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The Review of Corporate Finance Studies 2017 6(2), i3-i3
Journal Article Subscriptions Get access The Review of Corporate Finance Studies, Volume 6, Issue 2, September 2017, Page i3, https://doi.org/10.1093/rcfs/cfx007 Published: 18 August 2017

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The Review of Corporate Finance Studies 2017 6(1), i3-i3
Journal Article Subscriptions Get access The Review of Corporate Finance Studies, Volume 6, Issue 1, March 2017, Page i3, https://doi.org/10.1093/rcfs/cfx003 Published: 11 September 2016

Information Revelation in Merger Waves

Pablo Moran
The Review of Corporate Finance Studies 2017 6(2), 174-233
This paper examines the hypothesis that, during merger waves, a bidder’s actions provide information for other bidders and the market. I develop a real options model to explore the interplay between acquisition timing and the market reaction to these events. The model predicts a pattern of declining announcement returns along the merger wave and various forms of contagion returns. Consistent with the model’s predictions, in a sample of U.S. mergers, I find that the dispersion in bidders’ post-acquisition performance declines along the merger wave and that the start of a merger wave is associated with an increase in the conditional correlation of a bidder’s stock returns and the stock returns of other bidders. Received February 2, 2013; editorial decision March 1, 2017 by Editor Paolo Fulghieri.

Do Acceptance and Publication Times Differ Across Finance Journals?

Craig W. Holden
The Review of Corporate Finance Studies 2017 6(1), cfx009
For articles eventually published in the top twenty academic finance journals and top-tier academic business journals, I examine the acceptance time (the time from first-round submission to final-round acceptance) and online/print publication times (the time from first-round submission to online/print publication). I find that the median acceptance times of the top five general-interest finance journals are: Journal of Financial Economics (9.9 months), Journal of Financial and Quantitative Analysis (10.6 months), Review of Finance (11.7 months), Review of Financial Studies (15.5 months), and Journal of Finance (19.8 months). The three fastest in finance are Review of Corporate Finance Studies, Review of Asset Pricing Studies, and Financial Management. Journal of Finance is one of the slowest top-tier business journals. Large and significant time differences support the editorial differences hypothesis. Received December 14, 2016; editorial decision December 22, 2016 by Editor Paolo Fulghieri.

Subsidiary Legal Entities and Innovation

Kenneth Ayotte
The Review of Corporate Finance Studies 2017 6(1), 39-67
Placing innovative assets in a separate subsidiary creates more autonomy for the unit manager of the innovation than a division, even when the subsidiary is wholly owned and controlled by the parent. The key driver is limited liability: unlike a division, the parent has the option to walk away from the subsidiary’s debt obligations. As a result, the parent invests less in developing internal uses for the innovation. This causes the unit manager to invest more in developing independent uses for the innovation: he must ”sink or swim” on his own effort, and his desired actions are less subject to overrule. Received June 29, 2012; editorial decision June 8, 2016 by Editor Paolo Fulghieri.

Have Instrumental Variables Brought Us Closer to the Truth

Wei Jiang
The Review of Corporate Finance Studies 2017 6(2), 127-140 open access
A survey of 255 papers that rely on the instrumental variable (IV) approach for identifying causal effects published in the “Big Three” finance journals reveals that IV estimates are larger than their corresponding uninstrumented estimates in about 80% of the studies, regardless of whether the potential endogeneity is expected to create a positive or negative bias based on economic reasoning. The magnitude of the IV estimates is, on average, nine times of that of the uninstrumented estimates even when economic insights do not suggest a downward bias of the latter. This study provides several explanations to the “implausibly large” IV estimates in finance research, and proposes best practices for identification-conscientious researchers. Received January 20, 2017; editorial decision April 7, 2017 by Editor Gregor Matvos