Survey Research in Finance: Views from Journal Editors

We survey editors from 15 core and 35 non-core finance journals to learn their views about specific issues involving survey research. Based on responses from 25 editors, none of their journals has an established policy involving the publication of survey research. The evidence shows that survey-based manuscripts typically go through the same review process as other manuscripts. However, editors of core versus non-core journals have mixed views about the role that survey research should play in the finance literature. The editors provide their views about the strengths and weaknesses of survey research as well as topic areas that would benefit from using this approach. A review of a finance journals shows that the publication of survey-based papers is an infrequent event for most journals

Survey Research in Finance: Views from Journal Editors

We survey editors from 15 core and 35 non-core finance journals to learn their views about specific issues involving survey research. Based on responses from 25 editors, none of their journals has an established policy involving the publication of survey research. The evidence shows that survey-based manuscripts typically go through the same review process as other manuscripts. However, editors of core versus non-core journals have mixed views about the role that survey research should play in the finance literature. The editors provide their views about the strengths and weaknesses of survey research as well as topic areas that would benefit from using this approach. A review of a finance journals shows that the publication of survey-based papers is an infrequent event for most journals

A Survey of Leasing in Small Firms

This paper reports survey results regarding leasing practices of small firms. Small firms that lease are more likely to be relatively large manufacturing firms which exhibit higher debt ratios and higher sales growth. The survey responses as well as empirical analyses of pertinent data reveal that the relationship between debt and leasing is complementary. Unlike their larger counterparts, small firms seldom use text-book recommended lease-borrow decision models. Also, unlike large firms, small firms are more likely to offer “dubious” reasons, such as off-balance sheet accounting and 100 percent financing, as advantages of leasing

Informational externalities of going public decisions: evidence from industrial sector

Theoretical models predict that going public firms generate positive externalities, creating a spillover effect for other firms to go public. In this paper, we posit that venture backed IPOs convey positive informational externalities for the publicly traded rival firms in the same industry and test three related hypotheses. The hypotheses are: 1) Venture backed IPOs convey positive information about industry and this information is transferred to rival firms; 2) Intra-industry information transfer varies with rivals\u27 characteristics; 3) IPO price revisions generate additional information that affects rivals\u27 valuation. The results show that rivals have positive valuation effects only in response to venture backed IPOs and no significant reaction in response to non-venture backed IPOs. We also find evidence that the effect on rival firms is stronger if they operate in low concentrated industries (i.e. high competition) and have low growth opportunities. The relative size of IPO firm seems to play an important role in the direction and magnitude of industry rivals\u27 valuation effects. Negative information revealed in the form of downward price revisions adversely affect rival firms\u27 valuation

Examining the Choice Between Tracking Stocks and Minority Carve-out and Their Relative Performances

In this paper, we examine factors influencing the choice between tracking stocks and minority carve-outs and their performances. We expand the research in this field by incorporating a fa ctor that was largely ignored in extant literature: managerial entrenchment. We find that the following firms have a greater tendency to choose tracking stocks over carve-outs: firms with a tendency to increase executive pays--especially those in the form of subsidiary stocks, firms that are more tightly controlled by their executives, and firms with greater financial strength prior to restructuring. The former two are consistent with our conjecture that managerial entrenchment plays a role in the choice between tracking stocks and carve-outs. The latter result is consistent with our other hypothesis that prior financial strength influences the decision. Equally important findings are that both are characterized by poor long-term performances and that tracking stocks\u27 performances are on average inferior to those of carve-outs. Evidence suggests that these sub-par performances can be partially attributable to managerial entrenchment

Factors explaining the results of job search by the 2002 FMA job applicants--a survey

We perform an online survey of candidates, who listed their resume on the 2002 FMA website, seeking finance faculty positions. The response rate is approximately 50 percent. Consistent with Bertin, Prather, and Zivney (1999), we find that the new hire market for finance professors continues to shrink and salary range continues to widen. The factors significantly affecting the success rate in the job market are: having Ph.D./DBA in Finance/Financial Economics, having dissertation defended, having worked as a GA, being a female, and being a US citizen/permanent resident. Being a female candidate or an appointment at an accredited college are associated with higher salaries. The number of FMA interviews and the number of campus visits too have positive relation with salaries. It appears that the market condition has changed since the Bertin, Prather, and Zivney (1999) study, as we find that US citizens and permanent residents have more success (than non-US citizens) in obtaining jobs and a female candidate has greater chances in securing a job with higher salary than her male counterpart

Examining the Choice Between Tracking Stocks and Minority Carve-out and Their Relative Performances

In this paper, we examine factors influencing the choice between tracking stocks and minority carve-outs and their performances. We expand the research in this field by incorporating a fa ctor that was largely ignored in extant literature: managerial entrenchment. We find that the following firms have a greater tendency to choose tracking stocks over carve-outs: firms with a tendency to increase executive pays--especially those in the form of subsidiary stocks, firms that are more tightly controlled by their executives, and firms with greater financial strength prior to restructuring. The former two are consistent with our conjecture that managerial entrenchment plays a role in the choice between tracking stocks and carve-outs. The latter result is consistent with our other hypothesis that prior financial strength influences the decision. Equally important findings are that both are characterized by poor long-term performances and that tracking stocks\u27 performances are on average inferior to those of carve-outs. Evidence suggests that these sub-par performances can be partially attributable to managerial entrenchment

How Norwegian Managers View Dividend Policy

We report the results of a 2004 survey from managers of dividend-paying Norwegian firms listed on the Oslo Stock Exchange about their views on dividend policy. Specifically, we identify the most important factors in making dividend policy decisions and managers\u27 views about various dividend-related issues. The most important determinants of a firm\u27s dividend policy are the level of current and expected future earnings, stability of earnings, current degree of financial leverage, and liquidity constraints. No significant correlation exists between the overall rankings of factors influencing dividend policy between Norwegian and U.S. managers. Norwegian managers express mixed views about whether a firm\u27s dividend policy affects firm value. Respondents point to the possible role of dividend policy as a signaling mechanism. No support exists for the tax-preference explanation for paying dividends

Distributing excess cash: the role of specially designated dividends

This study explores why firms distribute excess cash as specially designated dividends (SDDs) instead of using regular dividends or repurchasing shares. We survey top managers of NASDAQ, AMEX, and NYSE firms issuing at least one SDD between 1994 and 2001. The results show that firms tend to pay SDDs when they experience strong earnings and cash flows and want to increase at least temporarily the yield to shareholders. Having strong earnings and cash flows also provide an impetus for regular dividend increases, but paying regular dividends is part of a firm\u27s standard dividend policy. The primary motives for repurchasing shares are to take advantage of perceived market undervaluation of the firm\u27s shares and to improve performance measures, especially. Overall, the results lend support to the signaling explanation for the disbursement of excess funds, but not the free cash flow or wealth transfer explanations