WhatsHotinFinance

(200711)

StudentsofF798
(IndianaUniversity)

Electronic copy available at: http://ssrn.com/abstract=2142203

WhoisWinning?
Impact Factor Data from Journal Citation Reports:
http://adminapps.webofknowledge.com/JCR/JCR?RQ=HOME
7

QJE,5.92

5
RFS,4.748
JF,4.218

JFE,3.725
3

JPE,2.902
AER,2.693

2
JFQA,1.775
ROF,1.591
1

0
2007

2008

2009

Electronic copy available at: http://ssrn.com/abstract=2142203

2010

2011

Whats hot?
Journal of Financeyifmao@indiana.edu

Background
Each issue of the journal reaches over 8,000
academics, finance professionals, libraries,
government and financial institutions around the
world.
Published six times a year
Editorial Board
Editor:
Kenneth J Singleton, Stanford University

Co-Editors
Bruno Biais, Toulouse School of Economics
Michael R. Roberts, University of Pennsylvania

9/4/2012

Submission Process in Detail

Processing
Time
Less than 20
days
20-29 days

Number

Cumulative
Percentage

2700

25.30%

553

30.40%

30-39 days

1207

41.70%

40-49 days
50-59 days

1539
1097

56.10%
66.40%

60-69 days

810

74.00%

70-79 days

563

79.30%

80-89 days

430

83.30%

90-99 days
100 or more
days

392

87.00%

1393

100.00%

Median
turnaround

Editorial Decisions

Rejected
Returned for
Revisions
Accepted
Total

Number

Percentage

8274

77.40%

1837

17.20%

573
10684

5.40%
100.00%

Decisions by Round
Rejected

Revise

Accepted

Round 1

8155

1006

Round 2

98

534

102

Round 3

19

236

246

Round 4

57

171

Round 5

50

45

9/4/2012

9/4/2012

Asset Pricing
Classic
Term Structure (evolvement of theoretical models)
Treasury bond
Information and liquidity risk pricing

Long-horizon risk of equity

Portfolio choice
Financial crisis (discussion for the reasons)
Link with corporate finance
Momentum and credit rating
9/4/2012

9/4/2012

Corporate Finance I

Classic (old topics, new methodology)

Capital structure, M&A, financing & investment

Corporate governance (interaction with other fields)

Governance and information flow, labor, capital structure
Governance tradeoffs
CEO compensation, board structure / inside debt, entrenched managers

Interaction between the firm and the financial markets (security studies)
Security design to induce information from the equity market
Feedback effects
2-way feedback

Corporate bond (less explored)

Transparency, transaction cost

9/4/2012

Corporate Finance II
Private/public firms (less explored)
Different financing cost (data from UK)
The decision to go private
Discount rate (Presidential address)
Shareholder proposal
Venture capital, innovation (new and booming)

9/4/2012

9/4/2012

Microstructure I
Liquidity (travelled a lot)
liquidity and law of one price
liquidity crises: predatory trading liquidity coinsurance,
crisis liquidity or credit risk?
liquidity and transaction cost, analyst disagreement and
mispricing
Trading (linked to behavioral issues)
limited attention and allocation of efforts to trading
Reputation effects
Trust and limited participation in the stock market
Trade initiation from market sideness
Sensation seeking, overconfidence

9/4/2012

10

Microstructure II
Short sale (special data and event study)
Use it a background to test other theories
Supply and demand shifts in the shorting market
(proprietary data on stock loan fees and quantities
from a large institutional investor)
Short-sale constraints and price discovery
(evidence from Hong Kong)
Effects of the Securities and Exchange
Commission (SEC)-mandated temporary
suspension of short-sale price tests for a set of
Pilot securities

9/4/2012

11

Investment
Hedge fund/ Mutual fund (with a focus on
managers)
High-water-mark compensation contracts
of hedge fund managers and their portfolio
choice
Shareholder activism
Managerial ability and closed-end fund
Director ownership in the industry

9/4/2012

12

New topics / methodologies

Internet, Media, Sports
Corporate speculation/ hedging
Labor

Labor and corporate governance (union laws, international evidence)

Human capital and equity investment as portfolio choice
Share Repurchases and Pay-Performance Sensitivity of Employee
Compensation Contracts
Work Ethic, Employment Contracts, and Firm Value
Employee stock options and investment

Political uncertainty

Corporate investment

Textual analysis

9/4/2012

13

Conclusion
Empirical corporate finance is the hottest
area.
Old topics are still investigated with new
methodologies which enable new findings.
There are more and more interactions
between different fields.

9/4/2012

14

WhatsHotinJFE(2008 2012)

JFEFacts
Journal of Financial Economics, Published by Elsevier.
Operated by Simon School of Business at University of
Rochester.
First issue published in May 1974, now published monthly.
Principle:
Papers that raise a new question or pose an old one in an innovative
way and papers that test theories in specialized ways or document
interesting phenomena which are likely to stimulate new research are
emphasized.

What we pay:
Subscriber $600.
Nonsubscriber $650.

JFEFacts
What we get:

Median Turnaround 28 days.

