Journal Of Finance Research Articles

Corporate Investment Decision: A Review of Literature

This study is an attempt to review relevant literature on the theme of corporate real investment decisions. We have conducted a comprehensive survey of literature on the studies published in well-reputed journals of finance, i.e., The Journal of Finance, The Review of Financial Studies, and The Journal of Financial Economics, during the years 2010 to 2022. The theoretical analysis reveals that information asymmetry, cash holdings, policy uncertainty, idiosyncratic risk, governance quality, financing diversification, financial development, managerial network, investor protection, tax policy, etc., are prominent factors influencing investment decisions. The current review analysis is useful and has certain policy implications for investment managers regarding investment decisions. It guides on the factors that can impede or boost investment volume. Our study has a novel contribution to the literature by summarizing the voluminous empirical literature arranged on physical investment decisions.

The Real Estate Academic Leadership (REAL) Rankings for 2018–2022

This is the eighth release of the Real Estate Academic Leadership (REAL) rankings for authors and institutions. Similar to the previous seven releases, the rankings reflect articles contained in the top three real estate journals (The Journal of Real Estate Finance and Economics, The Journal of Real Estate Research, and Real Estate Economics) based on multiple indices. Unlike trends from the previous rankings, minor changes regarding academic institutions reflected one of two scenarios: faculty retirements and/or deaths; and faculty and recent PhD graduates transitioning to positions in industry rather than academia. Larger changes in the rankings related to academic institutions continue to reflect movement of productive research faculty from one university to another university.

Bibliometric Analysis of Green Finance and Climate Change in Post-Paris Agreement Era

Climate change is undeniably one of the long-term challenges confronting humanity across the globe. Various nations have taken initiatives that help reduce greenhouse gas emissions to the environment as well as accelerate financial flows to clean and sustainable projects. The paper provides an overview of green finance after the Paris Agreement by adopting a bibliometric analysis of the selected literature. The study reviewed the literature from the Web of Science database between 2015 and 2022. Data cleaning, formatting, and analysis was performed using VOSviewer and R-studio. Our study indicates increased scholarly interest on the issue of green financing. Most scientific research has been published in climate policy and sustainability journals but lacks mainstream interest in economic and finance journals. Based on our results, it is recommended that further studies on green financing be carried out from the economic and financial perspective using quantitative approaches to supplement the existing literature and provide a wider view to policy makers and regulators.

A simple European option pricing formula with a skew Brownian motion

Zhu and He [(2018). A new closed-form formula for pricing European options under a skew Brownian motion. The European Journal of Finance 24(12): 1063–1074] provided an innovative closed-form solution by replacing the standard Brownian motion in the Black–Scholes framework using a particular skew Brownian motion. Their formula involves numerically integrating the product of the Guassian density and corresponding distribution function. Being different from their pricing formula, we derive a much simpler formula that only involves the Gaussian distribution function and Owen's $T$ function.

Corporate Political Connections: A Multidisciplinary Review

Corporate political connections (CPCs)—ties that firms forge with political actors—directly affect firms, political actors, and various stakeholders in societies. This topic has been studied extensively in multiple disciplines, including management, economics and finance, political science, and sociology. However, this body of research remains rather fragmented within the confines of each discipline or field, and synergies in theoretical and empirical domains remain underexploited. Differences between CPCs and other forms of corporate political activities are also often unclear. This article develops a focused, comprehensive, and theoretically deep review of the rapidly growing but disparate literature on CPCs in multiple disciplines and fields and distinguishes, compares, and connects multiple, heterogeneous theoretical perspectives that have been adopted in these different literatures. By conducting an extensive literature search of the articles published between 1990 and 2020 in 24 leading peer-reviewed journals in management, economics and finance, political science, and sociology, we build our review framework by organizing the reviewed articles into three groups of topics based on their logical connections: the conceptualization of CPCs, the antecedents of CPCs, and the outcomes of CPCs. Within each group, we distinguish two primary angles—the firm and the political actor—that correspond to the two entities joined by CPCs. On the basis of this framework, we identify major gaps and suggest avenues for future research. Our review works together with a companion review on corporate political activity, published in this same issue, to offer a wholistic perspective on the boundary between corporations and political actors.

