Michael Ferguson

Headshot of Michael Ferguson

Michael Ferguson

Department Head and Associate Professor, Department of Finance, Real Estate, and Insurance and Risk Management

2352 Carl H. Lindner Hall

513-556-7080

Professor Ferguson graduated from Indiana University. Prior to joining UC he taught at the University of Arizona and Indiana University. Earlier he worked for First Chicago (now JP Morgan Chase) and the Commodity Futures Trading Commission.

Teaching Interest
Investments
Corporate Finance

Research Interest
Investments
Financial Institutions
Financial Contracting

History
Institution: University of Cincinnati
Title: Associate Professor of Finance

Institution: University of Cincinnati
Title: Assistant Professor of Finance
End Date: 2004-06-30

Institution: Indiana University
Title: Visiting Assistant Professor of Finance
End Date: 1999-07-31

Institution: University of Arizona
Title: Visiting Assistant Professor of Finance
End Date: 1996-08-31

Institution: Commodity Futures Trading Commission
Title: Financial Economist
End Date: 1993-06-30

Institution: Indiana University
Title: Associate Instructor/Research Assistant
End Date: 1991-07-31

Institution: First National Bank of Chicago
Title: Internal Consultant
End Date: 1986-06-30

Assignments
Finance Department Ph.D. program Coordintator Recruit new students...Advise current students...administer comprehensive exam
Dates: 2001-09-01 - 2014-09-30

MS Finance Admissions Recruiting, Advising
Dates: 2011-11-01 - 2012-06-30

Awards | Honors
Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2018

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2017

Organization: UC Department of Athletics
Name: Simon Anderson Faculty Recognition Award--nominee
Year Received: 2017

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2016

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2016

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2015

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2015

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2015

Organization: Financial Management Association
Name: Best Paper in Investments, Semi-finalist
Year Received: 2014

Organization: Lindner College of Business
Name: Lindner Research Fellow
Year Received: 2014

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2013

Organization: Lindner College of Business
Name: Dean's List of Teaching Excellence
Year Received: 2012

Organization: Southwest Finance Association
Name: AAII Best Paper in Investments
Year Received: 2012

Organization: Financial Management Association
Name: Best Paper in Investments, Semi-finalist
Year Received: 2011

Organization: Financial Management Association
Name: Best Paper in Corporate Finance, Semi-finalist
Year Received: 2009

Organization: American Finance Association
Name: Smith-Breeden Prize, Finalist
Year Received: 2004

Organization: Southern Finance Association
Name: Best Paper on Futures or Options
Year Received: 1995

Organization: Financial Management Association
Name: Best Paper in Futures or Options on Futures
Year Received: 1993

Organization: IU Kelley School of Business
Name: Schuyler F. Otteson Undergraduate Teaching Excellence Award, Finalist
Year Received: 1991

Organization: IBM
Name: IBM Thomas Watson National Merit Scholarship
Year Received: 1981

Organization: Indiana Univeristy
Name: Indiana University Distinguished Scholarship
Year Received: 1981

Education
Institution: Indiana University
Location: Bloomington, Indiana
Major: Finance
Dissertation: Large Shareholders in the Market for Corporate Control
Completed: 1992
Degree: Ph D

Institution: Indiana University
Location: Bloomington, Indiana
Major: Finance
Completed: 1989
Degree: MBA

Institution: Indiana University
Location: Bloomington, Indiana
Major: Finance (with Honors)
Dissertation: Honors Thesis:  An Analysis of Market Timing Strategies
Completed: 1985
Degree: BS

Published Contributions
Vinod Changarath, Michael Ferguson, Yong Kim,  (2017). Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations. Banking and Finance Review, 1-32.

Michael Ferguson, Doina Chichernea, Haimont Kassa,  (2015). Idiosyncratic Risk, Investor Base, and Returns. Financial Management, 267-293.

Michael Ferguson, Hui Guo, Haimont Kassa,  (2014). On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns. Journal of Financial and Quantitative Analysis, 271-295.

Michael Ferguson, Bradley Stevenson,  (2014). Depositor Discipline and the Bank's Incentive to Monitor. Journal of Financial Economic Policy, 98-111.

Michael Ferguson, Steven  Mann,  (2004). Execution Costs and Their Intraday Variation in Futures Markets. Derivatives Markets and Foreign Exchange Markets, Financial Markets (Volume 4), Jeff Madura (editor).

Michael Ferguson, Richard Shockley,  (2003). Equilibrium 'Anomalies'. Journal of Finance, 2549-2580.

Michael Ferguson, Steven  Mann,  (2001). Execution Costs and Their Intraday Variation in Futures Markets. Journal of Business, 125-160.

