Remove Cost of Capital Remove Finance Remove Innovation Remove Productivity
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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.

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Entrepreneurship Suffers When Well-Paid Jobs Are Plentiful

The Horizons Tracker

A few years ago I wrote about innovation and entrepreneurship in Norway and Qatar. They believe that their findings add additional nuance to the current narrative that suggests that the decline in entrepreneurship is largely a consequence of higher startup costs, labor constraints, or even the aging population. Opportunity costs.

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

Harvard Business Review

A recent McKinsey report found that while 84% of corporate executives think innovation is key to achieving growth objectives, only 6% are satisfied with the innovation performance of their firm. Even if executives try to prioritize it, innovation often gets crowded out by more “urgent” short-term pressures.

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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.)

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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
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The Real Reasons Companies Are So Focused on the Short Term

Harvard Business Review

Some argue that profits are stagnant because of short-termism—that decades of focusing on current profits over long-run innovativeness has resulted, now, in companies that are hollowed out. One trend that has contributed to short-termism and lower innovativeness is the increased prevalence of outside CEOs.