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Current Glucksman Fellowship Program Student Research Reports

The Glucksman Institute for Research in Securities Markets awards fellowships each year to outstanding second year Stern MBA students to work on independent research projects under a faculty member's supervision. Four research projects completed by the Glucksman Fellows of 2015-2016 are included in a special Glucksman Institute Working Paper. These papers focus on important topics in empirical financial economics.

Sandra Re, under the supervision of Lawrence White, examines the securities market reaction to 74 announcements of Breakthrough Therapy Designation granted by the Food and Drug Administration from the inception of the program in January 2013 to December 2015. David Stone, under the direction of Luis Cabral, explores the potential impact of off-grid distributed electric power generation on the financial viability of Public Service Electric & Gas Company and Southern California Edison, two investor owned electric utilities. Ju Tan, under the supervision of Stijn Van Nieuwerburgh, uses satellite imagery of retailer parking lot car counts (PLCC) as an empirical means to gauge retailer monthly same-store sales SSS and studies whether it is possible to predict retailer stock returns with changes in PLCC. Charlotte Wells, under the supervision of Alexander Ljungqvist, examines the market potential of Title III (Regulation Crowdfunding) of The JOBS Act as it relates to independent film, which permits small companies to engage in equity crowdfunding online by soliciting funds from a non-accredited class of investor. These papers, reflecting the research effort of four outstanding Stern MBA students, are summarized in more detail below. You may download any of these research papers, as well as those of previous years, by clicking here.

William L. Silber, Director

2015-2016 Abstracts

Stock Market Reaction to FDA Breakthrough Therapy Designation: An Event Study of Capital Market Responses to Pharmaceutical Companies’ Breakthrough Therapy Designation Announcements from 2013 to 2015
Sandra Eva Re
 
This study examines the securities market reaction to 74 announcements of Breakthrough Therapy Designation granted by the Food and Drug Administration from the inception of the program in January 2013 to December 2015. Pharmaceutical firms submit requests for Breakthrough Therapy Designation to accelerate clinical trials of a promising drug and to expedite regulatory review required prior to commercialization. The results show that receiving Breakthrough Therapy Designation has a small positive effect on the price of the company’s equity on the day of the announcement. Thus, an FDA Breakthrough Therapy Designation enhances investor recognition of firm value. The analysis also shows that this effect is more pronounced with smaller firms.
 
Case Studies on the Future of Regulated Electric Utilities in the US
David Stone

This paper explores the potential impact of off-grid distributed electric power generation on the financial viability of Public Service Electric & Gas Company and Southern California Edison, two investor owned electric utilities. More specifically, the paper looks at scenarios through 2030 with varying rates of price declines (representing technological advances) for off-grid photovoltaic/battery systems, and examines each utilities’ business situation in the final year. The results indicate that Southern California Edison is more vulnerable to the threat of off-grid distributed generation than Public Service Electric & Gas Company. However, both utilities are relatively resilient to these risks except in the case of technological breakthroughs for off-grid distributed generation.
 
 
Macroscope of Retailers An Empirical Analysis of the Relation between Satellite Imagery of Retailers’ Parking Lot Car Counts and their Respective Same-Store Sales and Equity Prices
Ju Tan

Investors, economists and policy-makers look to retailers’ monthly same-store sales (SSS) reports as an indicator of both retailer-specific performance as well as broader consumer spending sentiment. This report uses satellite imagery of retailer parking lot car counts (PLCC) as an empirical means to gauge retailer SSS and studies whether it is possible to predict retailer stock returns with changes in PLCC. The analysis shows there exists a statistically significant relation between PLCC and SSS for certain individual retailers, specific industries of retailers, and retailers as an aggregate, but cannot identify a statistically significant relation between changes in PLCC and retailer stocks returns.

Equity Crowdfunding for Independent Film and The JOBS Act: Sizing the Market Potential of Title III
Charlotte Wells

This study looks at the market potential of Title III (Regulation Crowdfunding) of The JOBS Act as it relates to independent film, which permits small companies to engage in equity crowdfunding online by soliciting funds from a new class of investor. Films with budgets under $5 million are identified as the most probable candidates to seek financing, but they demonstrate a low probability of generating a return. Thus, for this new model to satisfy demand, investors must be motivated by incentives beyond financial gain. Philanthropic incentives could generate social gain by creating opportunities for creators and content overlooked by traditional funding sources.