Michael Ferguson, Stephen Peters,  (2000). Is Lending Discrimination Always Costly?. Journal of Real Estate Finance and Economics, 23-44.

Michael Ferguson, Steven Mann, Leonard  Schneck,  (1998). Concentrated Trading in the Foreign Exchange Futures Markets:  Discretionary Liquidity Trading or Market Closure?. Journal of Futures Markets, 343-362.

Michael Ferguson, Stephen Peters,  (1997). Cultural Affinity and Lending Discrimination:  The Impact of Underwriting Errors and Crisk Distribution on Applicant Denial Rates. Discrimination in Financial Services, George J. Benston, W. Curt Huner, and George G. Kaufman (editors).

Michael Ferguson, Stephen Peters,  (1997). Cultural Affinity and Lending Discrimination:  The Impact of Underwriting Errors and Crisk Distribution on Applicant Denial Rates. Journal of Financial Services Research, 153-168.

Michael Ferguson, Stephen  Peters,  (1997). What Constitutes Evidence of Discrimination in Lending?. The Economics of Housing, John M. Quiqley (editor).

Michael Ferguson, Leonard Schneck, Steven Mann,  (1996). Depth and Tightness. Chicago Board of Trade Research Symposium Proceedings, 85-124.

Michael Ferguson, Corinne Bronfman,  (1995). Don't Ask, Don't Tell and Other Contracting Considerations. Journal of Corporation Law, 155-175.

Michael Ferguson, Stephen  Peters,  (1995). What Constitutes Evidence of Discrimination in Lending?. Journal of Finance, 739-748.

Michael Ferguson, Corinne Bronfman,  (1995). Would Greater Transparency Increase or Decrease Contracting Costs?. Journal of Financial Engineering, 127-145.

Michael Ferguson,  (1994). Ownership Structure, Potential Competition, and the Free Rider Problem in Tender Offers. Journal of Law, Economics and Organization, 35-62.

Michael Ferguson, Leonard Schneck,  (1993). The Flight to Quality:  Evidence from the Futures Markets. Review of Futures Markets, 103-132.

Michael Ferguson,  (1991). Study Guide for F301:  Introduction to Corporate Finance. Indiana University, .

Michael Ferguson,  (1990). Study Guide for F250:  Personal Finance. Indiana University, .

Research in progress
Title: Fan Loyalty and Team Performance
Status: Writing Results
Research Type: Scholarly

Title: Is Bank Capital a Double-Edged Sword? The Impact of Forced Recapitalizations
Status: Writing Results
Research Type: Scholarly

Title: The Impact of a Strategic Regulator on Executive Compensation and Fraudulent Misreporting
Description: The passage of Sarbanes-Oxley Act in 2002 reflects the regulator’s strategic response to an epidemic of corporate fraud in the late 1990s. Recognizing the dynamic interplay between the manager’s decision to commit fraud and the regulator’s decision to investigate the firm, we empirically investigate the shareholder-manager-regulator nexus that determines the equilibrium relationships between the degree of reliance on equity based compensation (EBC), the firm’s growth potential, the extent of fraudulent reporting, and the intensity of fraud detection. Using a sample of recently prosecuted fraud firms collected from SEC litigation releases of the last 10 years and employing the bivariate probit model with partial observability, we find that fraud has mainly been concentrated in high-growth ‘new economy’ industries and fraud has mainly been detected during the recent economic downturn in those industries. Furthermore, greater reliance on EBC increases both the probability of fraud being committed and the conditional probability of detecting fraud. More importantly, greater fraud penalties due to the enactment of SOX reduce both of the probabilities. Using panel regressions, we also find strong evidence that EBC is positively associated with growth potential and negatively associated with fraud penalty in the (relatively fraud-prevalent) high-tech industries, while no such associations exist in the (relatively fraud-free) manufacturing industries. Overall, our empirical results highlight the importance of treating the regulatory agency as a rational player in the fraud commission and detection game. The interaction between the firm manager and the regulator determines the two unobservable probabilities that determine the level of observed fraud. In turn, the firm’s shareholders (or board of directors) rationally incorporate the implied fraud commission and detection probabilities into the optimal equity-based compensation contract awarded to the manager.
Status: Writing Results
Research Type: Scholarly

Presentations
Title: Are Skewness Preferences Symmetric?  Evidence from Negative Idiosyncratic Shocks
Organization: Financial Management Association
Location: Sydney, Australia
Year: 2019

Title: What Drives the Instability of Book‑to‑Market Portfolios?
Organization: Southern Finance Association
Location: Orlando, FL
Year: 2019

