Remove Cost of Capital Remove Development Remove Finance Remove Productivity
article thumbnail

Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement.

article thumbnail

The Rise of FinTech in Supply Chains

Harvard Business Review

The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.). The supplier gives the buying firm a discount on the invoice amount at the buyer’s lower cost of capital. The buying firm benefits through longer payables, which positively impact its working capital.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

CEO 8
article thumbnail

What’s Driving Superstar Companies, Industries, and Cities

Harvard Business Review

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

article thumbnail

How CMOs Can Get CFOs on Their Side

Harvard Business Review

This lack of an analytical approach has traditionally formed a barrier between marketing and finance. Without a strong business case built on analytics, marketing too often is seen as a cost rather than an investment, despite marketing’s ability to drive above-market growth.

CFO 8
article thumbnail

4 Ways Leaders Can Get More from Their Company’s Innovation Efforts

Harvard Business Review

One reason for the paltry performance is that while other business areas, like sales or finance, are considered to be core functions, innovation is often considered to be something that’s “nice to have” rather than essential. Here are four things leaders can do. Don’t Get Trapped in Your P&L.

article thumbnail

How Banks Can Compete Against an Army of Fintech Startups

Harvard Business Review

Recent analysis by Bain and SAP found that only 7% of bank credit products could be handled digitally from end to end. Banks’ cost of capital is typically 50 basis points or less. These low-cost and reliable sources of funds are from taxpayer-insured deposits and the Federal Reserve’s discount window.

Banking 11