The Review of Corporate Finance Studies (RCFS) is now accepting manuscripts for consideration for publication.
Under the auspices of the Society of Financial Studies, the RCFS aims to become the premier journal in Corporate Finance, broadly defined by publishing theoretical, empirical, and experimental research of the highest quality.
MARCH 2013 ISSUE
INAUGURAL ISSUE: FALL 2012
March 4, 2013
The Cavalcade program is now available on the Cavalcade page.
February 21, 2013
The March issue of RCFS is now online here.
February 15, 2013
The registration webpage for the 2013 Cavalcade is now online. To register, please visit the Cavalade page.
January 31 , 2013
Check your mailbox! The second issue of RCFS will mail with the March issue of RFS 26(3).
November 9, 2012:
Submissions to the 2013 Cavalcade will be accepted beginning tomorrow, November 10th, through December 15, 2012. To submit, please visit the Cavalcade webpage.
August 29, 2012:
The inaugural issue of The Review of Corporate Finance Studies has mailed.
April 30, 2012:
Please see the Editors' Joint Policy Statement Regarding "Coercive Citations," which has been posted to our website here.
April 9, 2012:
The Society for Financial Studies is pleased to announce that the 2013 SFS Finance Cavalcade will be held at The University of Miami. The society will begin accepting bids on July 1, 2012 for the 2014 SFS Finance Cavalcade.
Forthcoming in the RCFS
Financial Development, Fixed Costs, and International Trade
by Bo Becker (Harvard Business School), Jinzhu Chen (Chinese Academy of Social Sciences), and David Greenberg (BlackRock, Inc.)
Exports require significant up-front costs in product design, marketing and distribution. These are intangible, firm-specific investments that are likely difficult to finance externally. We argue that a developed financial system can therefore facilitate exports. We test this prediction and find support for it. First, financial development is associated with more exports in industries where fixed costs are high as well as to importers that require high costs. Second, trade dynamics are affected by financial development. In countries with better finance, exports are more sensitive to exchange rates. Finally, we predict and document that Countries with more developed finance experience more volatile exports.
Bank Bailout Menus
by Kjell G. Nyborg (University of Zurich, Swiss Finance Institute, CEPR) and Sudipto Bhattacharya (London School of Economics, CEPR)
We study bailouts of banks that suffer from debt overhang problems and have private information about the quality of their assets-in-place and new investment opportunities. Menus of bailout plans are used as a screening device. Worse bank types choose larger bailouts. Constrained-optimality involves overcapitalization of banks and nonlinear pricing (e.g. the bailout agency receives proportionally more shares in larger bailouts). Equity injections and asset buyouts are equivalent when new investments follow the assets. The larger capital outlay involved in asset buyouts can be offset by borrowing against the assets. If investments follow the bank, equity injections offer more upside to the bailout agency than asset buyouts. But upside can damage as well as enhance efficiency, depending on whether screening intensity is needed mostly on assets-in-place or new investments.
A Theory of Arbitrage Capital
by Viral V. Acharya (NYU-Stern, CEPR, and NBER), Hyun Song Shin (Princeton University), and Tanju Yorulmazer (Federal Reserve Bank of New York)
We present a model of equilibrium allocation of capital for arbitrage. If asset prices may fall low enough, it is profitable to carry liquid capital to acquire assets in such states. Set against this, keeping capital in liquid form entails costs in terms of foregone profitable investments. This trade-off generates occasional fire sales and limited arbitrage capital as robust phenomena. With learning-by-doing effects, arbitrage capital moves in to acquire assets only if fire sales are steep. However, once arbitrage capital finds it profitable to acquire assets, it requires similar returns elsewhere, inducing contagious fire-sale prices even for unrelated assets.
Bridging the Gap? Government Subsidized Lending and Access to Capital
by Josh Lerner (Harvard University) and Kristle Romero Cortes (Federal Reserve Bank of Cleveland)
The consequences of providing public funds to financial institutions remain controversial. We examine the Community Development Financial Institution (CDFI) Fund's impact on credit union activity, using hitherto little studied U.S. Treasury data. The CDFI Fund grants increase lending at credit unions by 3%. For every dollar awarded, 45 additional cents are loaned out to borrowers in the first year, and up to an additional $1.60 is loaned out within three years. Delinquent loan rates also increase slightly. Our panel results are supported by a broadband regression discontinuity analysis. Politics does not seem to play a role in allocating funding.