Marcus M. Opp Ph.D.

Professor of Finance
Stockholm School of Economics

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Executive summary

My research spans contract theory, financial intermediation, and international finance. My most recent research agenda (joint with Martin Oehmke) analyzes the economics of socially responsible investment (EFA 2020 best paper prize in responsible finance) and how to integrate climate change into financial regulation. I have served as a board member of the Finance Theory Group from 2016 to 2018 and am an editor of the Review of Finance since 2023. The paper “Target revaluation after failed takeover attempts - Cash versus stock” won the 2016 Jensen prize for the best paper published in the Journal of Financial Economics in the areas of corporate finance and organizations (first place). Moreover, I have been awarded the 2017 Poets and Quants “Top 40 under 40” award for professors of world-wide business schools, the Bessel award of the Alexander-von-Humboldt Foundation (~EUR 45k) as well as numerous project grants.

Research overview:

Research statement and Google Scholar Profile

1) Sustainable finance and regulation: (12), (13), (14).

2) Financial regulation, financial intermediaries (banks, rating agencies): (4), (9), (10), (11).

3) Contract and relationship dynamics: (3), (5), (6), (8).

4) International/ macro: trade theory, DSGE models: (1), (2), (5).



Published and forthcoming papers:


(12) “A theory of socially responsible investment,” 2024, joint with Martin Oehmke, forthcoming in Review of Economic Studies. Winner of EFA 2020 best paper prize in responsible finance.


(11) “Intermediary Capital and the Credit Market” 2024, joint with Milton Harris and Christian Opp, forthcoming in Management Science.


(10) “The economics of deferral and clawback requirements,” 2022, joint with Florian Hoffmann and Roman Inderst, Journal of Finance), 77, 2423-2470. Non-technical insights in Harvard Law School Forum on Corporate Governance.


(9) “Regulatory forbearance in the U.S. insurance industry: The effects of removing capital requirements for an asset class,” 2021, joint with Bo Becker and Farzad Saidi (Review of Financial Studies), 35, 5438–5482. Online Appendix.


(8) “Only time will tell: a theory of deferred compensation,” 2021, joint with Florian Hoffmann and Roman Inderst, Review of Economic Studies, 88, 1253-1278. Online Appendix.

Main insight: This paper characterizes optimal compensation contracts in principal-agent settings in which the consequences of the agent's action are only observed over time.


(7) “Target Revaluation after Failed Takeover Attempts - Cash versus Stock,” 2016, joint with Ulrike Malmendier & Farzad Saidi, Journal of Financial Economics, 119, 92-106. Winner of 2016 Jensen Prize for the best Corporate Finance paper published in the Journal of Financial Economics. Online Appendix


(6) “Impatience versus incentives,” 2015, joint with John Zhu, Econometrica, 83, 1601-1617. Presentation Slides from Econometric Society Meeting, Boston 2015.


(5) “Markup cycles, dynamic misallocation, and amplification,” 2014, joint with Christine Parlour & Johan Walden, Journal of Economic Theory, 154, 126-161.

(4) “Rating agencies in the face of regulation,” 2013, joint with Christian C. Opp & Milton Harris, Journal of Financial Economics, 108, 46-61. Winner of the 2016 Emerald Citation Award.
Abridged version of paper for Fame magazine.


(3) “Expropriation risk and technology,” 2012, Journal of Financial Economics, 103, 113-129. Winner of the 2008 John Leusner Award for the best dissertation at the University of Chicago in the field of Finance.

(2) “Tariff wars in a Ricardian model with a continuum of goods,” 2010, Journal of International Economics, 80, 212-225.

(1) “Rybczynski's theorem in the Heckscher-Ohlin world - anything goes,” 2009, joint with Hugo Sonnenschein & Christis Tombazos, Journal of International Economics, 79, 137-142.


Completed working papers:


(13) “Green capital requirements,” 2023, joint with Martin Oehmke (revise and resubmit at Journal of Finance). (NBER CF Fall 2022 presentation as video)

Abstract: We study bank capital requirements as a tool to address financial risks and externalities caused by carbon emissions. Capital regulation can effectively address climate-related financial risks but doing so does not necessarily reduce emissions. For example, higher capital requirements for carbon-intensive loans exposed to transition risk may crowd out lending to clean firms. When it comes to affecting carbon externalities, capital requirements are inferior to carbon taxes: Reducing carbon emissions via capital requirements may require sacrificing financial stability or may be altogether infeasible. However, if the government is unable to commit to future environmental policies, capital requirements can make higher carbon taxes credible by ensuring banks have sufficient capital to absorb losses from stranded asset risk.


(14) “Greenwashing and Retail investors: The case for a Taxonomy for ESG Investments?,” 2024, joint with Roman Inderst.

Abstract: Our paper analyzes whether a planner should design a taxonomy for sustainable investment products when conventional tools for environmental regulation can also be used to address externalities arising from firm production. We first show that the private market provision of ESG funds marketed to retail investors involves greenwashing: Regardless of the sustainability of firms' production choices, all firms are marketed as sustainable. A mandatory taxonomy prevents greenwashing and is necessary to generate real effects of sustainable investment products. However, the introduction of such a taxonomy can only improve welfare, on top of optimally chosen environmental regulation, if financial constraints constrain socially valuable economic activity. Otherwise, environmental policy alone is sufficient to optimally address externalities.


Work in progress:


(15) “Stranded Assets," 2022, joint with Martin Oehmke and Jan Starmans.


Peter DeMarzo

Douglas W. Diamond

Bengt Holmström

Raghuram G. Rajan


+1 (650) 736-1082

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+1 (617) 253-0506

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WEB DESIGN by Natalia Kovrijnykh: February 27, 2024