Society for Financial Studies


August 28, 2014: RCFS Editor Named An Influential Young Economist

RCFS Editor Amit Seru is featured in the International Monetary Fund’s list of influential young economists, which published in the September 2014 (51/3) issue of Finance & Development. Read the article here. Congratulations Amit!

August 26, 2014: Editor’s Choice: September

The Editor’s Choice article for September 2014 (issue 3/1-2) is “Is the Stock Market Just a Side Show? Evidence from a Structural Reform” by Murillo Campello, Rafael P. Ribas, and Albert Y. Wang. You can read the article free online here.

August 5, 2014: Citation Impact Factor for RCFS

Our publisher, Oxford University Press, has computed the 2013 Citation Impact Factor for RCFS. Had the new journal been indexed by ISI in 2013, RCFS would have an Impact Factor of 1.000.

July 22, 2014: Next Issue of RCFS Mailing Soon!

The finishing touches are being put on the upcoming issue of RCFS, which will mail with the September issue of RFS.

June 30, 2014: Latest Forthcoming Papers

Forthcoming in Volume 3:

Venture Capitalists versus Angels: The Dynamics of Private Firm Financing Contracts“ by Thomas J. Chemmanur  and Zhaohui Chen


Optimal Incentive Contracts and Information Cascades“ by Praveen Kumar and Nisan Langberg.

June 3, 2014: Converting the Archive to HTML with MathJax

The SFS Council voted to pay Oxford University Press to convert the entire archive of RFSRAPS, and RCFS articles into state-of-the-art full text HTML files including equations rendered using the Java-based “MathJax” web standard. The new file format will allow equations (and the rest of the article) to scale from 4-inch screens to 30-inch screens, which will facilitate their use on smartphones, tablets, etc.

May 30, 2014: Best Paper Award

The winner of this year’s RCFS Best Paper Award is:

“Bank Bailout Menus”
Sudipto Bhattacharya and Kjell G. Nyborg
Prize: $10,000

This award was announced at the 2014 Cavalcade.

May 30, 2014: Referee of the Year Award

The winner of this year’s RCFS Referee of the Year Award is:

Amit Seru
Prize: $1000

This award was announced at the 2014 Cavalcade.

May 29, 2014: Upcoming Changes

RCFS announces the retirement of Editor Joshua Rauh. We thank Joshua for his service.

Amit Seru of the University of Chicago will be the incoming Editor. We look forward to having him on our team.

April 21, 2014: Sign Up for RCFS Alerts

Did you know you can sign up to receive email notifications every time an issue of RCFS publishes online or an RCFS article publishes on Advance Access? It’s easy! Create a free account at our publisher’s web site and select the items you’d like to be notified about.

  • For Papers Currently Under Review
  • Turnaround:
    Mean: 42.55 days
    Median: 41 days
    Acceptance Rate:
    (since 8/31/12): 9.9%
  • Citation Impact Factor: 1.000
    Note: This figure was computed by Oxford University Press based on what the impact factor would be if the journal had been indexed by ISI in 2013.
  • Conference Announcements

    2016 SFS Finance Cavalcade
    Bid deadline October 1, 2014

    2015 SFS Finance Cavalcade
    Paper submission period: November 10-December 8, 2014

  • Color Pages

    The RCFS publishes pages in color! You can include figures for free in the online publication on Oxford University's web page. If you want some or all of the figures to appear in color in the printed version as well, there is a service fee of $300 per figure to cover the journal's costs.

  • RSS Feed

    Want to be notified by RSS about new RCFS papers? Visit the RSS information on our publisher's website.

Forthcoming in the RCFS

Venture Capitalists versus Angels: The Dynamics of Private Firm Financing Contracts

by Thomas J. Chemmanur  and Zhaohui Chen
We analyze an entrepreneur’s choice between venture capital (VC) and angel financing at various stages in his firm’s life, and the dynamic evolution of the firm’s financing contract. We consider an entrepreneur with private information about the productivity of his firm, but where the financier (VC or angel) can reduce his information disadvantage as he learns about the firm over time. VCs and angels differ in two ways. First, unlike an angel financier, VCs may exert effort to add value to the firm, and thereby, together with the entrepreneur’s effort, increase the probability of the firm’s success. Second, VC financing is scarce relative to angel financing. The equilibrium VC financing contract maximizes value-addition by ensuring that both the entrepreneur and the VC exert optimal effort. We develop a number of new results regarding the optimal financing path (angel versus VC) of the firm; the differences between angel and VC financing contracts in terms of their fixed-income versus warrant (upside) components; the differences between early stage and later stage VC financing contracts; and the implications of the equilibrium financing path for the firm’s probability of successful exit (IPO or acquisition).

Optimal Incentive Contracts and Information Cascades

by Praveen Kumar and Nisan Langberg
We examine information aggregation regarding industry capital productivity from privately informed managers in a dynamic model with communication-based incentive contracts. When managers enjoy limited liability, information cascades occur almost surely: learning stops when beliefs become endogenously extreme (optimistic or pessimistic) regarding industry productivity. There is no learning if initial beliefs are extreme, or agency conflicts are severe. In contrast to the herding literature, cascades occur even when signals have unbounded precision or there are rich action spaces. Relaxing limited liability constraints is not sufficient to avoid cascades; we provide sufficient conditions for efficient information aggregation through incentive contracts.

Long-term debt and hidden borrowing

by Heski Bar-Isaac, Vicente Cuñat
We consider borrowers with the opportunity to raise funds from both a competitive banking sector, in which information is shared, and an opaque system of hidden lenders, in which information is private. The presence of hidden lenders allows borrowers to conceal poor results from their banks and thus restricts the set of contracts that can be obtained from the banking sector. In equilibrium, borrowers obtain funds from both the banking sector and the inefficient hidden sector simultaneously such that different types of borrowers cannot be distinguished by banks. This lack of transparency generates cross-subsidies between different, observationally equivalent borrowers. We demonstrate that the variety of funding arrangements offered by the banking sector is smaller when the cost of borrowing in the hidden sector is lower. In particular, whereas high costs of hidden borrowing allow each different (viable) type of borrower to access unique terms from the banking sector, as the cost of hidden borrowing falls, an increasing number of borrowers face identical terms up to the point at which all borrowers accessing the banking sector (which may include inefficient borrowers) face identical terms.

Is the Stock Market Just a Side Show? Evidence from a Structural Reform

by Murillo Campello, Rafael P. Ribas, Albert Wang  
The 2005 split-share reform in China mandated the conversion of nontradable stocks into tradable status. This paper examines the effects of stock markets on corporate outcomes exploiting multiple institutional features of the Chinese conversion program. Using a generalized propensity score matching approach, we identify increases in corporate pro…fitability, investment, value, and productivity as a result of the reform. We also identify changes in …firms’ likelihood to issue shares and engage in mergers, as well as changes in dividend and capital structure policies. Our …findings provide insights on the role of stock markets in shaping corporate activity and on the impact of regulation on economic growth.