Digests

Tu Nguyen, Sandy Suardi, Jing Zhao
Review of Finance, Volume 29, Issue 4, July 2025, Pages 1259–1302, https://doi.org/10.1093/rof/rfaf026

This study investigates the systemic implications of industry tournament incentives—the external pay disparities among CEOs across similar firms—for financial stability. Motivated by Coles, Li, and Wang (2020), who argue that industry tournament incentives increase managerial risk-seeking behavior, we extend their insight to assess whether these incentives contribute to systemic risk in the financial sector.… Read more...

Bastian von Beschwitz , Pekka Honkanen , Daniel Schmidt
Review of Finance, Volume 29, Issue 4, July 2025, Pages 1137–1188, https://doi.org/10.1093/rof/rfaf023

Over the past two decades, passive investment has transformed financial markets, with passive funds surpassing active funds in assets under management in 2019.… Read more...

Marta Cota
Review of Finance, Volume 29, Issue 4, July 2025, Pages 1105–1136, https://doi.org/10.1093/rof/rfaf021

Biased income expectations shape retirement savings in ways that traditional policy models often overlook. In this paper, I outline a mechanism under which low-income workers, typically pessimistic about future earnings, delay retirement contributions, prioritizing liquidity as a buffer against uncertainty.… Read more...

Lykourgos Alexiou, Amit Goyal, Alexandros Kostakis, Leonidas Rompolis
Review of Finance, Volume 29, Issue 4, July 2025, Pages 963–1007, https://doi.org/10.1093/rof/rfaf016

We document that the implied volatility (IV) curves of equity options frequently exhibit concavity prior to the earnings announcement dates (EAD).… Read more...

Hao Liang and Cara Vansteenkiste
Review of Finance, Volume 29, Issue 3, May 2025, Pages 851–886, https://doi.org/10.1093/rof/rfaf007

Corporate philanthropy often sparks debate about its impact on shareholder value, particularly in response to natural disasters. Is it a strategic move to enhance reputation, or does it reflect managerial agency problems?… Read more...

Giorgia Simion and Ugo Rigoni
Review of Finance, Volume 29, Issue 3, May 2025, Pages 819–850, https://doi.org/10.1093/rof/rfaf014

As retail bond issuance can serve as an important funding source for banks during periods of market stress, it raises concerns about potential conflicts of interest between banks and their clients.… Read more...

Pierre Chaigneau and Nicolas Sahuguet
Review of Finance, Volume 29, Issue 3, May 2025, Pages 779–818, https://doi.org/10.1093/rof/rfaf012

How can corporate executives be motivated to generate both financial and social value? One approach is to integrate Environmental, Social, and Governance (ESG) performance metrics into executive compensation plans.… Read more...

Donald E Bowen and Jérôme P Taillard
Review of Finance, Volume 29, Issue 3, May 2025, Pages 747–777, https://doi.org/10.1093/rof/rfaf010

The 2002 NYSE/NASDAQ board independence mandates allow us to study how changes in board composition affect firm performance. The mandates required firms to have a majority of independent directors, with two paths to compliance: (1) replacing non-independent directors with independent directors or (2) “reclassifying” existing non-independent directors as independent once they met certain criteria (such as being three years removed from prior employment at the firm).… Read more...

Itzhak Ben-David, Mark J. Johnson, René M. Stulz
Review of Finance, Volume 29, Issue 3, May 2025, Pages 711–745, https://doi.org/10.1093/rof/rfaf009

The paper examines the resilience of data-driven lending during the unprecedented economic upheaval caused by the COVID-19 crisis, focusing specifically on small business fintech lending in March 2020.… Read more...

Sulkhan Chavleishvili, Manfred Kremer
Review of Finance, Volume 29, Issue 3, May 2025, Pages 685–710, https://doi.org/10.1093/rof/rfaf013

The Global Financial Crisis highlighted a critical asymmetry in macro-financial linkages, namely the fact that financial conditions have particularly strong effects on real economic activity in times of elevated financial distress.… Read more...