Diversifying finance research: From financialization to sustainability

This paper seeks to overcome the apparent contradictions between global demand for sustainability and the structure of conventional financial discourse by putting forth a strategy for diversifying academic finance. It comprises four sections. I first situate academic finance within the broader spectrum of social sciences and highlight its ontological, epistemological and methodological assumptions. Second, I show that these assumptions, taken for granted within the field of finance, are the object of much debate within other fields – as is demonstrated by controversy regarding logical positivism, social ontology and performativity – which brings out the limitations of paradigmatic unity in finance. Third, I characterize diversification in finance with reference to the nested epistemological structure of scientific discourse. I argue that diversification is a process by which (i) finance research is extended to other existing paradigms in social sciences; (ii) new research metaphors are developed within the current paradigm; and (iii) puzzle-solving robustness is achieved. Fourth, I develop a research agenda for the diversification of academic finance. This agenda is broken down into themes, paradigmatic hypotheses, and research questions.     

面向可持续发展的财务学:困境与出路

环境问题已经成为各个学科研究的一个热点问题,但有关环境问题的财务学探讨无论是理论还是实践都较为薄弱,滞后于我国目前提出的可持续发展的战略目标。传统财务学在处理环境问题、促进可持续发展方面正面临困境,可持续发展对财务学提出了新的要求,将环境因素纳入财务学,构建可持续发展导向的财务学路径对于改善生态环境,实现社会、企业和环境的协调发展具有重要意义。     

Review of Categorical Models for Classification Issues in Accounting and Finance

Recent studies have extensively used the logit or probit models for classification problems in accounting and finance. More than 289 articles in prestigious journals have used these or similar methods from 1989 through 1996. This paper reviews several categorical techniques and compares the performance of logit or probit with alternative procedures. Intuitive and mathematical explanations of how the models examined differ in terms of underlying assumptions and other attributes are provided. The alternative techniques are applied to two substantive research questions: predicting bankruptcy and auditors' consistency judgements. Four empirical criteria provide some evidence that the exponential generalized beta of the second kind (EGB2), lomit, and burrit (all new to the accounting and finance literature) improve the log-likelihood functions, and the explanatory power, compared with logit and other models. EGB2, lomit and burrit also provide significantly better classifications and predictions than logit and other techniques.     

OF MESSINESS, SYSTEMS AND SUSTAINABILITY: TOWARDS A MORE SOCIAL AND ENVIRONMENTAL FINANCE AND ACCOUNTING

This essay is a personal attempt at a re-visitation and re-consideration of a number of the fundamental questions which underlie accounting and finance but which only rarely receive explicit consideration. Social and environmental accounting has been the principal focus of my research interests since I became an academic and the subject was, indeed, the primary reason I became an academic in the first place. A concern with social and environmental accounting automatically forces one to raise basic questions about (what is conventionally thought of as) accounting and finance—its foundations, its purposes, its assumptions. In trying to answer those questions one comes to see all of accounting and finance in different ways—both in terms of what it assumes about the world and what it can potentially do for the world. This paper seeks to clarify some of the ways in which conventional accounting and finance and social and environmental accounting (and finance) can be in harmony. However, the principle purpose of the paper is to suggest that many of our ghettos, our internecine squabbles and our misunderstandings are trivial when compared with the essential question of what we place at the centre of our teaching and scholarship. At the core of accounting and finance is a truly fundamental conflict between sustainability and modern international financial capitalism. Our choices between these are likely to be a great deal more than matters of methodological nicety or intellectual convenience. Social and environmental accounting (and finance) offer a way to recover a moral and productive accounting and finance that places survival of the species at its very heart.     

TIME DIVERSIFICATION: AN ESSAY ON THE NEED TO REVISIT FINANCE THEORY

In 1985 Findlay and Williams offered a cogent critique of mainstream finance theory and of the need to revisit its framework of assumptions. They argued that the assumptions of the mainstream finance theory are manifestly contradicted by observation. They further contended that in the field of finance the basic positivist notion that ”assumptions do not matter if the model works” has been subverted into the notion that “assumptions cannot be criticised so long as the model cannot be shown not to work”. They predicted that since many models cannot be rejected, this posture could only lead to intellectual stalemate between supporters of opposing models. In spite of this prediction they offered no concrete examples of the types of stalemate that might develop; instead they addressed the whole field of finance and consequently their criticisms and recommendations were very general in nature.$PThe purpose of this essay is to provide a detailed analysis of the specific issue of time diversification in investment as an example of an intellectual stalemate between prominent academics employing the mainstream approach to finance theory and the majority of investment practitioners. The intention is to use this example as an illustration of the need to revisit the arguments of Findlay and Williams and the underlying framework of mainstream finance theory. In conclusion, in the spirit of Findlay and Williams, the important example of time diversification offers firm evidence of the need to revisit finance theory and to adopt a more behavioural stance towards its development.     

