Luke Taylor

Lucian (Luke) Taylor is an associate professor of finance at the Wharton School at the University of Pennsylvania. He earned his AB from Princeton University and MBA and PhD in Finance from the University of Chicago Booth School of Business.

Professor Taylor’s primary areas of research are empirical corporate finance and asset management. His research focuses on two main themes: structural estimation in corporate finance, and understanding the skill of important financial actors like CEOs and active fund managers. His articles have appeared in the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, as well as nonacademic outlets such as the Wall Street Journal, CNN Money, and Forbes. His research has received the Fama/DFA Prize for best paper in the Journal of Financial Economics, AQR Insight Award for Distinguished Paper, Rothschild Caesarea Center Best Paper Award, Marshall Blume Prize, Jacobs Levy Prize, and the NASDAQ Award. Professor Taylor is an associate editor at the Journal of Financial Economics and Review of Finance.

Since joining Wharton, Professor Taylor has taught Venture Capital and the Finance of Innovation (FNCE 250/750) to undergraduate, MBA, and executive MBA students.

Other Positions

Business Analyst, McKinsey and Company, 20012003

Ryan Heath Peters and Luke Taylor (Forthcoming), Intangible Capital and the Investmentq Relation.

Abstract: Including intangible capital significantly changes how we evaluate theories of investment. We show that including intangible capital in measures of investment and Tobin's q produces a stronger investmentq relation, especially in macroeconomic data and in firms that use more intangibles. These results lend support to the classic q theory of investment, and they call for the inclusion of intangible capital in proxies for firms' investment opportunities. However, including intangible capital also makes the investmentcash flow relation almost an order of magnitude stronger, which supports newer investment theories. The classic q theory performs better in settings with more intangible capital.

Robert F. Stambaugh, Luke Taylor, Lubos Pastor (2015), Scale and Skill in Active Management, Journal of Financial Economics, 116, pp. 2345.

Abstract: We empirically analyze the nature of returns to scale in active mutual fund management. We find strong evidence of decreasing returns at the industry level. As the size of the active mutual fund industry increases, a fund?s ability to outperform passive benchmarks declines. At the fund level, all methods considered indicate decreasing returns, though estimates that avoid econometric biases are insignificant. We also find that the active management industry has become more skilled over time. This upward trend in skill coincides with industry growth, which precludes the skill improvement from boosting fund performance. Finally, we find that performance deteriorates over a typical fund?s lifetime. This result can also be explained by industrylevel decreasing returns to scale.

Past Courses

FNCE250 VENT CAP & FNCE INNOVAT

This course covers the finance of technological innovation, with a focus on the valuation tools useful in the venture capital industry. These tools include the "venture capital method," comparables analysis, discounted cash flow analysis, contingentclaims analysis. The primary audience for this course is finance majors interested in careers in venture capital or in R&Dintensive companies in health care or information technology.

FNCE750 VENT CAP & FNCE INNOVAT

This course covers the finance of technological innovation, with a focus on the valuation tools useful in the venture capital industry. These tools include the "venture capital method," comparables analysis, discounted cash flow analysis, contingentclaims analysis, and real options. The primary audience for this course is finance majors interested in careers in venture capital or in R&Dintensive companies in health care or information technology.

The Facebook IPO: What Went Wrong?, Knowledge @ Wharton 05/23/2012

Knowledge @ Wharton

• What the Decline in Venture Capital Funding Means for Entrepreneurs, Knowledge @ Wharton 05/03/2016
• Of Unicorns and ‘Decacorns’: Is a Tech Startup Bubble Forming?, Knowledge @ Wharton 06/22/2015
• Why Youth Matters in Actively Managed Funds, Knowledge @ Wharton 05/14/2015
• Crafting a Questionable Future: Will a Successful IPO Ruin Etsy?, Knowledge @ Wharton 03/11/2015