Timothy J. Loughran
C.R. Smith Professor of Finance
Location, location, location: it’s the real-estate mantra we all have heard. It influences a buyer’s decision about where to purchase a home or commercial property—and it certainly affects the price of those properties. But is it possible that location also plays a role in determining something like equity issuance? According to Tim Loughran, it most certainly does.
Loughran’s research, published in Financial Management, indicates that firms in rural areas are less likely to issue equity than are firms in major metropolitan areas. Moreover, rural firms that do issue equity often do so using lower-quality underwriters. Both factors put equity investors in rural offerings at a significant information disadvantage.
Research such as this has earned Loughran wide renown as an expert in equity investing, and his work has been featured in top academic journals, as well as in popular publications such as the New York Times, the Wall Street Journal, Forbes, and the Economist. An associate editor of several journals in his field, Loughran is the recipient of numerous outstanding teacher awards at Notre Dame.
One of the founders of American Airlines, Cyrus Rowlett “C.R.” Smith (’68 HON) served as chief executive officer from 1934 to 1968, when he became Secretary of Commerce in President Lyndon B. Johnson’s Cabinet. Smith was a longtime member of the Mendoza College of Business Advisory Council.