Title: Bad News:  Market Underreaction to Negative Idiosyncratic Stock Returns
Organization: Financial Management Association
Location: New Orleans, LA
Year: 2019

Title: Dynamic Capital Structure, Asset Pricing Factors, and the CAPM
Organization: Eastern Finance Association
Location: Miami, FL
Year: 2019

Title: What Drives Merger and Bankruptcy Waves
Organization: Financial Management Association
Location: Boston, MA
Year: 2017

Title: Do Inventors Know More than Investors? Technology Spillover and the Valuation of Patents
Organization: Financial Management Association
Location: Nashville, TN
Year: 2014

Title: Do Inventors Know More than Investors? Technology Spillover and the Valuation of Innovation
Organization: Midwest Finance Association
Location: Orlando, FL
Year: 2014

Title: Do Inventors Know More than Investors? Technology Spillover and the Valuation of Innovation
Organization: Southern Finance Association
Location: Fajardo, PR
Year: 2013

Title: On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns
Organization: Eastern Finance Association
Location: Boston, MA
Year: 2012

Title: On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns
Organization: Southwest Finance Association
Location: New Orleans, LA
Year: 2012

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: Southern Economic Association
Location: Washington, DC
Year: 2011

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: Southern Finance Associatio
Location: Key West, FL
Year: 2011

Title: On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns
Organization: Financial Management Association
Location: Key West, FL
Year: 2011

Title: On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns
Location: Key West
Year: 2011

Title: On the Relation between EGARCH Idiosyncratic Volatility and Expected Stock Returns
Organization: Financial Management Association
Location: Denver, CO
Year: 2011

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: Financial Management Association
Location: Denver, CO
Year: 2011

Title: Does Equity-Based Compensation Really Have a ‘Dark Side’? The Influence of Regulatory Discretion
Organization: Singapore International Conference on Finance
Location: Singapore
Year: 2011

Title: Does Equity-Based Compensation Really Have a ‘Dark Side’? The Influence of Regulatory Discretion
Organization: China International Finance Conference
Location: Wuhan, China
Year: 2011

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: International Banking, Economics, and Finance Association
Location: San Diego, CA
Year: 2011

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: European Financial Management Association
Location: Porto, Portugal
Year: 2011

Title: Do Capital Standards Promote Bank Safety? Evidence from Involuntary Recapitalizations (Working paper, Apr 2011)
Organization: Korea Institute of Finance, Korea-America Economic Association and Korea-America Finance Association
Location: Seoul, Korea
Year: 2011

Title: Idiosyncratic Risk, Investor Base, and Returns
Organization: Midwest Finance Assocation
Location: Chicago, IL
Year: 2011

Title: Cross Market Liquidity Shocks:  Evidence from the CDS, Corporate Bond and Equity Markets
Organization: Financial Managment Association
Location: New York, NY
Year: 2010

Title: A New Methodology for Measuring and Using the Implied the Impied Market Value of Aggregate Corporate Debt in Asset Pricing:  Evidence from S&P 500 Index Put Option Prices
Organization: Financial Managment Association
Location: Reno, NV
Year: 2009

Title: Margin Requirements, Asset Pricing and Welfare Implications
Organization: Financial Managment Association
Location: Reno, NV
Year: 2009

Title: Deal Risk, Liquidity Risk, and the Profitability of Risk Arbitrage
Organization: Financial Management Association
Location: Reno, NV
Year: 2009

Title: Deal Risk, Liquidity Risk, and the Profitability of Risk Arbitrage
Organization: Eastern Finance Associatio
Location: Washington, DC
Year: 2009

Title: The Impact of a Strategic Regulator on Executive Compensation and Fraudulent Misreporting
Organization: Finance Management Association
Location: Dallas, Texas
Year: 2008

Title: Congress and the Stock Market
Organization: Financial Management Association
Location: Orlando, FL
Year: 2007

Title: What's Different About Banks? Depositor Discipline and Active Monitoring
Organization: Financial Management Association
Location: Orlando, FL
Year: 2007

Title: An In-Depth Analysis of Futures Market Liquidity
Year: 2003

Title: Equilibrium 'Anomalies'
Organization: University of Missouri
Year: 2002

Title: "Does Stock Market Momentum Explain the 'Smart Money' Effect?
Organization: Financial Management Association
Location: San Antonio, TX
Year: 2002

Title: Execution Costs and Their Intraday Variation in Futures Markets
Organization: Financial Management Association
Location: Orlando, FL
Year: 1999

Title: Equilibrium 'Anomalies'
Organization: Western Finance Association
Location: Santa Monica, CA
Year: 1999

