Overview

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 FinanceJournal of Financial EconomicsReview of Financial StudiesJournal 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.

Impact

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.​​

Law and Financial Institutions: The intersection between corporations, financial institutions, private and public regulators, and the government has become increasingly large and more important since the financial crisis. The influence and effects of this intersection have proven to be, and will likely continue to be, an important and interesting area of research.

The separation of ownership and control (manager-shareholder issues and shareholder-shareholder issues) has been and will continue to be an important research area for scholars; faculty are actively engaged in research on governance topics such as the impact of family ownership and control on firm performance, the effect of board structure on firm performance and firm value, and the effect of CEO compensation structure on firm risk-taking, and the effects of country governance and culture on the firm.

Different types of risk affect investors uniquely, and should consequently command different risk premia. Estimating these premia has important implications not only for finance, but macroeconomics more generally. Many recent advances in econometric and statistical techniques have provided new, robust testing methods.

Real estate research and centers have, and will continue to be, an important route for departments and business schools to become integrated into the local and regional markets. The Finance Department has a strong presence in real estate research, with specific topics such as mortgage choice, zoning and land use regulation, and real estate asset pricing.

Sample Publications

  • Qiu, Yue and Tracy Wang, 2021, Skilled Labor Risk and Corporate Policies, Review of Corporate Finance Studies 10, 437-472
  • Qiu, Yue and Xin Dai, 2021, Common Ownership and Corporate Social Responsibility, Review of Corporate Finance Studies 10, 551-577
  • Chabakauri, Georgy and Oleg Rytchkov, 2021, Asset Pricing with Index Investing, Journal of Financial Economics 141, 195-216
  • Bakshi, Gurdip, Xiaohui Gao, and George Panayotov, 2021, A Theory of Dissimilarity Between Stochastic Discount Factors, Management Science 67, 4602-4622
  • Deng, Saiying (Esther), Connie X. Mao, and Cong Xia, 2021, Bank Geographic Diversification and Corporate Innovation: Evidence from the Lending Channel, Journal of Financial and Quantitative Analysis 56, 1065-1096
  • Mao, Connie X. and Wei-Ling Song, 2021, Does Reciprocity Affect Analysts’ Incentives to Release Timely Information? Evidence from Syndication Relationships in Securities Underwriting, Management Science 67, 617-639
  • Choi, Jongmoo Jay, Ming Ju, Lenos Trigeorgis, and Xiaotian Tina Zhang, 2021, Outsourcing Flexibility under Financial Constraints, Journal of Corporate Finance 67, 101890
  • Gelman, Michael, Zaheer Khan, Amir Shoham, and Shlomo Y.Tarbad, 2021, Does Local Competition and Firm Market Power Affect Investment Adviser Misconduct? Journal of Corporate Finance 66, 101810
  • Daniel, Naveen D., Yuanzhi Li, and Lalitha Naveen, 2020, Symmetry in Pay for Luck, Review of Financial Studies 33, 3174-3204
  • Rytchkov, Oleg and Xun Zhong, 2020, Information Aggregation and P-hacking, Management Science 66, 1605-1626
  • Elyasiani, Elyas, Luca Gambarelli, and Silvia Muzzioli, 2020, Moment Risk Premia and the Cross-Section of Stock Returns in the European Stock Market, Journal of Banking and Finance 111, 105732
  • Bakshi, Gurdip and Fousseni Chabi-Yo, 2019, New Entropy Restrictions and the Quest for Better Specified Asset Pricing Models, Journal of Financial and Quantitative Analysis 54, 2517-2541
  • Bakshi, Gurdip, Xiaohui Gao, and Alberto Rossi, 2019, Understanding the Sources of Risk Underlying the Cross-Section of Commodity Returns, Management Science 65, 619-641
  • Qiu, Yue, 2019, Labor Adjustment Costs and Risk Management, Journal of Financial and Quantitative Analysis 54, 1447-1468
  • Bakshi, Gurdip, Marrio Cerrato, and John Crosby, 2018, Implications of Incomplete Markets for International Economies, Review of Financial Studies 31, 4017-4062