Preparing students to enter the business world in today’s rapidly changing climate is no easy feat, but for Cox School of Business Associate Professor of Finance Stacey Jacobsen, giving them the tools, they need to adapt and swim with the current is her priority.
“That’s always been the case, but today in particular, I think students really need to be flexible,” says Jacobsen. “They need to be able to anticipate and respond to all of these changes. The big institutional details are always changing. When students attend SMU or any school, we may not be able to discuss all of these forthcoming issues, but the hope is that they have the basic theoretical framework and tools to respond to whatever comes their way.”
Jacobsen, whose parents, brother, aunts and uncles are all academics and who grew up in college towns, received her PhD at Indiana University. She took her first academic job at SMU Cox just over a decade ago and practices this adaptability in her own career every day. The finance professor has a dual research focus, homing in on both market microstructure research and corporate finance research. Naturally, her own discoveries have shaped her teaching style and presented an invaluable resource for her students.
Currently, she’s working on major papers in both of these areas. On the market microstructure side, she’s been working alongside fellow Cox finance department co- authors Bill Maxwell and Kumar Venkataraman, and another co-author, Hank Bessembinder from Arizona State University, on a paper exploring the issuance process in the corporate bond market.
“This has been a fun paper because there is a massive literature that looks at the issuance dynamics in the equity market, but we know very little about the process in the corporate bond market,” says Jacobsen. “This is important because the corporate bond market is many times larger than the equity market. Really, what we want to understand is whether the underwriter who manages the issuance undertakes any activities to stabilize the price of the bond following the issuance.”
On the corporate finance side, Jacobsen says she has been working on a research paper (co-authored with Ben-David Itzhak, Jack Liebersohn and Zach Tzachi) that presents a somewhat controversial finding.
“We’re arguing that many corporate policies can be explained by a simple framework — namely, managers’ fixation on earnings per share, or EPS, and that this simple framework can explain managerial decisions in a more comprehensive manner than other theories regarding corporate policies,” she says.
With every new finding from her research, Jacobsen adapts her lessons to better prepare students to enter the finance field well-versed.
“I think it took me a few years to really see the huge potential synergies that exist between the two,” says Jacobsen. “I bring my research findings and the research of other faculty members into each lecture. But importantly, I learn a lot from my students. I teach at the graduate level, so most of my students have quite a bit of work experience.”
This two-way synergy flow is an unexpected bonus for Jacobsen — and it has become an important part of her research process.