Capital structure theory: Reconsidered

In the mainstream of the academic field of finance, the Modigliani and Miller's (1958) proof of capital structure irrelevance theory, has been praised as the cornerstone of modern scientific finance. However, the capital structure irrelevance theory is based on a set of assumptions, which are both unrealistic and contradictory to the main assumption of the mainstream academic finance. This paper shows that by making more appropriate assumptions, capital structure becomes relevant. The paper, on a foundational ground, argues that since the results of sophisticated mathematical models change as soon as their underlying assumptions are changed, the claim about the scientific nature of the mainstream academic finance becomes questionable.     

A reading guide for last passage times with financial applications in view

In this survey on last passage times, we propose a new viewpoint which provides a unified approach to many different results which appear in the mathematical finance literature and in the theory of stochastic processes. In particular, we are able to improve the assumptions under which some well-known results are usually stated. Moreover we give some new and detailed calculations for the computation of the distribution of some large classes of last passage times. We have kept in this survey only the aspects of the theory which we expect potentially to be relevant for financial applications.     

True Markowitz or assumptions we break and why it matters

Markowitz (1952, 1959) underlies modern corporate finance literature, from modern portfolio theory, option theory, to risk management (especially value at risk type methodologies). From it, Diversify has entered all languages, such is its power. Terms such as “the only free lunch” have become a way to give praise to Markowitz work. And, just as with all fundamental breakthroughs in the literature it has been extended many directions, sometimes not necessarily to the benefit of the original work, which often gets blamed when one rendition or another breaks down. With almost every MBA graduated believing they know what Markowitz optimization or portfolio theory means, it behooves us to step back and look at some of the basics, the assumptions that are made, the costs of breaking assumptions, and the potential disasters that can occur when those basics behind all of the theories dependent upon Markowitz' original work are ignored.This paper lays out many of the basic underlying assumptions behind creation of Markowitz type portfolios, why they matter, and where those assumptions are ignored and/or broken. Breaking model assumptions is common in actual application of theory. Not understanding the implications of broken assumptions is almost a guarantee of failure for a money manager; it is just a matter of time. As one often hears, “Wall Street (or the City if in Europe) is littered with great ideas that do not work in practice.” Some people throw Markowitz and portfolio optimization into that litter bin. We discuss several basic assumptions of modern portfolio theory, when and why they are commonly broken by the best of us in academia and in practice, and discuss the implications for breaking them under trying circumstances.     

THE IMPACT OF ACCOUNTING RESEARCH ON FINANCE

This paper assesses the impact of accounting research on finance using citational methods and content analysis. The data are 715 articles published in seven finance journals. In contrast to previous research of the influence of finance research on accounting, the results show relatively little impact of accounting research on finance. The limited impact of accounting on finance is principally provided by four accounting journals and a small group of accounting authors. The impact found is often the result of bridging papers, in which either finance articles have accounting authors, or vice versa. These results suggest a substantial disregard of ostensibly pertinent capital-markets accounting research by finance scholars. The reasons for finance’s disregard of this work, whether for reasons of perceived value, quality, or for other reasons, is unclear. However, it is apparent that accounting capital-markets research is not as influential in finance as might be expected.     

政府在应对巨灾风险中的角色定位

当今世界,巨灾事故频发,各国政府为应对巨灾风险相继建立了巨灾风险保障制度,但是这些制度在运营过程中出现了一些问题,使得政府的投入与预想的效果相差甚远.本文重点分析了政府在参与应对巨灾风险组建巨灾保障制度的过程中,常用手段的利弊及遭遇的问题,以此来探讨政府在对应巨灾风险中应确立的合适角色定位.     

Wealth dynamics and a bias toward momentum trading

Evolutionary metaphors have been prominent in both economics and finance. They are often used as basic foundations for rational behavior and efficient markets. Theoretically, a mechanism which selects for rational investors requires many caveats, and is far from generic. This paper tests wealth based evolution in a simple, stylized agent-based financial market. The setup borrows extensively from current research in finance that considers optimal behavior with some amount of return predictability. In the case of utility functions which differ from log, wealth selection alone converges to parameters which are economically far from the optimal forecast parameters. This serves as a strong reminder that wealth selection and utility maximization are not the same thing. Therefore, suboptimal financial forecasting strategies may be difficult to drive out of a market, and may even do quite well for some time.     

Peer effects in financial economics: A literature survey

The paper reviews the growing literature on peer effects in finance from theoretical and empirical viewpoints. In particular, we assess the importance of peer behavior on firms’ financial policies, analyze the channels through which they operate, and gauge their magnitude. We particularly review empirical works on herding and peer effects in two subfields of finance: corporate finance and the financial markets. We also discuss the results of many relevant peer-reviewed academic studies and provide research and policy implications. The main conclusion is that peer effects are important in shaping investor and firm decisions. The most critical problem in the peer effect literature is employing an identification strategy to ensure that results are not driven by endogeneity. The paper also discusses ways to address this identification issue and provides a future research agenda.     