Preface

The purpose of this paper which serves as an introduction to the special edition of the quarterly of “Finanse i Prawo finansowe. Journal of Finance and Financial Law” under the title of Current Challenges for National Tax Policies and International Tax Coordination – Selected Issues from the Polish, Spanish and International Perspectives, is to outline major issues and challenges in shaping national and international tax policies. The research hypothesis is that, to a large extent, the economic consequences of the COVID-19 pandemic, but also the changing economic reality associated with the progressive internationalization and digitalization of business activity, pose numerous and significant challenges in the field of shaping tax policies, both at the national and international level. The research was carried out using a dogmatic-legal and legal-comparative method, taking into account the provisions of law, the body of literature as well as some economic data. The result of the research is to establish a starting point for further analysis of selected topics that reflect the major current challenges for national tax policies and international tax coordination. They include the question of legitimacy of taxes, the issues of correct realisation of the fiscal function of taxes while at the same time implementing the basic tax principles, the matter of tax compliance and the question of tax policy-shaping within the framework of the democratic law-governed state. Those issues presented from the Polish and Spanish perspectives, hopefully may provide an interesting contribution and make a valuable input to further discussions on the issue of shaping tax policies, both at the national and international levels.

A bibliometric analysis of cultural finance

We present a systematic review of research conducted on culture in finance journals, accompanied by bibliometric summary analysis. We summarize publication and citation trends, as well as identify the most prolific and impactful contributors. We discover several major themes of cultural finance research: (i) governance, (ii) culture and financial decision making, (iii) culture and investing, (iv) social trust and firm governance, (v) religion and religiosity, and (vi) cultural distance and finance. We also identify current themes relating to individualism and risk taking, regulations, religiosity and venture capital, and organizational legitimacy. We use our summary of thematic development to suggest future research directions.

Analysts' knowledge structure and performance

AbstractThis article examines the effect of financial analysts' knowledge structure on their forecast performance based on manually collected data of 1590 sell‐side financial analysts' educational background. The longer the period of higher education in one major, the profounder the knowledge in a specific area (Ng & Feldman, Personnel Psychology, 62, 2009, 89), and the less likely it is grasped by self‐education outside university. Thus, we argue that analysts who study the same (different) major in undergraduate and postgraduate periods have deeper (wider) knowledge and better (poorer) understanding to a major‐related industry (Brown et al., Journal of Accounting Research, 53, 2015, 1). Our results show that financial analysts with deeper knowledge tend to release more accurate earnings forecasts and their earnings revisions evoke larger market reactions. The forecast advantage of analysts with deeper knowledge is more pronounced when firms' business is more concentrated or more relevant to analysts' knowledge. We conclude that the knowledge structure cultivated by higher education can partially explain analysts' job performance and deeper knowledge can bring better industry understanding besides work experience (Bradley et al., The Journal of Finance, 72, 2017, 751).

International journal of finance and economics: A bibliometric overview

AbstractThe International Journal of Finance & Economics (IJFE) contributed substantially to its research domain between 1996 and 2021. We conduct a comprehensive bibliometric study to examine IJFE's evolution. We use various science mapping approaches to study its performance, intellectual structure, and determinants of academic influence. IJFE's contributions and impact have grown markedly. Authors affiliated with the United Kingdom and the United States are its most frequent contributors. Authors linked with the International Monetary Fund and the City, University of London top the journal's list of contributors. The keyword ‘exchange rate/real exchange rate’ is the most frequently used in IJFE articles, followed by ‘economic growth.’ IJFE's knowledge structure consists of eight themes: (1) exchange rate mechanism, currency crisis, and capital flows, (2) stock market volatility, (3) effects of credit rating on international financial markets, (4) exchange rate volatility and market efficiency, (5) banking sector efficiency, (6) linkage between financial development and economic growth, (7) technical analysis in the foreign exchange market and R&D investment, and (8) stock markets and environmental sustainability. Using regression analysis, we find five factors positively associated with IJFE citations: lead article in an issue, number of authors, article age, number of tables, and number of references.

Trends in Multidiscipline Management Research: Past, Present and Future of FIIB Business Review

This study aims to guide scholars on emerging research themes and publication trends by reviewing the published intellectual contributions in the FIIB Business Review (FBR)—a multidisciplined management journal since its inception. FBR has been indexed in Scopus and Academic journal guide (AJG) and continues to achieve new heights. This article has used bibliometric analysis of the leading publication themes of the journal between 2011 and 2022. This work uses the Scopus database to find the publication trend and most impactful papers, main themes and keywords of publication, futuristic themes and target ideas for FBR. In 2021, the average citation value for three years was 2.292 compared to 0.778 in 2020. Journal of Business Research, Journal of Marketing and Journal of Finance are the top three most cited journals in FBR. The journal has shown usefulness for scholars mainly related but not limited to strategic management, marketing, organizational behaviour and finance, among others, by contributing to areas like digital transformation, team problems, organizational conflicts, COVID-19 problems, sustainability and financial crises. Areas of future research and limitations are discussed.