Title: Equilibrium 'Anomalies'
Organization: University of Cincinnati
Year: 1999

Title: Equilibrium 'Anomalies'
Organization: Arizona State University - West
Year: 1999

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: Econometric Society
Location: New York, NY
Year: 1999

Title: Equilibrium 'Anomalies'
Organization: Southern Finance Association
Location: Marco Island, FL
Year: 1998

Organization: Financial Management Association
Location: Chicago, IL
Year: 1998

Title: Equilibrium 'Anomalies'
Organization: Financial Managent Association
Location: Chicago, IL
Year: 1998

Title: Equilibrium 'Anomalies'
Organization: Texas A&M University
Year: 1998

Title: Equilibrium 'Anomalies'
Organization: California State University - Fullerton
Year: 1998

Title: Equilibrium 'Anomalies'
Organization: University of Pittsburgh
Year: 1998

Title: Is Lending Discrimination Always Costly?
Location: Chicago, IL
Year: 1998

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: University of Cincinnati
Year: 1997

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: Indiana University Purdue University-Indianapolis
Year: 1997

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: University of Connecticut
Year: 1996

Title: A Symmetric-Information Model of Credit Rationing
Organization: European Finance Association
Location: Oslo, Norway
Year: 1996

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: Western Finance Association
Location: Sunriver, OR
Year: 1996

Title: Depth and Tightness
Organization: Chicago Board Of Trade
Location: Chicago, IL
Year: 1996

Title: Interbank Credit Market Heterogeneity and Lending Discrimination
Organization: Federal Reserve Bank of Chicago
Location: Chicago, IL
Year: 1996

Title: But I Know It When I See It:  An Economic Analysis of Vague Rules
Organization: Federal Reserve Bank of Chicago
Location: Chicago, IL
Year: 1996

Title: Depth and Tightness
Organization: American Finance Association
Location: San Francisco, CA
Year: 1996

Title: Depth and Tightness
Organization: Southern Finance Association
Location: Sarasota, FL
Year: 1995

Organization: Financial Management Association
Location: New York, NY
Year: 1995

Title: Loan Denial and Default Rates:  What Can TheyTell Us About Lending Discrimation
Organization: Eastern Finance Assocation
Location: Hilton Head, SC
Year: 1995

Title: Risk Arbitrageurs, Insider Trading, and the Allocation of Property Rights in Tender Offers
Organization: University of Arizona
Year: 1995

Title: Does Size Matter? Ownership Structure and the Division of Gains in Tender Offers
Organization: University of Arizona
Year: 1994

Title: Do Speculators Earn Positive Profits?
Organization: Financial Management Association
Location: St. Louis, MO
Year: 1994

Title: Does Size Matter? Ownership Structure and the Division of Gains in Tender Offers
Organization: Financial Management Association
Location: St. Louis, MO
Year: 1994

Title: Concentrated Trading in the Foreign Exchange Futures Markets:  Discretionary Liquidity Trading or Market Closure?
Organization: Financial Management Association
Location: Chicago, IL
Year: 1993

Title: Using the Capital Markets to Mitigate Moral Hazard:  The Case of Hedge Collateral Agreements
Organization: Financial Management Association
Location: Chicago, IL
Year: 1993

Title: Concentrated Trading in the Foreign Exchange Futures Markets:  Discretionary Liquidity Trading or Market Closure?
Organization: Indiana University
Location: Bloomington, Indiana
Year: 1993

Title: Concentrated Trading in the Foreign Exchange Futures Markets:  Discretionary Liquidity Trading or Market Closure?
Organization: Western Finance Association
Location: Whistler, British Columbia
Year: 1993

Title: Risk Arbitrageurs, Insider Trading, and the Allocation of Property Rights in Tender Offers
Organization: University of Arizona
Year: 1993

Organization: Utah Winter Finance Conference
Location: Park City, UT
Year: 1993

Title: Risk Arbitrageurs, Insider Trading, and the Allocation of Property Rights in Tender Offers
Organization: University of Tulsa
Year: 1992

Organization: Western Finance Association
Location: San Francisco, CA
Year: 1992

Title: The Flight to Quality:  Evidence from the Futures Markets
Organization: Chicago Board of Trade
Location: Chicago, IL
Year: 1992

Title: Ownership Struture, Potential Competition, and the Divisions of Gains in Tender Offers
Organization: Commodity Futures Trading Commission
Location: Washington, DC
Year: 1991

Title: Ownership Struture, Potential Competition, and the Divisions of Gains in Tender Offers
Organization: Concordia University
Location: Montreal
Year: 1991

Title: Ownership Struture, Potential Competition, and the Divisions of Gains in Tender Offers
Organization: Indiana University
Year: 1991