Acceptance Rate 10% (out of 1237).
2011 Impact Factor: 3.725. Third in Finance.
5Year Impact Factor: 5.676.
TwoStage Review Process:
1. I will screen all submissions and determine whether, even if the claims of
the authors are correct, the topic of the paper is of sufficiently broad interest
to warrant publication in the JFE. If I determine that the paper does not meet
that standard, I will send a quick rejection letter and refund all but $100 of the
submission fee. The submitting author will receive no referee's report and there
will be no right of appeal. My goal is to have fewer referees' reports that merely
say "this paper is OK, but just not interesting/broad enough for the JFE.
2. Real review process.

NumberofArticles
160
136

140

120

100

97

103

101
92

80

60

40

20

0
2008

2009

2010

2011

2012

Theoreticalvs.Empirical
100%
90%
80%
70%
60%

81

88

84

125

90

50%
40%
30%
20%
10%

16

13

11

13

0%
2008

2009

2010
Theoretical

Empirical

2011

2012

TrendbyAreas
100%
90%
80%
70%
Other

60%

Microstructure
50%

Investment
CorporateFinance

40%

AssetPricing
30%
20%
10%
0%
2008

2009

2010

2011

2012

AssetPricingTopics
Pricing of Specific Assets
Derivatives
Fixed Income
Mortgage backed Securities

Explaining Empirical Facts

Return Predictability
Anomalies and Puzzles
CrossSectional and Time Series of Returns
International Facts

New Pricing Factors and Models

Macro Models
Liquidity Factor
Political Factors

Other Topics
Sentiment
Short Selling Constraint
New Methodologies

AssetPricingTopics
100%
90%
80%
70%
60%

Other
NewFactors&Models

50%

EmpiricalFacts
40%

PricingSpecificAssets

30%
20%
10%
0%
2008

2009

2010

2011

2012

CorporateFinanceTopics

Firm Financial Decisions

Capital Structure
Investment Decision
Payout Decision
Loan Financing
Market Timing

IPO and M&A

IPO Decision and Wave
Analysts role in IPO and M&A
Information Asymmetry and Agency Problem

Managers and Governance

Compensation and Incentives

Board and Monitoring
Executive Behavior
Legal Factors

Other Topics
Venture Capital and Entrepreneurship
Political Factors
International Facts

CorporateFinanceTopics
100%
90%
80%
70%
60%

Other
Managers&Governance

50%

IPOandM&A
40%

FinancialDecisions

30%
20%
10%
0%
2008

2009

2010

2011

2012

MicrostructureTopics
Market Design and Rules
Opaqueness and Market Fragility
CrossListing
Short Selling

Limit Order Market

Dynamic Limit Order Book
Impact of Limit Order

Investor Behavior and Trading Strategies

Information and Liquidity
Liquidity
Informed Trading
Microstructure and Asset Pricing

MicrostructureTopics
100%
90%
80%
70%
60%

Informativeness&Liquidity
InvestorBehavior&Strategies

50%

LimitOrderMarket
40%

MarketDesign&Rules

30%
20%
10%
0%
2008

2009

2010

2011

2012

InvestmentTopics
Mutual Fund
Performance
Flow of Liquidity
Regulation

Hedge Fund
International Investment
Other Topics
Sovereign Fund
Sentiment
Religion, Sin Stock.

InvestmentTopics
100%
90%
80%
70%
60%

Other
International

50%

HedgeFund
40%

MutualFund

30%
20%
10%
0%
2008

2009

2010

2011

2012

OtherTopics
Banking
Bank Liquidity and Failure
Loan and Credit Lines
Banking and Corporate Finance

Bubbles and Crisis

Causes of Bubbles and Crisis

Impact on Markets and Economy
Mortgage Market
Microstructure Explanations

Other Topics

Legal and Political Connection

Investor Sentiment
Credit Rating
New Methodologies

OtherTopics
100%
90%
80%
70%
60%
Other
50%

Bubbles&Crisis
Banking

40%
30%
20%
10%
0%
2008

2009

2010

2011

2012

Conclusion

There are more topics that cannot easily be categorized

within purely one area.
Techniques from one area are more frequently to be applied
to other areas.
More theoretical papers contain an empirical part or at least
simulations.
Many novo research questions emerged after the crisis.

Corporate Finance: Hottest but Cooling Down

Asset Pricing: Slightly Hotter
Microstructure: Hold
Investment: Hold (Mutual Down, Hedge Up)
Other Topics: Hotter (Esp. Sentiment)

Whats Hot in the Review of

Financial Studies

About The Review of Financial

Studies
The Review of Financial Studies (RFS) is highly
respected journal within the finance literature
2011 Impact Factor of 4.748 ranking it number 1 of 86
Business and Finance Journals
5
Impact trending up 4.5
4
3.5
3
2.5

Impact Factor

2
1.5
1
0.5
0
2007

2008

2009

2010

2011

Submission Process
Submit your manuscript
Decision made within 120 days or your money
back (Median turnaround 45 days)
Goal to have decision within two or three rounds
Acceptance Rate: 6.8%

Other Notes
Current Executive Editor: David Hirshleifer
Previous Editor: Matthew Spiegel (2005-2011)
Did not publish monthly until 2009

Articles by Year
160
140
120
2007
100

2008
2009

80

2010
2011

60

2012

40
20
0
2007

2008

2009

2010

2011

2012

Are you a Theorist or Empiricist?