Milton Friedman and the Road to Monetarism: A Review Essay

Milton Friedman and the Road to Monetarism: A Review Essay

Developing a Regime-Switching Present Value Model: Switching Fundamentals and Bubbles

We develop a present-value model where the fundamental and non-fundamental components switch between distinct regimes. The non-fundamental component is specified as a periodically collapsing bubble of Balke and Wohar [Balke, N. S., & Wohar, M. E. (2009). Market fundamentals versus rational bubbles in stock prices: A Bayesian perspective. Journal of Applied Econometrics, 24(1), 35–75. https://doi.org/10.1002/jae.1025]. The fundamental component is constructed as in van Binsbergen and Koijen [van Binsbergen, J. H., & Koijen, R. S. J. (2010). Predictive regressions: A present-value approach. The Journal of Finance, 65(4), 1439–1471. https://doi.org/10.1111/j.1540-6261.2010.01575.x], by treating the expectations of market fundamentals as latent variables. Unlike existing methods, e.g. [Zhu, X. (2015). Tug-of-war: Time-varying predictability of stock returns and dividend growth. Review of Finance, 19(6), 2317–2358. https://doi.org/10.1093/rof/rfu047; Choi, K. H., Kim, C., & Park, C. (2017). Regime shifts in price-dividend ratios and expected stock returns: A present-value approach. Journal of Money, Credit and Banking, 49(2–3), 417–441. https://doi.org/10.1111/jmcb.12384; Chan, J. C., & Santi, C. (2021). Speculative bubbles in present-value models: A Bayesian Markov-switching state space approach. Journal of Economic Dynamics and Control, 127, 1–26], ours requires no unnecessary approximations, accommodates flexible forms of regime-switching, and the resulting present-value formula is internally consistent.

Systemically Important Bank: A Bibliometric Analysis for the Period of 2002 to 2022

This paper aims to analyzes the English-language literature related to Systemically Important Banks (SIBs) by applying the bibliometric methodology to present the current state of SIBs’ intellectual structure and emerging trends from a large quantity of data for the period 2002 to first 2 months of 2022 from Scopus, which is which is considered the most widely used database. SIBs are large and powerful, their contribution to economic growth is significant but their failure is usually systematic and contagious. Regulators subsidize them with public money to avoid systematic financial crises. It is striking that smaller banks do not receive the same treatment, which places them under competitive disadvantage. The bibliometric methodology helps in focusing on this issue for being a rigorous way for exploring and evaluating large volumes of data, identifying gaps, deriving unique research ideas, and resulting in a significant research impact. Therefore, we apply the bibliometric analysis to describe the field’s evolution and structure, including co-authorship, bibliographical coupling, and co-citation. The findings reveal that, the USA is the most relevant country, the University of Southeast is the most relevant institution, and the Journal of Banking and Finance is the most relevant journal. We contribute to the literature mainly by: (1) identifying the benchmark authors, locations of SIBs, and journals; (2) specifying the research streams and summarizing the most cited papers; and (3) identifying the research gaps and future directions.

The face of achievement: Editors' facial structure and journal performance

Achievement drive hypothesis indicates that individuals with higher facial width-to-height ratio (fWHR) are biologically associated with stronger achievement-drive incentives and are hence likely to exhibit better performance. In this study, we examine the relationship between editors' fWHR, an established proxy for achievement drive, and journal performance. Using finance journals as the research setting, we find a positive association between editors' fWHR and journal impact factor. The observed positive association is more pronounced for editors with shorter editorship tenure and professional career, implying that editors of relatively lower social status are more motivated to pursue better performance. These results are robust to alternative specification of independent variable, alternative journal performance measures, and different sample selection criteria. This study makes the first attempt to provide evidence on the relationship between editors' behavioral traits and journal performance from a neurological perspective.

Experiments in finance: A survey of historical trends

Experiments complement other methods in identifying causal relationships and measuring behavioral deviations from theoretical predictions. While the experimental method has long been central in many scientific disciplines, it was almost nonexistent in finance until the 1980s. To survey the development of experiments in finance, we compiled a comprehensive account of experimental studies published in the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Review of Finance, Journal of Quantitative and Financial Analysis, and Journal of Banking and Finance, and experimental finance studies published in the top 5 journals in economics. With this novel dataset, we identified historical trends in experimental finance. Since the first experiments were published in finance journals in the 1980s, especially in the last 20 years, the share of experimental publications in these journals has markedly increased. In this article, we report trends toward descriptive, individual decision, and field experiments.

