HIM Program Francesca Carrieri
Francesca Carrieri grew up in southern Italy. She earned her PhD at the University of Southern California. So when she arrived at McGill in 1998, she had some concern about the winter.
“I didn’t think I would last very long,” she recalls, “because of the weather.”
A decade later, Carrieri is an associate professor at Desautels -- and a Canadian citizen. “Europeans feel very at home in Montreal,” she says. The dozen or so finance professors at Desautels represent about 10 different nationalities, she notes.
International themes run through Carrieri’s academic research. Her current projects examine how integration of global capital markets and industries affect investment decisions. One area of inquiry: Despite lowering of formal barriers to international investment, how heavily do “implicit” obstacles weigh in investors’ calculations? Despite Canada’s lifting of foreign-investment restrictions on retirement accounts, for example, some Canadians may hesitate to invest abroad because of doubts over accounting rules or legal protection, Carrieri notes. China, in particular, is “so prominent in every respect” -- yet many investors believe that corporate governance there is “terrible,” she says. So they wonder “how to get exposure to that country” without running undue risks.
Among developed countries, meanwhile, industry consolidation has created global companies with similar risk profiles. In the same vein, policy coordination is leading these countries to follow broadly the same economic cycle. So institutional investors no longer can diversify risk in their portfolios simply by putting funds in different countries. With Desautels colleagues Vihang Errunza and Sergei Sarkissian, Carrieri has examined how those trends affect the pricing of assets in international markets. One implication: Investors can find value in industries that remain tied to specific risks of national economies. While a country’s overall market might reflect global patterns, certain sectors such as retailing could remain “really specific” to the local economy, Carrieri says. If an investor is able “to find an asset that has a risk that’s different” from what he owns, “that’s really valuable.”
A research paper analyzing “world market integration through time,” by Carrieri, Errunza and Ked Hogan of Barclays Global Investors, won the 2008 award from the Journal of Financial and Quantitative Analysis for the best article published in the journal. In this paper, a prequel to her current working paper on implicit barriers, she showed how the lowering of explicit barriers has increased financial integration for emerging markets.
Carrieri's doctoral dissertation, written during the years preceding the introduction of the euro, examined currency risk in European financial markets and the consequences of monetary unification.
Apart from her research, Carrieri has played an active role in redesigning the MBA program, for which she served as academic director. She also has a passion for cooking. Flanking the PhD diploma on her office wall is a degree from a Cordon Bleu school in Italy. “Montreal is great for food,” she says. “Greek food is great, Lebanese food is great,” but “when it comes to Italian food, I eat better at my place.”
Carrieri will be on sabbatical this year in Singapore and London, giving her “a little break” from Montreal winters.
-- Chris Chipello
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