Research Interests: Private Equity & Empirical Corporate Finance: agency conflicts, and their impact on corporate policies
Links: Personal Website
Burcu Esmer is a Senior Research Fellow at Wharton Harris Family Alternative Investments Program and Senior Lecturer of Finance at the Wharton School. Dr. Esmer earned her BSc in Economics and Minor in Mathematics from the Middle East Technical University (Turkiye) with Highest Honor (Summa Cum Laude), her MA in Economics and PhD in Finance from the University of Iowa. Dr. Esmer’s primary areas of research are empirical corporate finance, banking and private equity. She investigates agency conflicts, and their impact on corporate policies. Dr. Esmer has presented her work to different audiences at various academic and practioner conferences and workshops, and she frequently serves as a reviewer for academic journals and conferences. Burcu Esmer is a member of American Finance Association and European Finance Association.
Dr. Esmer teaches private equity and corporate finance in Wharton Executive Education and degree programs. She is the recipient of Wharton Teaching Excellence Reward for the academic year 2018-2019.
Dr. Esmer works closely with various non-profit organizations that aim to increase diversity in asset management industries. She is the Academic Director of Wharton-AltFinance Institute and Girls Who Invest (GWI) Summer Intensive Program. Dr. Esmer also serves on the Advisory Board of GWI.
Burcu Esmer, Naim Bugra Ozel Ozel, Suhas A. Sridharan (Forthcoming), Disclosure and lawsuits ahead of IPOs.
Abstract: We examine whether IPO registration disclosures expose firms to greater nonshareholder litigation risk. Using hand-collected data on lawsuits initiated at federal and state courts against IPO firms, we show that firms that submit their IPO registration statement with the SEC publicly experience a 16% increase in litigation risk between the registration filing and issuance date. Consistent with the public filing of the registration driving this heightened litigation risk, firms that file their registration confidentially under the JOBS Act do not experience such an increase in litigation risk. The effects of confidential filing are concentrated among business-initiated lawsuits, intellectual property/ contract lawsuits, and potentially meritless lawsuits. We find no disproportionate increase in post-IPO lawsuits for confidential filers, suggesting that withholding information during the IPO registration period mitigates litigation risk.
Abstract: Pricing and inventory management make up together revenue management, which is a significant effort to boost revenues out of available resources. Firms use various forms of dynamic pricing, including personalized pricing, markdowns, promotions, coupons, discounts, and clearance sales, to respond to market fluctuations and demand uncertainty. In this paper, we study a temporary price increase policy, a form of dynamic pricing, for a non-perishable product, a practice used by several giant retailers such as Amazon, Walmart, and Apple. We develop a continuous review inventory model that allows for joint replenishment and pricing decisions, where the lead time is not zero. A replenishment decision controls supply, while a pricing decision controls demand. A manager exercises a temporary price increase to slow demand and avoid a stock-out situation while waiting for a shipment, which may not necessarily increase revenues, but decrease stock-out costs. The problem is to solve for the optimal replenishment and the pricing policy parameters that maximize the long-run expected profit. That is, when and how much to order and when to raise the price. In this paper, the inventory level and time trigger a price increase. We solve many numerical examples and perform extensive sensitivity analyses. Our results show that compared to a model that focuses on fixed pricing, our model brings an additional increase in profit of about 13%.
Abstract: We explore how rival firms respond when firms in their industry violate debt covenants. We find that rival firms increase advertising expense, and that this increase is proportional to the size of industry violators’ pre-existing market share. Rival firm product-market share also increases in the industry market share of violators, and this relation is more pronounced when products are more substitutable. Rival firm operating performance also increases in proportion to the industry market share of violators. Overall, these findings suggest that the increased creditor control associated with covenant violations has a significant influence on rival firms and product-market competition.
This course discusses the theory and empirical evidence related to the various investment and financing policies of the firm and attempts to improve decision-making ability in these areas. This course covers aspects of financial management not covered in FNCE 1000, including mergers and acquisitions, corporate reorganizations, financial planning and working capital management. It also offers a more rigorous coverage of topics discussed in FNCE 1000, such as investment under uncertainty, cost of capital, capital structure, pricing of selected financial instruments and dividend policy.
The course focuses on financial tools, techniques, and best practices used in buyouts (financial buyers) and acquisitions (strategic buyers). While it will touch upon various strategic, organizational, and general management issues, the main lens for studying these transactions will be a financial one. It will explore how different buyers approach the process of finding, evaluating, and analyzing opportunities in the corporate-control market; how they structure deals and how deal structure affects both value creation and value division; how they add value after transaction completion; and how they realize their ultimate objectives (such as enhanced market position or a profitable exit). The course is divided into two broad modules. The first module covers mergers and acquisitions, and the second one studies buyouts by private equity partnerships. FNCE 2030 or FNCE 2070 are recommended.
Integrates the work of the various courses and familiarizes the student with the tools and techniques of research.
This course will cover a variety of applied topics in private equity (PE) with a focus on growth and later-stage buyout transactions. It will have a primarily U.S.-centric view that is largely applicable to other markets. Venture capital is not explicitly addressed in this course. Course topics will address the entirety of the deal process and value creation in the post-acquisition period, and will include the following: - LBO modeling - Commercial due diligence (principles and execution) - Debt financing - Sale & purchase agreements (SPA) - Accounting diligence - Deal structuring - Operations & Value creation Throughout the course, students will learn about each element of the deal process through in-class lectures, while concurrently applying those learnings to former transactions (these must be old enough that sharing material is no longer sensitive). The in-class lectures will cover conceptual frameworks, practical considerations and real-world case studies and examples. There will be four assignments in this course. The first three assignments will apply these learnings to the art of the deal through a real world lens. In the last assignment, students will develop a value creation plan for designated public companies "TargetCo1" and "TargetCo2". Students are expected to actively engage in classroom discussions, challenging one another and the instructors about how to think through these issues in an ever-evolving investment world. In addition, throughout the course, students are expected to work as a team on the assignments.
The course focuses on financial tools, techniques, and best practices used in buyouts (financial buyers) and acquisitions (strategic buyers). While it will touch upon various strategic, organizational, and general management issues, the main lens for studying these transactions will be a financial one. It will explore how different buyers approach the process of finding, evaluating, and analyzing opportunities in the corporate-control market; how they structure deals and how deal structure affects both value creation and value division; how they add value after transaction completion; and how they realize their ultimate objectives (such as enhanced market position or a profitable exit). The course is divided into two broad modules. The first module covers mergers and acquisitions, and the second one studies buyouts by private equity partnerships. FNCE 703 or FNCE 707 are recommended.
Independent Study Projects require extensive independent work and a considerable amount of writing. ISP in Finance are intended to give students the opportunity to study a particular topic in Finance in greater depth than is covered in the curriculum. The application for ISP's should outline a plan of study that requires at least as much work as a typical course in the Finance Department that meets twice a week. Applications for FNCE 8990 ISP's will not be accepted after the THIRD WEEK OF THE SEMESTER. ISP's must be supervised by a Standing Faculty member of the Finance Department.
The Honorable Mention for Best Mid-year Meeting Paper, American Accounting Association – FARS, 2022
Wharton Teaching Excellence Reward, 2019