Michael Ehrlich

Associate Professor of Finance and Co-Director of NJ Innovation Acceleration Center

Newark NJ UNITED STATES
Martin Tuchman School of Management

Professor Ehrlich's research focuses on financial markets and institutions, with an emphasis on market failures

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Spotlight

May 31, 2022

1 min

Dissecting market failures: from root to fallout

From mining coal to mining Bitcoin, a market is always prone to collapse, triggering all types of questions, including:What were the warning signs?How will you know when it has hit bottom?At what point will investors look to capitalize?Is a subsequent upswing temporary or sustainable long-term?NJIT’s Michael Ehrlich speaks authoritatively on market failures, as director of the university’s Henry J. and Erna D. Leir Research Institute for Business, Technology and Society. He also brings real-world expertise, having run his own business and managed units of Salomon Brothers and Bear Stearns.Moreover, Ehrlich excels at explaining the most complex financial issues in plain English. To interview him, simply click on the button below.Michael's Profile

Feb 25, 2020

2 min

The coronavirus will impact these three things in a major way

The coronavirus has already sent ripple effects through the global economy, according to Michael Ehrlich, professor of finance at New Jersey Institute of Technology. Reports of Wall Street reacting, automakers scrambling to avoid major disruptions and the Mobile World Congress cancellation has demonstrated the effects of COVID-19.According to Ehrlich, some of the biggest indirect impacts of the virus will be felt in tourism and travel, supply chain disruption and the flight to quality.Airlines have begun to cut routes to destinations with high risk, and tourism in major European countries have forecasted a decline, as much as 30-40% in France according to a report in Forbes."We're already seeing people decide to not go on cruise ships or not to travel on airplanes because of the coronavirus," said Ehrlich.Supply chains are being met with challenges due to China's factory shutdowns."The real impact of where it's going to affect the economy is supply chain. China is the factory of the world, and those factories are being shut down in order to contain the virus and slow down the transmission of the virus," said Ehrlich.Finally, the third impact is a phenomenon called flight to quality. This is when investors move capital from risky investments to safer ones, a reaction when there is uncertainty in international markets. The move, according to Ehrlich, can see investors take up more U.S. stocks, bonds, and dollars that are viewed as more stable long term investments.The downstream effect could lead to a boost in the U.S. economy as it allows national manufacturing sectors to better compete in a marketplace where they are in higher demand.Michael Ehrlich is an expert on financial markets and institutions, with an emphasis on market failures. Simply click on the button below to arrange an interview. Michael's Profile

May 31, 2022

2 min

Housing bubbles, student debt, stagnant salaries – America need a reset?

There’s an old saying we all know about those who don’t pay attention to history … they’re doomed to repeat it. Over and over and over sometimes.One would think after the 2008 housing crisis that nearly decimated the American and global economy – that we’d all be somewhat wiser. According to some, that may not be the case.America is once again approaching the same cliff it took a decade to climb up from. The measures that were put in place to prevent massive amounts of foreclosures a decade ago are now coming home to roost.“This massive problem of underwater homeowners could not be resolved only by shutting off the spigot of foreclosures. That is why a total of 25 million permanent mortgage modifications and other so-called 'workout plans' were put in place from 2008 until June 2018 according to data provider Hope Now. Modifying mortgages as an alternative to foreclosure just kicked the can down the road. It succeeded in bringing these delinquent homeowners into current status. Yet millions of them are re-defaulting on these modified mortgages. The number of re-defaults is increasing relentlessly around the U.S. Worse yet, many re-defaulters are on their secondor third mortgage modification.” MarketWatchMortgages once again are vulnerable as the housing market remains painfully out of sync with the rest of the economy. As well, with millennials facing massive student debt, a shortage of new builds means fewer people can enter the market nor can they afford to. Combine that with salaries flatlining and not keeping pace with the rising price of goods – it’s not a sunny forecast.Are you covering this potential financial crisis?What will America have to do to course correct and ensure we don’t have a repeat of the 2008 meltdown?And how did the country’s leaders allow this to happen? Did no one see this coming?There are a lot of questions and that’s where an expert from New Jersey Institute of Technology can help.Professor Michael Ehrlich's research focuses on financial markets and institutions, with an emphasis on market failures. He has written about the unintended consequences of financial market innovation and is Associate Director of the Leir Center for Financial Bubble Research. To reach Michael, simply click on the button below.Michael's Profile

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Biography

Professor Ehrlich's research focuses on financial markets and institutions, with an emphasis on market failures. He has written about the unintended consequences of financial market innovation and is Associate Director of the Leir Center for Financial Bubble Research. Recently he has focused on the challenges of innovation, entrepreneurship, and commercializing new technology with emphasis on developing inclusive entrepreneurship.

