Yale School of Management

Heather E. Tookes

Professor of Finance

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By Karen Guzman

Early on, Heather Tookes was fascinated by economics. As a teenager contemplating college, she looked at schools with strong undergraduate teaching in the area, and by graduate school, she was comfortably ensconced in the world of industrial organization in the economics department at Cornell University. Then she made an unexpected detour.

“One of my advisors in economic theory was also doing a lot in finance, and I started talking to him about markets and information problems in financial markets, and he said, ‘I have someone I want you to meet,’” Tookes recalls.

That someone was Maureen O’Hara, the Robert W. Purcell Professor of Finance at Cornell’s Johnson Graduate School of Management. “She’s a top researcher in an area called ‘market microstructure,’” Tookes says. “I started working with her, and thinking about problems that felt so connected to the real-world. Being able to apply my work in that way was exciting.”

Tookes packed up her office. “I crossed the street from the economics department over to the business school in Ithaca during my third year in graduate school,” she says. “I should have been studying finance all along. All my economics projects had a finance flavor. You figure it out sooner or later.”

A dissertation on topics related to insider trading followed. Then Tookes followed her passion for the intersection of economics and financial markets to a professorship at the Yale School of Management. Today, she is a professor of finance.

“There were lots of things about SOM that attracted me,” she says. “It’s a small place, and the environment is collegial. It’s also an intellectually open place. The disciplinary areas are a bit blurred. As someone who had moved from one discipline to another, and who was interested in applying my research in other areas, it seemed like the right place.”

Sixteen years later, Tookes says that Yale SOM is still the right place.

At Yale SOM, Tookes has pursued her own main areas of research: market microstructure, which addresses how securities markets can be structured so that prices are set efficiently, and corporate finance, where she explores questions about how firms make financial decisions.

“A lot of my work tries to bring together the financial markets, the market microstructure side, and the corporate finance side,” she says. In particular, Tookes examines how the structure of the financial markets impacts the way firms raise money.

She collaborates with fellow faculty members, and has coauthored a number of papers with Matthew Spiegel, professor of finance.

“A lot of our work together deals with this idea of—going back to my roots in industrial organization—how competitive product market structure impacts the values of firms, and how financing decisions of firms and markets is related to the structure of product markets,” Tookes explains.

She also collaborates globally. “A favorite model is where you have a paper that’s always being worked on, because you have a coauthor in Asia,” she says. “You go to bed, and the coauthor continues to work. It feels very productive, but there’s still no substitute for walking down the hall and seeing the person you’re working with.”

Tookes teaches the popular elective course Corporate Finance. “It’s one of those electives that a pretty significant portion of the student population takes,” she says. “It’s certainly relevant to someone who wants to go into banking, but it’s also useful for people in various functions on the corporate side.”

She teaches the course to full-time MBA students, executive MBA students, and for the first time this year, students in the Master’s Degree in Global Business and Society program. “I tailor the class to meet the needs of the different audiences,” she says. “There is a big set of topics, so you never get bored. It’s been a lot of fun.”

The course also attracts students from other Yale schools, including the law school. “Lawyers have to talk to bankers and think about things in corporate finance,” Tookes explains. “I try to convey a basic framework to address a menu of questions and to meet the students where they are.”

Tookes calls her diverse students inspiring. “They care so much about the mission of the school”—educating leaders for business and society—“and that comes out in lots of different ways, whether it’s class discussions about corporate investment, sustainability, or corporate governance issues,” she says.

Her students are also very international. “It’s really fun for me because I teach tools, but my students can bring institutional details from their home countries that I’m not always aware of,” Tookes says.

Recently, she remembers, a student from India shared some information about regulations regarding allocations to responsible corporate investments.

“I’ve done a lot of work on stock markets in India, but mostly related to rules regarding how much you can borrow to trade stocks and the impact on stock liquidity,” Tookes says. “This student had worked in an area I study, and she taught me something new. When you can share like that, it’s pretty special.”

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