Faculty in the Finance Department at the Fox School are engaged in research that covers a broad spectrum of topics including corporate governance, the effect of regulation on firms and markets, risk and its effect on asset valuations, and residential and commercial real estate markets. Faculty research regularly appears in the top finance, economics, accounting, and management journals such as the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Accounting and Economics, and Management Science. The department continues to build a strong research foundation by recruiting promising faculty members from top-ranked national and international finance and economic programs.
The Finance department’s research seeks to inform and educate investors, regulators, and other financial market participants on a broad range of issues that have a direct impact on firm value. Much of the research within the Finance Department is focused on understanding how to resolve the agency problem with the firm. In its simplest form, agency theory proposes that the firm’s owners or principals hire managers (agents) and then delegate the firm’s day-to-day operating decisions to these managers. This separation of ownership and management creates a conflict of interest within the firm as managers seek to maximize their personal welfare at the expense of that of the shareholders. Finance faculty produce research which impacts industry by examining how corporate governance mechanisms can be used effectively to mitigate such conflicts of interest. Specifically, research work focuses on how corporate boards, compensation systems, equity-ownership structures, and activist shareholders help align the incentives of managers with those of shareholders.
Themes – The Global Impact of Fox School Research
Research is a top priority at the Fox School. Faculty and students across departments regularly make unique contributions that impact the academic world and the global business community, as well as society as a whole. Learn more about the important work done at Fox by exploring the following research themes.
Goldstein, I., Li, Yan, and Yang, L. “Speculation and Hedging in Segmented Markets,” Review of Financial Studies (27:3), 2014, pp. 881-922.
Rytchkov, O. “Asset Pricing with Dynamic Margin Constraints,” Journal of Finance (69:1), 2014, pp. 405-452.
Savor, P., and Roussanov, N. “Marriage and Managers’ Attitudes to Risk,” Management Science, 2014.
Savor, P., and Wilson, M. “Asset Pricing: A Tale of Two Days,” Journal of Financial Economics (113), 2014, pp. 171-201.
Li, Yan, Ng, D., and Swaminathan, B. “Predicting Market Returns Using Aggregate Implied Cost of Capital,” Journal of Financial Economics (110:2), 2013, pp. 419-436.
Li, Yan, and Yang, L. “Prospect Theory, the Disposition Effect and Asset Prices,” Journal of Financial Economics (107:3), 2013, pp. 715-739.
Li, Yan, and Yang, L. “The Asset-Pricing Implications of Dividend Volatility,” Management Science (59:9), 2013, pp. 2036-2055.
Savor, P., and Wilson, M. “Stock Returns after Major Price Shocks: The Impact of Information,” Journal of Financial Economics (106), 2012, pp. 635-659.