Deep-Dive Research Spotlight: Professor Yelena Larkin
Finance researchers love to put financial frictions in the spotlight—credit constraints, cost of capital, just name it—and study how these affect corporate investment and production decisions. But let’s be honest: no company kicks things off by asking, “What is my debt-to-equity ratio going to be?” It all starts with an idea—a product or service designed to fill a gap in the product market. The finance questions come next.
Schulich’s Yelena Larkin, Associate Professor of Finance, tries to flip the usual finance research script in her research. She focuses on the product first: what the firm is building, how it creates value, and the nature of the market in which it operates . Yelena’s work explores how a company’s products, the increasingly intangible assets it relies on during the production process, and its competitive landscape shape its financial and investment decisions. In today’s economy—where brands, human capital, innovation, and sustainability are the true drivers of long-term value—finance cannot afford to ignore the product side of the story.
Broadly speaking, Yelena’s research agenda examines how product market structure and intangible capital shape corporate behavior—and what that means for the economy as a whole.
Strong Brands Help Companies Stay Financially Stable
Yelena began her academic journey by connecting the financial side of firm behaviour with what companies actually offer in the market—their products.
Her job market paper focused on brand perception—how customers feel about a company—and how that influences financial decision-making. What she found is that brand strength is not just a marketing buzzword; it has important financial consequences. Companies with strong, trusted brands are more likely to access credit, manage risk effectively, and navigate economic shocks with greater stability. Even though brands do not show up as traditional “assets” on the balance sheet, creditors clearly understand their value and are more willing to lend to firms with strong brand perception.
This work helped open the door to a broader realization that a company can borrow against intangibles. It paved the way for follow-up research showing that companies can also secure financing using assets like patents, trademarks, and strong online customer reviews. In today’s economy, where intangible capital plays a growing role, these findings are increasingly relevant for how we think about credit, risk, and firm value.
“The big tech firms had front-row seats long before Trump was sworn in”
What started with a simple stylized fact – Yelena & her co-authors discovering that the number of publicly traded firms in the U.S. dropped significantly – has turned into a project that has had the biggest impact in her academic career so far. They found that the shift toward industry giants calling the shots did not start overnight. Market concentration—the dominance of a few large firms—has evolved in the U.S. over the past couple of decades. Across a wide range of sectors—retail, airlines, healthcare, and more—industries have become increasingly concentrated, dominated by a smaller number of increasingly large players. And this is not just a “big tech” story, even though they tend to get the spotlight. In fact, product market concentration has increased in about 75% of industries over the past twenty years.
This shift toward higher concentration is strongly linked to rising profits and higher stock prices, but not necessarily to more innovation or investment. Instead, large firms are getting bigger and more profitable while often pulling back on R&D and capital spending. Over time, this can hurt consumers—by reducing choice, stalling innovation, and potentially raising prices—and workers, who may face fewer job opportunities and weaker bargaining power in less competitive labour markets.
What about Canada?
Yelena extended this research to Canada and found that similar patterns are beginning to emerge. The number of firms listed on the TSX has dropped significantly, and the ones that remain are generally older and larger. Combined with a noticeable decline in new business formation, it points to waning business dynamism in Canada as well.
This work has been recognized both academically and by policymakers. It was picked up by the U.S. Council of Economic Advisers, and Yelena received a thank-you letter from the Biden Administration for her contribution. The findings have been cited in a UN report, referenced by Competition Canada, and she has been invited to testify multiple times as an expert witness before the House of Commons Standing Committee on Industry, Science and Technology in Ottawa. She also participated in a roundtable at the Canada Competition Bureau to discuss updates to merger guidelines.
Practitioners have also found the research valuable. She has spoken at several antitrust panels hosted by Charles River Associates and The Council of Institutional Investors, and the research has been widely cited in the media, including The Wall Street Journal, Forbes, The New York Times, Financial Times, Bloomberg, The Globe and Mail, and others.
The People at the Top: Managerial Talent as Another Intangible Asset
Another project looks at how companies choose their CEOs—and whether they prioritize managerial talent when making that decision. Yelena’s co-author and she find that boards with insider directors – firm executives who sit on the board but are not the CEO – are significantly more likely to hire high-talent CEOs. These insider directors appear to focus less on or personal ties and more on selecting capable, well-qualified leaders.
This matters because CEO talent has a powerful ripple effect throughout a company. Strong CEOs make better investment decisions and build and retain high-performing teams—all of which drive long-term success.
From a policy perspective, this research suggests looking more carefully at how boards are structured. Insider directors are often seen as overly loyal employees just protecting their turf, but Yelena’s findings show they bring valuable knowledge and a strong sense of what the company truly needs. This helps to spot and prioritize managerial talent, making them effective gatekeepers in the CEO hiring process.
What’s Next?
Yelena’s newer research avenue digs deeper into innovation and intellectual property—especially how legal and financial systems shape who gets to innovate. In one project, coauthored with a Schulich former PhD student, she studies how the jurisdiction of patent cases affects firm behaviour. A 2017 Supreme Court ruling limited venue-shopping in patent litigation, so that firms ended up under either plaintiff- or defendant-friendly district courts. Those under “defendant-friendly jurisdictions” saw increases in firm value, R&D spending, and high-quality patents. Legal structure, in other words, directly affects innovation incentives.
In another project, funded by a 2024 SSHRC Insight Development Grant, Yelena looks at how financial distress affects Small and Medium-sized Enterprises (SMEs) and individual inventors in the secondary patent market. Using detailed patent assignment data merged with local housing and economic indicators, she hypothesizes that when inventors face personal wealth shocks, they are more likely to sell or abandon patents rather than commercialize them. This suggests local financial resilience plays a crucial role in innovation outcomes—and that many promising ideas may never reach the market due to financial constraints.
Yelena also puts these insights into practice at York. Through York’s Connected Minds program, she supports researchers to help turn their innovations into real-world ventures and commercialization. After all, the best ideas deserve more than just a place in an academic journal.
Tying It Together: Yelena’s Role with the Northern Finance Association
In addition to publishing academic research, Yelena Larkin actively takes on leadership roles within the finance research community. In 2023, she co-organized the Northern Finance Association (NFA) Annual Conference—Canada’s largest and most prestigious academic finance conference—alongside Finance Professor Lilian Ng, Scotiabank Chair in International Finance at Schulich. Held in downtown Toronto, it was the first full-scale return after COVID, with over 1,300 submissions and 132 high-quality papers selected. They welcomed researchers from around the world, and the keynote address was delivered by Professor Lauren Cohen of Harvard Business School. Yelena served as a Co-Vice President of the NFA Board at the time, and later, she also served as the President of the NFA to help shape Canada’s top finance research forum and strengthen its ties to the broader academic and policy communities.
She is proud to continue Schulich’s long-standing legacy of involvement with the NFA—following in the footsteps of Finance Professors Pauline Shum Nolan, Mark Kamstra, and the late Gordon Roberts. She believes supporting the NFA is not just about logistics or administration; it’s a way to promote the type of rigorous, policy-relevant, and forward-thinking finance research that is urgently needed today.
Looking ahead, Yelena will continue her research and practice that reflects the complexities of today’s economy, where value is increasingly intangible, competition is shifting, and innovation depends not only on good ideas but on the systems that support or suppress them.
