Finance PhD Student Sebastien Plant Earns Runner Up Spot in BlackRock Applied Research Award

This year, Sebastien Plant, a sixth-year Wharton PhD student in the Finance Department, was one of the top finalists for the BlackRock Award. The BlackRock Applied Research Award recognizes the top five job market papers submitted by PhD candidates on a practical topic pertaining to financial markets, economics, investment management, or risk management.

His paper, Should Corporate Bond Trading Be Centralized?, shows that centralizing the U.S. corporate bond market would yield large gains in efficiency. By studying two markets where corporate bonds are successfully traded on central limit order books, he estimated that the transaction costs of U.S. corporate bonds would decrease by 70 percent on average if trading migrated from over-the-counter markets to limit order markets.

To study the social value of reforming the corporate bond market, he built a parsimonious model of centralized and decentralized trading. Estimating the scaling factors revealed that a centralized market structure would be optimal for 91 percent of the bonds studied.

Finalists were selected by BlackRock’s Applied Research Award Committee, which consists of a panel of finance leaders from BlackRock and academia. The submitted papers were assessed on a number of criterion, including the demonstration of thought leadership, a focus on a practical problem of relevance, the use of advanced quantitative techniques, the analysis of an interesting new data set, and the offering of a practical solution.