In recognition for a lifetime achievement in financial economics research, Harvard Business School Professor Michael C. Jensen was presented the Morgan Stanley-American Finance Association Award for Excellence in Financial Economics last month.
Jensen, the second recipient of the award since its creation in 2008, will donate the $200,000 cash grant to HBS, the National Bureau of Economic Research, and the Simon Graduate School of Business at the University of Rochester, where he was a faculty member from 1967 to 1988.
The award's recipient is determined by a committee of five members of the American Finance Association, an organization that seeks to promote education and research in the field of financial economics, according to Executive Secretary and Treasurer David H. Pyle. The winner's research must have pioneered into new areas of inquiry and made a sustained and broad impact.
“Jensen is one of the most acknowledged and most important financial economists in the past 30 or 40 years, which you can determine objectively simply by the number of his citations," said HBS Professor of Economics Jeremy C. Stein, who chaired the AFA selection committee.
Jensen—who was a member of the faculty at HBS from 1985 to 2000—has authored more than 100 scientific papers, and written, co-written, or edited five different books. In 1973, Jensen co-founded the Journal of Financial Economics, and in 1994, he co-founded and eventually came to chair Social Science Electronic Publishing, Inc.
Jensen is particularly notable as one of the early developers of agency theory, which analyzes the incentive problems between corporate members and the shareholders of an organization, according to Stein.
Jensen, who could not be reached for comment, will donate $150,000 to the National Bureau of Economic Research, and $25,000 each to HBS and the Simon School of Business.
In accordance with AFA's current agreement with Morgan Stanley, the Morgan Stanley-American Finance Association Award will be given a total of five times.