Latest News

Virtual Issue: Effects and Responses to Economic Downturns

The COVID-19 pandemic is a serious crisis.  To understand its effects, and to guide policy responses, we need evidence.  However, since the crisis is recent, we do not yet have enough data to understand its long-term effects; since some policy responses have not yet been tried, or have only recently been implemented, we are unable to assess their success. … Read more...

Governance Under the Gun: Spillover Effects of Hedge Fund Activism

The lead article in Volume 23, Issue 6 of the Review of Finance is Governance Under the Gun: Spillover Effects of Hedge Fund Activism by Nickolay Gantchev, Oleg Gredil and Chotibhak Jotikasthira.  This paper finds that the threat of hedge fund activism spurs non-targeted companies to improve profitability and valuations, increase payout, and reduce capital expenditure and cash holdings. 

The Debate Around Hedge Fund Activism

Hedge fund activism is a controversial topic.  Prominent lawyer Marty Lipton argues that the long-term future of corporate America is being undermined “by a gaggle of activist hedge funds who troll through S.E.C.… Read more...

Editorial Board Changes

The Rewiew of Finance is delighted to announce the appointment of Marcin Kacperczyk as Editor for a three-year term starting in January 2020. He replaces Jules van Binsbergen whose term ends in December 2019. Jules has made superb contributions to the RF, not only in handling papers but also providing insights into broader journal strategy, and will continue in a new role of Advisory Editor after he steps down.… Read more...

Managing Editor’s Report for 2018/19

The Managing Editor’s Report for 2018/9 is available here. Some highlights include:

  • Our acceptance rate for regular submissions has fallen to 4.1% (from 5.3% in 2017-8 and 6.3% in 2018-9), consistent with our policy of applying top-three standards. Our fast-track acceptance rate is 2%
    • As a result, our backlog continues to fall substantially, reducing the time between acceptance and in-print publication.
… Read more...

Credit Market Competition and Liquidity Crises

The lead article in Volume 23, Issue 5 of the Review of Finance is Credit Market Competition and Liquidity Crises by Elena Carletti and Agnese Leonello.  This paper finds that – contrary to common concerns – greater competition in the banking industry can reduce the risk of financial crises. 

The Double-Edged Sword of Competition

In most industries, competition is believed to be socially beneficial – it benefits customers through greater product choice and lower prices, suppliers through higher input costs, and workers through enhanced wages.… Read more...

2018/9 Best Paper and Best Referee Awards

The Review of Finance congratulates the following award winners:

Pagano/Zechner award for best non-investments paper

Winner: Gene Amromin, Jennifer Huang, Clemens Sialm, Edward Zhong for Complex Mortgages (summary)

Runner-up: Han Kim, Ernst Maug, Christoph Schneider for Labor Representation in Governance as an Insurance Mechanisms (summary)

Finalists:

… Read more...

Do Credit Default Swaps Mitigate the Impact of Credit Downgrades?

The lead article in Volume 23, Issue 3 of the Review of Finance is Do Credit Default Swaps Mitigate the Impact of Credit Downgrades? by Sudheer Chava, Rohan Ganduri, and Chayawat Ornthanalai.  When a firm’s debt is downgraded, its stock price falls, it subsequently raises less debt, and its cost of debt increases.  This paper finds that, when credit default swaps (CDS) trade on its debt, all three effects are reduced – suggesting that CDS alleviates the financial frictions arising from downgrades.… Read more...

Option to Suggest Editors

The Review of Finance has now added the option to suggest editors. The submission system contains a drop-down where you can make a selection (or choose “None Selected”). We will take author suggestions into account but are not always able to accommodate them due to factors such as workload, fit, and conflicts.… Read more...