125-127.
Maestripieri, Dario, Paola Sapienza and Luigi Zingales. 2010. Between- and Within-sex Variation in Hormonal Responses to Economic Decision Making Tests in a Large Sample of MBA Students. Stress. 13(5): 413-424.
Maestripieri, Dario, Paola Sapienza and Luigi Zingales. 2009. Gender Differences in Financial Risk Aversion and Career Choices are Affected by Testosterone. Proceedings of the National Academy of Sciences. 106(36): 15268-15273.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2009. Cultural Biases in Economic Exchange. Quarterly Journal of Economics. 124(4): 1095-1131.
Reuben, Ernesto G., Paola Sapienza and Luigi Zingales. 2009. Is Mistrust Self-Fulfilling?. Economics Letters. 104(2): 89-91.
Hochberg, Yael V., Paola Sapienza and Annette Vissing-Jorgensen. 2009. A Lobbying Approach to Evaluating the Sarbanes-Oxley. Journal of Accounting Research. 47(2): 519-583.
Polk, Christopher and Paola Sapienza. 2009. The Stock Market and Corporate Investment: a Test of Catering Theory. Review of Financial Studies. 22(1): 187-217.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2008. Trusting the Stock Market. Journal of Finance. 63(6): 2557-2600.
Guiso, Luigi, Ferdinando Monte, Paola Sapienza and Luigi Zingales. 2008. Culture, Gender, and Math. Science. 320(2880): 1164-1165.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2008. Alfred Marshall Lecture -- Social Capital as Good Culture. Journal of the European Economic Association. 6(2-3): 295-320.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2006. Does Culture Affect Economic Outcomes?. Journal of Economic Perspectives. 20(2): 23-48.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2004. Does Local Financial Development Matter?. Quarterly Journal of Economics. 119(3): 929-969.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2004. The Role of Social Capital in Financial Development. American Economic Review. 94(3): 526-556.
Sapienza, Paola. 2004. The Effects of Government Ownership on Bank Lending. Journal of Financial Economics. 72(2): 357-384.
Reprinted in:
A Reader in International Corporate Finance, edited by Stijn Claessens and Luc Laeven, vol. 72, 259-286. Washington, DC: World Bank Publications, 2006.
Guiso, Luigi, Paola Sapienza and Luigi Zingales. 2003. Peoples Opium? Religion and Economic Attitudes. Journal of Monetary Economics. 50(1): 225-282.
Sapienza, Paola. 2002. The Effects of Banking Mergers on Loan Contracts. Journal of Finance. 57(1): 329-367.
Working Papers
Ozek, Umut and Paola Sapienza. 2017. Long-Term Orientation and Educational Performance.
Sapienza, Paola, Vineet Bhagwat and Apaar Kasliwal. 2012. Surya Tutoring: Evaluating a Growth Equity Deal in India. Case 5-312-501 (KEL679).

Print Teaching
Teaching Interests
Corporate Finance Private Equity and Venture Capital
Full-Time / Evening & Weekend MBA
Entrepreneurial Finance and Venture Capital (FINC-445-0)
This course uses the case method to study entrepreneurial finance and venture capital decision focusing on the funding decisions of start-ups (fast growing entrepreneurial firms). The goal is to understand how entrepreneurs can raise funds and how venture capital partnerships and growth equity funds choose, value, structure, fund, and manage their investments. The course covers all stages of the financing process, from startup to harvest. Several cases concern technology-based businesses, though the emphasis is on gaining insights into entrepreneurial finance, not technology per se. The course will go into great details with respect to structuring multi-staged financings and valuing entrepreneurial ventures. In addition, the course provides insights on how venture capital partnership work, why do they take the forms they do, and where the crucial problems and opportunities for innovation exists. Consideration is given to the incentives faced by venture capital partnerships and the investors in those partnerships, and how to properly make financing decisions and negotiate contractual terms. Emphasis is given to high growth start-ups searching for funding in the US and venture capital funding as opposed to more traditional entrepreneurial and family firms operating globally (see FINC945 for these topics) and to Leverage Buyouts (see FINC-448 for LBOs). The course is aimed primarily at people who may be involved in an entrepreneurial venture at some point in their careers whether in a large organization, a turnaround, a management buyout or a startup. The course is also useful for venture capital careers.

Corporate Finance II (FINC-586-2)
This course provides a theoretical and empirical treatment of major topics in empirical corporate finance, including: investment decisions, capital structure, corporate governance, and law and finance.

Corporate Finance III (FINC-586-3)
This course provides a theoretical and empirical treatment of major topics in empirical corporate finance, including financial contracting; banking, securitization, and financial regulation: household finance and macroeconomics; entrepreneurship and venture capital.

Executive MBA
Entrepreneurial Finance & Venture Capital (FINCX-446-0)
Entrepreneurial activity has been a potent source of innovation and job generation in the global economy. In the U.S., the majority of new jobs are generated by new entrepreneurial firms. The financial issues confronting entrepreneurial firms are drastically different from those faced by established companies. The focus on this course will be on analyzing the unique financial issues faced by high growth entrepreneurial firms (think: high growth startups), including the different sources of financing and the type of contracts offered to these type of firms.