Recently, Ehrlich has presented impacts of the economic effects of the coronavirus, which include tourism and travel, supply chain disruptions, and the "flight to quality."

Areas of Expertise

Innovation

Commercialization of Innovation

Market Failures

Financial Crises

Financial Markets

Finance

Financial Institutions

Financial Market Innovations

Entrepeneurship

Small Business Development

Accomplishments

Business Process Analyst Mastery Award for Educators

2017-10-01

Proven expertise to identify key performance indicators (KPI) and apply business process and change management concepts to help achieve objectives, using IBM Blueworks. He has demonstrated advanced proficiency on topics such as process analysis and improvement, BPMN, change management, priority matrix, upstream & downstream impacts, and KPIs.

Established and Co-Direct the New Jersey Innovation Acceleration Center

Established center whose mission is to help commercialize new technology and to help companies to speed their time to market and revenue metrics. U.S. EDA grant funded activities include education of North Jersey based entrepreneurs.

Education

Princeton University

PhD

Economics

1986

Yale University

Economics

1981

Media Appearances

Banks fail, but NJ hiring spree continues. How does this make sense? 5 things to learn

The Record online

2023-03-14

New Jersey's economy added nearly 130,000 jobs in 2022, and its labor market got off to a roaring start in 2023 in a sign that employers are continuing to hire with abandon to try to meet their customers' demand.

Research Grants

I-Corps

National Science Foundation

2015-03-11

The National Science Foundation (NSF) I-Corps program prepares scientists and engineers to extend their focus beyond the university laboratory and accelerates the economic and societal benefits of NSF-funded, basic-research projects that are ready to move toward commercialization.

Through I-Corps, NSF grantees learn to identify valuable product opportunities that can emerge from academic research, and gain skills in entrepreneurship through training in customer discovery and guidance from established entrepreneurs.

Articles

Protecting your firm from FX risk

Journal of Corporate Accounting & Finance

Michael Ehrlich, Asokan Anandarajan

2018

Recent oil‐price hikes are hurting U.S. businesses. But Europe seems protected—perhaps by the rising value of the euro against the U.S. dollar. So U.S.‐based managers need to compensate for the falling value of the dollar when planning their business strategies.

How can U.S. managers protect their companies from rising foreign exchange (FX) risks? The authors offer some vital tools and strategies—and discuss what perils the future may hold.

Does High-tech Business Incubation/acceleration Work? A Cluster Development Approach

Frontiers of Entrepreneurship Research

Michael Ehrlich, Annaleena Parhankangas

2016

The rapid introduction of technological innovations since the 1980’s has fostered the shared perception among policy makers, practitioners, and academics that high-tech innovations generate wealth and employment. The desire to increase the population of small high-tech firms has attracted substantial private and public funding of incubators, accelerators, science parks, and co-working spaces. The National Business Incubation Association (NBIA) reports that in 2012 there were over 1250 incubators in the U.S., up from only 12 in 1980 and internationally, thousands more incubation initiatives have recently been established in Europe and Asia.

Yet these institutions remain little understood, without an agreed underlying theoretical framework or established metrics for evaluation. We utilize a novel theoretical framework, adapted from cluster theory, to establish sound metrics for evaluation of incubation/acceleration institutions. We undertake an empirical incubator evaluation using a new dataset as a model for systematic incubator evaluation.

This paper develops and tests a set of hypotheses on how high-tech firms benefit from participation in a business incubator. First, building on cluster development theory, which focuses on a geographically proximate group of interconnected companies linked by externalities of various types, we expect incubator participants to demonstrate enhanced employment growth and innovation metrics. Second, we develop the concept of a networked incubator, which fosters territorial synergy, relational symbiosis, and economies of scope, based on network theory and social capital theory, to explain the link between employment/innovation performance and human/network capital measures.

How entrepreneurs seduce business angels: An impression management approach

Journal of Business Venturing

Annaleena Parhankangas, Michael Ehrlich

2014

This paper develops and tests a set of hypotheses concerning how impression management strategies deployed by entrepreneurs affect their likelihood to secure funding. We test our propositions on a sample of nascent ventures seeking business angel funding in the New York metropolitan area. Our results suggest that business angels prefer investment proposals characterized by the moderate use of positive language, moderate levels of promotion of innovation, supplication and blasting of competition, and high levels of opinion conformity.

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