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Theory
Empirical
Both

2007

2008

2009

2010

2011

2012

What About Content?

Topics by Year
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Other
MM
Inv
CF
AP

2007

2008

2009

2010

2011

2012

Asset Pricing

Pricing of Specific Assets

Explaining of Empirical Facts
Other Topics
New Methodologies
Sentiment

Asset Pricing
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Pricing
Other
Exp Emp Facts

2007

2008

2009

2010

2011

2012

Corporate Finance
Firm Financial Decisions
IPOs / Mergers and Acquisitions
Managers and Governance
Other Topics
Venture Capital
International Facts

Corporate Finance
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Other
Mgr Govn
IPO M&A
Firm Fin Dec

2007

2008

2009

2010

2011

2012

Investments

Mutual Funds
Hedge Funds
International

Investments
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

MF
Intl
HF

2007

2008

2009

2010

2011

2012

Market Microstructure

Market Design and Rules

Limit Order Market
Investor Behavior and Trading
Information and Liquidity

Market Microstructure
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Mkt Des Rules

Lim Order
Info Liq
Inv Beh Trad Strat

2007

2008

2009

2010

2011

2012

Other Topics

Banking
Bubbles and Crisis
Other Topics
Politics
Credit Ratings

Other Topics
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Other
Bubbles/Crisis
Banking

2007

2008

2009

2010

2011

2012

Conclusions

Empirical studies are dominating

Asset Pricing and Corporate Finance
are hot
Large shocks increase Other papers
Crossover in categories increasing
with time

Whats Hot in JFQA

2007 2011

About JFQA

Subjects: Banking, finance & investing, quantitative research

Description: Theoretical and empirical research in financial economics, including corporate

finance, investments, capital and security markets and quantitative methods of particular
relevance to financial researchers.

4 Editors: University of Utah (1), NYU (1), University of Washington (2)

More information on JFQA: http://journals.cambridge.org/action/displayJournal?jid=JFQ#

Publication Process

Began publication in 1966

Published by: University of Washington (in cooperation with University of Utah and NYU,
and Cambridge University Press)

Issued every other month beginning in 2009 (previously, issued quarterly)

$250 submission fee (effective July 1, 2012)

Acceptance rate for submitted articles = 8%

+600 manuscripts submitted annually

Number of Articles

Theoretical vs. Empirical

Trends by Area

Corporate Topics

Firm financial decisions

Capital structure
Investment decisions
Payout decisions (dividend and repurchases)
SEOs
IPOs and M&A
Signaling
IPO pricing
IPO and M&A incentives
Role of governance
Managers and Governance
Board changes
Managerial characteristics
Compensation
Other Topics
Corporate event waves
Ownership structure

Corporate Topics

Asset Pricing Topics

Specific asset pricing

Fixed income
Derivatives
Credit default swaps
Currency rates
Returns analysis
Cross section and time-series
Liquidity shocks and returns
Risk and return
Momentum
New pricing models
CAPM using new econometric techniques
New liquidity/volatility measures
Other
Valuation (firm, annuities)
Returns in emerging markets

Asset Pricing Topics

Microstructure

Market quality and information

Liquidity and order flow
Trading volume
Exchange rate co-movements
Information quality
International market integration
Market timing
Trading strategies and investor type
Informed traders
Anonymous trading
Trading strategies in options
Other
Auctions
Delistings
Transaction costs

Microstructure Topics

Investment

Venture capital
Governance
Reputation
Conflicts of interest
Hedge funds
Risk
Return smoothing
Portfolio management
Performance
Selection
Investment styles
Mutual Funds
Asset allocation
Performance
Governance

Investment Topics

Other topics

Accounting
Analysts (forecasts, emerging markets)
Earnings management
Earnings announcements
Taxes
Investment banking
Bankruptcy and financial distress costs
Behavioral
Other
Legal actions (shareholder rights)
Political markets
Innovation
Labor markets
Family firms
Bubbles

Other Topics

Conclusion

Corporate finance is hot!

In 2011, there was a resurgence of IPO research
Other popular areas include ownership structure, governance, capital structure, and
payout decisions
Asset pricing is cooling down, but still popular
In 2007, fixed income pricing was very popular.
In 2011, derivative/option pricing is the most popular sub-topic.
Expected returns and volatility/liquidity factors has been another popular area.
Microstructure remains very cool
Investment is getting hotter
Investment articles are nearly as popular as asset pricing articles in 2011.
Portfolio management has been consistently popular in the past 5 years.
In 2011, venture capital gained popularity
Other is a hold
Even though it is a hold, it is quite popular due to the variety of articles published
Accounting is trending, particularly articles relating to analyst forecasts