A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.

• Addoum, J. M., Goldstein, I., & Murfin, J. R. (2020). Information asymmetry and financing arrangements: Evidence from syndicated loans. Review of Financial Studies, 33, 3766–3803.

  Equity markets fail to account for the value-relevant nonpublic information enjoyed by syndicated loan participants and reflected in publicly posted loan prices. A long-short strategy that buys (sells) the equities of firms with recently appreciated (depreciated) loans earns large risk-adjusted returns, suggesting a surprising and economically important level of segmentation across the same firm’s capital structure. The information lag captured by trading strategy returns is not affected by drivers of firm-specific attention, including the publication of loan returns in the Wall Street Journal. Instead, returns to the strategy are eliminated among equities held by mutual funds also trading in syndicated loans.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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• Addoum, J. M., Hong, H., Ng, D. T., & Ortiz-Bobea, A. (2020). Temperature Shocks and Establishment Sales. Review of Financial Studies, 33, 1331–1366.

  Combining granular daily data on temperatures across the continental United States with detailed establishment data from 1990 to 2015, we study the causal impact of temperature shocks on establishment sales and productivity. Using a large sample yielding precise estimates, we do not find evidence that temperature exposures significantly affect establishment-level sales or productivity, including among industries traditionally classified as “heat sensitive.” At the firm level, we find that temperature exposures aggregated across firm establishments are generally unrelated to sales, productivity, and profitability. Our results support existing findings of a tenuous relation between temperature and aggregate economic growth in rich countries.

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• Agarwal, S., Mikhed, V., & Scholnick, B. (2020). Peers’ Income and Financial Distress: Evidence from Lottery Winners and Neighboring Bankruptcies. Review of Financial Studies, 33, 433–472.

  We examine whether relative income differences among peers can generate financial distress. Using lottery winnings as plausibly exogenous variations in the relative income of peers, we find that the dollar magnitude of a lottery win of one neighbor increases subsequent borrowing and bankruptcies among other neighbors. We also examine which factors may mitigate lenders’ bankruptcy risk in these neighborhoods. We show that bankruptcy filers obtain more secured, but not unsecured, debt, and lenders provide additional credit to low-risk, but not high-risk, debtors. In addition, we find evidence consistent with local lenders taking advantage of soft information to mitigate credit risk.

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• Ai, H., Li, J. E., Li, K., & Schlag, C. (2020). The Collateralizability Premium. Review of Financial Studies, 33, 5821–5855.

  A common prediction of macroeconomic models of credit market frictions is that the tightness of financial constraints is countercyclical. Theory suggests a negative collateralizability premium; that is, capital that can be used as collateral to relax financial constraints insures against aggregate shocks and commands a lower risk compensation compared with noncollateralizable assets. We show that a long-short portfolio constructed using a novel measure of asset collateralizability generates an average excess return of around 8% per year. We develop a general equilibrium model with heterogeneous firms and financial constraints to quantitatively account for the collateralizability premium.

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• Ajello, A., Benzoni, L., & Chyruk, O. (2020). Core and ‘Crust’: Consumer Prices and the Term Structure of Interest Rates. Review of Financial Studies, 33, 3719–3765.

  We propose a no-arbitrage model of the nominal and real term structures that accommodates the different persistence and volatility of distinct inflation components. Core, food, and energy inflation combine into a single total inflation measure that ties nominal and real risk-free bond prices together. The model successfully extracts market participants’ expectations of future inflation from nominal yields and inflation data. Estimation uncovers a factor structure common to core inflation and interest rates and downplays the pass-through effect of short-lived food and energy shocks on inflation and interest rates. Model forecasts systematically outperform survey forecasts and other benchmarks.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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• Alan, N. S., Hua, J., Peng, L., & Schwartz, R. A. (2020). Resiliency and Stock Returns. Review of Financial Studies, 33, 747–782.

  We present resiliency as a measure of liquidity and assess its relationship to expected returns. We establish a covariance-based measure, RES, that captures opening period resiliency, and use it to find a significant nonresiliency premium that ranges from 33 to 57 basis points per month. The premium persists after accounting for an extensive list of other liquidity-related measures and control variables. The results are significant for both value-weighted and equal-weighted returns, when micro-cap stocks are excluded, and for a sample of large cap stocks. The premium is particularly pronounced when trading volume is high.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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• Alok, S., & Ayyagari, M. (2020). Politics, State Ownership, and Corporate Investments. Review of Financial Studies, 33, 3031–3087.

  We document a political cycle in the investment decisions of state-owned enterprises (SOEs) by using the constitutionally mandated election schedule in India as a source of exogenous variation in politicians’ incentive to cater to voters. Using a project-level investment database, we find that SOEs announce more capital expenditure projects in election years, especially in infrastructure, and in districts with close elections, high-ranking politicians, and left-wing incumbents. SOE projects in election years have negative announcement returns, suggesting a loss in shareholder value. These patterns are not seen in nongovernment firms or in off-election years. (JEL G31, G38, D72, D73, P16)Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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• Alok, S., Hong, H., Kumar, N., & Wermers, R. (2020). Do Fund Managers Misestimate Climatic Disaster Risk. Review of Financial Studies, 33, 1146–1183.

  We examine whether professional money managers overreact to large climatic disasters. We find that managers within a major disaster region underweight disaster zone stocks to a much greater degree than distant managers and that this aversion to disaster zone stocks is related to a salience bias that decreases over time and distance from the disaster, rather than to superior information possessed by close managers. This overreaction can be costly to fund investors for some especially salient disasters like hurricanes and tornadoes: a long-short strategy that exploits the overreaction generates a significant DGTW-adjusted return over the following 2 years.

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• Andrikogiannopoulou, A., Cornelli, F., & Papakonstantinou, F. (2020). Market efficiency and the favorite-longshot bias: The baseball betting market. Review of Financial Studies, 33, 3674–3718.

  Using trading data from a sports wagering market, we estimate individuals’ dynamic risk preferences within a prospect theory paradigm. This market’s experimental-like features facilitate preference estimation, and our long panel enables us to study whether preferences vary across individuals and depend on earlier outcomes. Our estimates extend support for experimental findings—mild utility curvature, moderate loss aversion, and probability overweighting of extreme outcomes—to a market setting and reveal that preferences are heterogeneous and history dependent. Applying our estimates to a portfolio choice problem, we show prospect theory can better explain the prevalence of the disposition effect than previously thought.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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• Argyle, B. S., Goldstein, I., Nadauld, T. D., & Palmer, C. J. (2020). Consumption and liquidity constraints: An empirical investigation. Review of Financial Studies, 33, 5416–5462.

  We document three phenomena we jointly refer to as monthly payment targeting. First, using data from 500,000 used auto loans and discontinuities in contract terms offered by hundreds of lenders, we show that demand is more sensitive to maturity than to interest rate, consistent with consumers managing payment size when making debt decisions. Second, many consumers appear to employ segregated mental accounts, spending exogenous payment savings on larger loans. Third, consumers bunch at round number monthly payment amounts, consistent with heuristic budgeting. That these patterns hold in subsamples of likely constrained and unconstrained borrowers challenges liquidity constraints as a complete explanation.

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