Digests

Big broad banks: how does cross-selling affect lending?
Yingjie Qi
Review of Finance, Volume 28, Issue 2, March 2024, Pages 551–592, https://doi.org/10.1093/rof/rfad028

Cross-subsidization across multiple products is shown to increase equilibrium profit and reduce competition in the IO literature. This strategy has been documented in many industries, in which firms advertise a base price for a product and try to sell “add-ons” at high prices at the point of sale.… Read more...

Asset Complexity and the Return Gap
Pengjie Gao, Allen Hu, Peter Kelly, Cameron Peng, Ning Zhu
Review of Finance, Volume 28, Issue 2, March 2024, Pages 511–550, https://doi.org/10.1093/rof/rfad027

There is significant evidence that portfolio returns increase with wealth/sophistication. In recent work, Bach et al.… Read more...

ESG shareholder engagement and downside risk
Andreas G F Hoepner, Ioannis Oikonomou, Zacharias Sautner, Laura T Starks, Xiao Y Zhou
Review of Finance, Volume 28, Issue 2, March 2024, Pages 483–510, https://doi.org/10.1093/rof/rfad034

Institutional investor engagement on environmental, social, and governance (ESG) issues has become increasingly prevalent in financial markets.… Read more...

Measuring Climate Transition Risk Spillovers
Runfeng Yang, Massimiliano Caporin, Juan-Angel Jiménez-Martin
Review of Finance, Volume 28, Issue 2, March 2024, Pages 447–481, https://doi.org/10.1093/rof/rfad026

In this paper, we study the spillover of climate transition risk: we intend to measure how much and to what extent the climate transition risk can spread across borders. … Read more...

Securities law precedents, legal liability, and financial reporting quality
Benedikt Franke, Allen H Huang, Reeyarn Z Li, Hui Wang
Review of Finance, Volume 28, Issue 2, March 2024, Pages 413–445, https://doi.org/10.1093/rof/rfad032

Securities class actions are a major source of legal liability for US firms and should deter financial misreporting by increasing expected litigation costs for violating securities law.… Read more...

Do Banks Worry about Attentive Depositors? Evidence from Multiple-Brand Banks
Matthieu Chavaz, Pablo Slutzky
Review of Finance, Volume 28, Issue 1, January 2024, Pages 353–388, https://doi.org/10.1093/rof/rfad018

Recent events at Silicon Valley Bank and Credit Suisse have raised questions about the impact of sudden shifts in depositors’ attention towards banks.… Read more...

Inefficient Regulation: Mortgages versus Total Credit
Artashes Karapetyan, Jens Soerlie Kvaerner, Maximilian Rohrer
Review of Finance, Volume 28, Issue 1, January 2024, Pages 311–351, https://doi.org/10.1093/rof/rfad023

Regulators have implemented macro-prudential policies in response to rising household debt and real estate prices.… Read more...

Do Insiders Hire CEOs with High Managerial Talent?
Jason D Kotter, Yelena Larkin
Review of Finance, Volume 28, Issue 1, January 2024, Pages 271–310, https://doi.org/10.1093/rof/rfad016

Hiring a new CEO is an important and difficult task. The board of directors must evaluate candidates, considering both their skills and experience, in order to select the best person for the job.… Read more...

Asymmetric Information and Corporate Lending: Evidence from SME Bond Markets
Alessandra Iannamorelli, Stefano Nobili, Antonio Scalia, Luana Zaccaria
Review of Finance, Volume 28, Issue 1, January 2024, Pages 163–201, https://doi.org/10.1093/rof/rfad024

Different existing theories offer opposite predictions regarding the unobservable credit quality of firms that access bond financing in lieu of bank loans.… Read more...

Low Carbon Mutual Funds
Marco Ceccarelli, Stefano Ramelli, Alexander F Wagner
Review of Finance, Volume 28, Issue 1, January 2024, Pages 45–74, https://doi.org/10.1093/rof/rfad015

Climate change poses new challenges for portfolio management. In our not-yet-low carbon world, investors face a trade-off between minimizing their exposure to climate risks and maximizing the benefits of portfolio diversification.… Read more...