Marie Sushka's research legacy across banking, governance and private equity

Across half a century, Marie Sushka moved from the Bank War and the antebellum money market to bank relationships, ownership concentration, asset sales, private equity and board structure, carrying the same empirical discipline from one field to the next. The scholar kept asking whether financial arrangements create value, shift power, or simply redistribute gains. It’s a question colleagues and researchers in finance continue to ask and read that body of work for inspiration.

At a recent commemoration of her work, Sushka's husband and longtime coauthor Myron Slovin shared with Dare insights into her unique career. He began with her early work in economic history. Sushka's dissertation studied banking in the United States in the early nineteenth century with what Slovin described as modern econometric methods. Historians had argued over the consequences of the Bank War, but, as he put it, "Marie actually built the model." She went to the Library of Congress, assembled the data and used it to test the economic consequences of the failure to recharter the Second Bank of the United States.

Her early publications, "The Antebellum Money Market and the Economic Impact of the Bank War" (Journal of Economic History, 1976) and the dissertation volume "An Economic Model of the Money Market in the United States, 1823-1859," established a pattern that never really disappeared: an institutional question, a model tight enough to discipline it, and data gathered or organized closely enough to make the argument bite.

From the Bank War to bank durability

For Slovin, the importance of that work was not only historical. Years later, he said shortly after the March 26 launch of the HEC Sushka Chair held by Jessica Jeffers, Sushka carried the same intuition into modern banking. "There was a link between her original work done in economic history to her ultimately most important paper," he said, referring to "The Value of Bank Durability: Borrowers as Bank Stakeholders" (Journal of Finance, 1993). 

The paper examines firms connected to Continental Illinois during the bank's distress and rescue and showed that threats to a bank's durability damaged client firms while rescue helped them. That, Slovin said, was the point Sushka had already seen: "Bank relationships are extremely valuable." He added that the 2008 Lehmann collapse would later show how costly it can be when those relationships are impaired.

That banking agenda did not end there. In "An Analysis of Contagion and Competitive Effects at Commercial Banks" (Journal of Financial Economics, 1999), Sushka and her coauthors examined whether trouble at one bank created externalities for others. 

Together, the two papers show the range of her banking research: from the value embedded in a particular relationship to broader effects across the industry. But in Slovin's telling, the deeper point is the continuity of the question. She saw that early American banking and modern finance held the same institutional frictions which could travel.

Moving from banking to private equity and governance

That habit of transfer helps explain why her work gradually moved into corporate finance, especially private equity. The duo came to see private equity as, in some respects, "a little bit like a bank." They started from skepticism, Slovin recalled. "We both started off ... somewhat antagonistic to private equity.” But the papers repeatedly pushed them in another direction. "Each time we would do a paper questioning the efficiency of private equity, our results consistently came, said, well, you know, private equity contributes to economic value, and here's how."

That line runs through a series of papers on going-private transactions, corporate control and asset sales. In "The Intra-Industry Effects of Going-Private Transactions" (Journal of Finance, 1991), Sushka and her coauthors showed that bids to take firms private generated positive valuation effects for industry rivals. In "Ownership Concentration, Corporate Control Activity, and Firm Value: Evidence from the Death of Inside Blockholders" (Journal of Finance, 1993), Slovin and Sushka used an exogenous shock - the death of an inside blockholder - to study how ownership concentration affects value and control. In "Methods of Payment in Asset Sales: Contracting with Equity versus Cash" (Journal of Finance, 2005), they found larger combined wealth gains when buyer equity, rather than cash, was used to purchase operating assets.

Each of those papers is different in subject. What links them is the refusal to treat corporate structure as a slogan. The question is always whether a particular arrangement is efficient, value-enhancing, or merely redistributive.

Slovin's own account of Sushka's temperament helps explain that range. "Marie got bored more quickly than I did," he said with a laugh. "She would say: ‘I want to do something different. And so we did." He admitted that he was slower to leave a familiar literature, but he repeatedly came to see "the benefit of transferring some of (their) knowledge from another field into a new field." In that sense, the movement across banking, private equity, governance and restructuring was a way of testing whether a strong question held up in more than one domain.

