Are there any interesting insights from your projects that you could share with us?
On a recent project on information aggregation, an innovative research stream looked at how information about corporate decisions can be integrated with that of financial markets to better understand future company stock returns. It turns out that corporate insiders – e.g. board members and senior executives – can signal internal information via actions such as share repurchase programmes or equity issuance.
Our work shows that the stock returns of companies we identify that announce a share repurchase programme are significantly higher in the two to four years post announcement of the programme than that of other companies, indicating a fascinating case where even the financial markets may be less efficient in aggregating information. Hence, stock returns predictions (known to being notoriously difficult to understand, let alone predict) can be improved if other information sources are brought into the analysis. If stock returns can be predicted (the specific case is known as the “buyback anomaly” in financial markets) when all relevant information sources are combined, then one can imagine how insights about other less complex situations can be developed – using careful data analytics processes that eLab and the INSEAD faculty are working on.
What opportunities in collaboration might there be with companies?
Any organisation that would have the interest and capacity to support innovative data-driven research is a candidate collaborator and contributor to eLab’s mission to develop innovative tools and insights from data to support business, regulatory, financial, and political decisions. Such collaborations to succeed need to have, among others, three key ingredients: commitment of a company sponsor and resources, innovative data and insights/hypotheses to be studied, and a fit with the skills and interests of the INSEAD faculty.
Interview with Theodoros Evgeniou, Professor of Decision Sciences and Technology Management at INSEAD and Academic Director of INSEAD eLab
Published in FOCUS Magazine — Issue #1 2018 “Ready? Start-Up. Go!”