Machine learning methods in finance: Recent applications and prospects

We study how researchers can apply machine learning (ML) methods in finance. We first establish that the two major categories of ML (supervised and unsupervised learning) address fundamentally different problems than traditional econometric approaches. Then, we review the current state of research on ML in finance and identify three archetypes of applications: (i) the construction of superior and novel measures, (ii) the reduction of prediction error, and (iii) the extension of the standard econometric toolset. With this taxonomy, we give an outlook on potential future directions for both researchers and practitioners. Our results suggest many benefits of ML methods compared to traditional approaches and indicate that ML holds great potential for future research in finance.     

Financial Accounting Research,Practice, and Financial Accountability

Financial accounting is essential to financial accountability, which is essential to a prosperous society. There are many examples of how improvements to financial accounting, supported by research, have enhanced financial accountability. Such research requires a strong relation between accounting academics and practice; this relation has ebbed and flowed during the life of Abacus. The relation seems to ebb when accounting academics embrace related fields and flows when the relevance to accounting practice emerges. Economics and finance have provided new perspectives and meaningful insights about the information investors need to make informed decisions. Regardless, there are many intriguing and open questions awaiting accounting research that can provide insights into how financial accounting—and thus financial accountability—can be improved. The future is bright for financial accounting researchers who do research relevant to accounting practice and want to contribute to a prosperous society.     

从行为金融学视角出发的投资心理考量

行为金融学的应用价值,在于把心理学和金融学问题结合起来,实现对人的行为的预测和改造,解决诸多用标准金融理论难以解决的投资决策问题.研究行为金融学可以发现投资者对新信息的过度反应或者反应不足的情况,从而找出适当的投资策略.行为金融学它不仅是对传统金融学理论的革命,也是对传统投资决策范式的修正.     

Sustainable finance and blockchain: A systematic review and research agenda

Sustainable finance and blockchain studies have garnered considerable interest recently. but there has been no systematic analysis of blockchain in sustainable finance to far. To fill this gap, based on the theme structure of blockchain research in the field of renewable finance from November 1, 2008 to January 31, 2022, this paper proposes a multi-level and all-round comprehensive bibliometric method (Co-occurrence Analysis method, Natural Language Processing method, and Exploratory Factor Analysis method) to comprehend the mode, process, and mechanism of the integration of them. The findings indicate that: (1) Blockchain has been widely used in many industries involved in sustainable finance; (2) Blockchain will have a long-term impact on Sustainable Finance in the fields of smart city and sharing economy; (3) Blockchain can be deeply integrated with other technologies to promote the diversified development of sustainable finance. Additionally, we highlight trends and research directions regarding blockchain in sustainable finance research.     

绿色金融促进了中国出口贸易发展吗?

金融发展如何影响国际贸易增长一直是贸易领域的重要研究话题。本文以原中国银行业监督管理委员会2012年对外公布的《绿色信贷指引》政策为准自然实验,采用双重差分法对绿色金融与中国出口贸易发展之间的因果关系进行识别。研究显示,绿色金融能够显著促进中国出口贸易发展,改善出口贸易的集约边际和扩展边际,优化出口贸易的量价结构;绿色金融带来的出口促进作用,就不同的样本分类存在异质性。渠道研究发现,绿色金融能够通过缓解出口方面临的融资约束水平,进而对出口贸易产生积极作用。稳健性检验表明,在考虑双重差分法设定条件、安慰剂检验、极端值影响、零贸易问题等后,绿色金融对出口贸易的积极作用依然成立。本文研究证实了绿色金融是影响中国出口增长的重要因素,绿色金融政策能够带来生态环境改善和出口贸易发展的双赢局面,这为中国近年来大力推进绿色金融体系构建提供了来自现实层面的有效证据。     

Meta-analysis in finance research: Opportunities,challenges, and contemporary applications

The number of empirical research studies in finance exhibits a strong upward trajectory, which often produces large differences in empirical results and impedes the drawing of consistent conclusions in relation to the phenomenon under examination. This creates demand for methods like meta-analysis that objectively consolidate and evaluate the empricial literature in a research field. Meta-analysis is a group of statistical methods to aggregate prior empirical studies, to discover and explain consistencies as well as inconsistencies within reported results, and to detect and filter out distorting effects from publication selection or model misspecification. While meta-analysis is a standard tool for research synthesis and evidence-based decisions in many related research disciplines, such as management, marketing, or economics, it has been rarely applied in finance. The goal of this article is to provide a comprehensive overview and discussion of the opportunities of meta-analytical research in finance, to present recent applications of meta-analysis in finance, as well as to discuss related challenges and limitations. Thereby, we aim at increasing the awareness and acceptance of meta-analysis and stimulating its future application in the finance field.     

税负归宿问题研究趋势与展望

从西方财政学的视角来看,要确定某项税收的归宿到底有多少,是一个非常复杂和困难的问题,也正因为如此,在西方财政学及公共经济学领域,税负归宿理论的研究一直吸引着众多学者为之付出不懈的努力,本文对西方各大学派的税负归宿（Incidence Tax）思想进行了梳理和总结。在此基础上,对我国近年来的税负归宿理论思想进行分析,通过国内外对比研究,揭示国内研究的局限性,并在此基础上提出研究展望。