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Paper Spotlight: The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID

Governments all over the world have responded to the COVID-19 outbreak by closing down significant parts of their economies, leading to a liquidity crisis for many firms. Default risk increased because firms’ stream of cash flows took a hit, and with it firms’ rollover risk. How did firms behave in their bid to shore up their precarious liquidity positions? In the paper “The Risk of Being a Fallen Angel and… Read More »Paper Spotlight: The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID

Forthcoming Papers

“Economic-state Variation in Uncertainty-Yield Dynamics” by Robert Connolly, David Dubofsky, and Chris Stivers “A Tale of Two Crises: The 2008 Mortgage Meltdown and the 2020 COVID-19 Crisis” by Chester Spatt

Editor’s Choice 33(9)

The Editor’s Choice article for 33(9) is “Initial Coin Offerings: Financing Growth with Cryptocurrency Token Sales” by Sabrina T. Howell, Marina Niessner, and David Yermack. You can read the paper free online.

Forthcoming Papers

“COVID-19 and the Cross-Section of Equity Returns: Impact and Transmission” by Lorenzo Bretscher, Alex Hsu, Peter Simasek, and Andrea Tamoni “Earnings Expectations in the COVID Crisis” by Augustin Landier and David Thesmar

Forthcoming Paper

“Stock Market Information and Innovative Investment in the Supply Chain” by Lantian Liang, Ryan Williams, and Steven Chong Xiao

Paper Spotlight: Corporate Innovation and Returns

Here is an interesting fact that spans corporate finance and asset pricing: among U.S. public firms, innovation is mostly concentrated in a very small group of large corporations, and innovation “leaders” experience lower systematic risk than the “laggards.” Jan Bena and Lorenzo Garlappi, in their paper “Corporate Innovation and Returns,” investigate this fact by, first, proposing a winner-takes-all patent-race model, and then empirically showing that a firm’s expected return decreases… Read More »Paper Spotlight: Corporate Innovation and Returns

Forthcoming Paper

“A First Look at the Impact of COVID-19 on Commercial Real Estate Prices: Asset-Level Evidence” by David Ling, Chongyu Wang, and Tingyu Zhou

Itay Goldstein in ABC News

Itay Goldstein was interviewed for an ABC News story titled “Why the stock market is divorced from the pain of a pandemic economy.”

Invitation to Bid: SFS Cavalcade

The Society for Financial Studies invites bids to host SFS Cavalcade North America 2022. Please see the Invitation to Bid for details. The deadline for bids is November 1, 2020.

Forthcoming Papers

“Coronavirus: Impact on Stock Prices and Growth Expectations” by Niels J. Gormsen and Ralph S.J. Koijen “Mutual Fund Performance and Flows During the COVID-19 Crisis” by Lubos Pastor and Matthew Blair Vorsatz