A collaborative method

In his field of study, finance professor Stefano Lovo encountered that research style directly. He collaborated with both researchers and remembered Sushka's starting point as deceptively simple: identify "the fundamental key question" and then find "the best way to test empirically." For Lovo, that combination of topic choice and empirical discipline was decisive. He called her "absolutely rigorous" and "very attentive" in the writing.

The finance professor also remembered a collaborative dynamic that worked because it combined different strengths. In his own words, he was "more the theorist in trying to build a model," while Sushka kept the work anchored in the question, the empirical test and the writing.

That collaboration left a mark on the department and on the papers. With Ulrich Hege, Lovo, Slovin and Sushka published "Equity and Cash in Intercorporate Asset Sales: Theory and Evidence" (Review of Financial Studies, 2009), which developed a two-sided asymmetric-information model of asset sales and showed larger gains for equity-based deals. Later, the same research line extended to "Divisional Buyouts by Private Equity and the Market for Divested Assets" (Journal of Corporate Finance, 2018), which studied private equity in corporate asset sales, and to "A Contracting Model of Entire Fairness: An Analysis of Divestitures of Parent-Held Control Blocks" (Journal of Law, Finance and Accounting, 2021).

Lovo's also pointed to Sushka’s ability to make rigorous debate feel constructive. For younger colleagues, he said, conversations after seminars were "critical, but at the same time, constructive."

What continues with Jessica Jeffers

Sushka's governance work also extended into the French context. In "Freedom of Choice Between Unitary and Two-Tier Boards: An Empirical Analysis" (Journal of Financial Economics, 2014), she and her coauthors examined how firms in France choose between unitary and two-tier boards. This is the same willingness to move from broad theory to institutional detail that Slovin described in her early banking work. Rather than talk about governance at the level of abstraction alone, the American academic kept asking what actual legal or organizational forms do, who chooses them, and what the evidence says about those choices.

That is one reason Jessica Jeffers, the inaugural chairholder, sees the chair as more than an honorific. "What's incredible about this chair is that Marie actually worked on some of the same topics that I work on," Jeffers confided after the chair launch. She pointed to empirical corporate finance, governance, private equity transactions, and work that speaks both to top finance journals and to empirical legal journals. Jeffers said that overlap makes the chair "inspiring" because it connects her own agenda to a research path already laid down.

Jeffers did not know Sushka personally, having arrived at HEC in 2022 - shortly after Marie and Myron had retired. But she insisted on a feeling of indebtedness to her research approach. Her recently accepted research paper in Journal of Political Economy will be the first publication under the affiliation "Jessica Jeffers, the Marie Sushka Chair at HEC Paris". It studies "common leadership" - cases where firms share executives or board directors - and, Jeffers said, it shows that these overlaps are a strong predictor of collusive agreements between firms. Jeffers made the connection between Sushka and her own approach explicit when she said the paper sits "squarely in the study of how boards function, how governance functions, that Marie also studied." In that sense, the chair's significance lies in continuity.

What remains of Marie Sushka’s legacy is a picture of a scholar whose contribution is easiest to see across papers. In banking, Sushka helped show the value of relationships and the costs of damaging them. In corporate finance, she returned repeatedly to the valuation consequences of restructuring choices. In governance, she examined ownership concentration, legal form and board structure without losing sight of evidence. In this way, she kept carrying a demanding empirical standard from one field to the next.

Selected papers discussed

• "The Antebellum Money Market and the Economic Impact of the Bank War" (Journal of Economic History, 1976)
• "The Value of Bank Durability: Borrowers as Bank Stakeholders" (Journal of Finance, 1993)
• "An Analysis of Contagion and Competitive Effects at Commercial Banks" (Journal of Financial Economics, 1999)
• "Ownership Concentration, Corporate Control Activity, and Firm Value: Evidence from the Death of Inside Blockholders" (Journal of Finance, 1993)
• "Methods of Payment in Asset Sales: Contracting with Equity versus Cash" (Journal of Finance, 2005)
• "Equity and Cash in Intercorporate Asset Sales: Theory and Evidence" (Review of Financial Studies, 2009)
• "Freedom of Choice Between Unitary and Two-Tier Boards: An Empirical Analysis" (Journal of Financial Economics, 2014)
• "Divisional Buyouts by Private Equity and the Market for Divested Assets" (Journal of Corporate Finance, 2018)