Participation (Islamic) Banking in Turkey: A Bibliometric Analysis and Future Research Agenda

Turkey's Muslim heritage is rich and a Muslim majority country. Over time, more Islamic banks have opened around the world, including in Turkey. Turkey calls Islamic banks "participation banks". The study reviews bibliometric and content analysis of Turkish participation banking from Scopus. Scopus data were retrieved on Jan. 20, 2022. The keyword "Islam* or participation and bank* and Turkey or Turkish" was utilized in the title-abs-key. 82 articles and 2 reviews were examined from 1990 to 2021 in Scopus. RStudio, VOSviewer, and Excel analyzed quantitative data. Overall performance, citation (quantitative), and conceptual (qualitative) discussion for further research. The most-cited paper had 73 citations. The most relevant author, countries, institutions, and journals are AYSAN AF with 5 publications, Turkey, Istanbul University, and "International Journal of Islamic and Middle Eastern Finance and Management". The preceding literature evaluation reveals research gaps and study proposals. The analysis includes both mediumand high-quality English papers and reviews from Scopus. It accepts just Turkish participation banking-related papers. Additional research could involve the Web of Science and other units. According to the authors, It's the first bibliometric analysis of participation banking in Turkey. This research may also serve as a model for future Turkish scholars and policymakers.

Participation (Islamic) Banking in Turkey: A Bibliometric Analysis and Future Research Agenda

Turkey's Muslim heritage is rich and a Muslim majority country. Over time, more Islamic banks have opened around the world, including in Turkey. Turkey calls Islamic banks "participation banks". The study reviews bibliometric and content analysis of Turkish participation banking from Scopus. Scopus data were retrieved on Jan. 20, 2022. The keyword "Islam* or participation and bank* and Turkey or Turkish" was utilized in the title-abs-key. 82 articles and 2 reviews were examined from 1990 to 2021 in Scopus. RStudio, VOSviewer, and Excel analyzed quantitative data. Overall performance, citation (quantitative), and conceptual (qualitative) discussion for further research. The most-cited paper had 73 citations. The most relevant author, countries, institutions, and journals are AYSAN AF with 5 publications, Turkey, Istanbul University, and "International Journal of Islamic and Middle Eastern Finance and Management". The preceding literature evaluation reveals research gaps and study proposals. The analysis includes both mediumand high-quality English papers and reviews from Scopus. It accepts just Turkish participation banking-related papers. Additional research could involve the Web of Science and other units. According to the authors, It's the first bibliometric analysis of participation banking in Turkey. This research may also serve as a model for future Turkish scholars and policymakers.

Does sustainability generate better financial performance? review, meta-analysis, and propositions

ABSTRACT Sustainability in business and ESG (environmental, social, and governance) in finance have exploded in popularity among researchers and practitioners. We surveyed 1,141 primary peer-reviewed papers and 27 meta-reviews (based on ∼1,400 underlying studies) published between 2015 and 2020. Aggregate conclusions from a sample suggest that the financial performance of ESG investing has on average been indistinguishable from conventional investing (with one in three studies indicating superior performance) – in contrast with research in the wider management literature as well as industry reports. Until recently top finance journals did not publish climate change related studies, yet these studies capture the frontier of corporate risk and ESG investment strategies. We developed three propositions: first, ESG integration as a strategy seems to perform better than screening or divestment; second, ESG investing provides asymmetric benefits, especially during a social or economic crisis; and third, decarbonization strategies can potentially capture a climate risk premium.

Withdrawal: Xu, Qiping, Zwick, E. “Tax Policy and Abnormal Investment Behavior.” The Journal of Finance. 30 May 2022

This paper documents tax-minimizing investment, in which firms tilt capital purchases toward fiscal year-end to reduce taxes. Between 1984 and 2013, average investment in fiscal Q4 exceeds the average of fiscal Q1 through Q3 by 37%. Q4 spikes occur in the U.S. and internationally. Research designs using variation in firm tax positions and the 1986 Tax Reform Act show that tax minimization causes spikes. Spikes increase when firms face financial constraints or higher option values of waiting until fiscal year-end. We develop an investment model with tax asymmetries to rationalize these patterns. Models without purchase-year, tax-minimization motives are unlikely to fit the data. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Bankacılık Risk Yönetimi Alanındaki Çalışmaların Sosyal Ağ Analizi ile İncelenmesi

This study aims to examine the studies published between 2010 and 2020 in banking risk management from a bibliometric perspective and to reveal the tendencies and trends within the last decade. In this context, the bibliometric data of the studies indexed in the Web of Science Core Collection Database are obtained. The social network structure is revealed using the CiteSpace 5.5 software. According to the results of the analysis, the US-based Journal of Banking and Finance is concluded as the most frequently cited journal, where the USA has played a key role in country cooperation, and ‘management’, ‘risk’, and ‘risk management’ have been the most frequently used concepts.