Pub Date : 2025-02-17DOI: 10.1016/j.jfi.2025.101143
Franklin Allen , João A.C. Santos
{"title":"Introduction to virtual special issue in honor of Douglas Gale","authors":"Franklin Allen , João A.C. Santos","doi":"10.1016/j.jfi.2025.101143","DOIUrl":"10.1016/j.jfi.2025.101143","url":null,"abstract":"","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"62 ","pages":"Article 101143"},"PeriodicalIF":3.1,"publicationDate":"2025-02-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143419456","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-11DOI: 10.1016/j.jfi.2025.101141
Syngjoo Choi , Marco Cipriani , Antonio Guarino , Shachar Kariv
{"title":"Douglas Gale’s contribution to social learning, decision under risk and uncertainty, monotone games and networks","authors":"Syngjoo Choi , Marco Cipriani , Antonio Guarino , Shachar Kariv","doi":"10.1016/j.jfi.2025.101141","DOIUrl":"10.1016/j.jfi.2025.101141","url":null,"abstract":"","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"62 ","pages":"Article 101141"},"PeriodicalIF":3.1,"publicationDate":"2025-02-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143437006","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-02-06DOI: 10.1016/j.jfi.2025.101139
Piero Gottardi
{"title":"Douglas Gale’s contribution to bargaining and markets","authors":"Piero Gottardi","doi":"10.1016/j.jfi.2025.101139","DOIUrl":"10.1016/j.jfi.2025.101139","url":null,"abstract":"","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"62 ","pages":"Article 101139"},"PeriodicalIF":3.1,"publicationDate":"2025-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143373105","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-30DOI: 10.1016/j.jfi.2025.101142
Ernst-Ludwig von Thadden
No abstract required
{"title":"Douglas Gale's contribution to money and equilibrium","authors":"Ernst-Ludwig von Thadden","doi":"10.1016/j.jfi.2025.101142","DOIUrl":"10.1016/j.jfi.2025.101142","url":null,"abstract":"<div><div>No abstract required</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"62 ","pages":"Article 101142"},"PeriodicalIF":3.1,"publicationDate":"2025-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143101396","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-01DOI: 10.1016/j.jfi.2024.101121
Gur Huberman , Rafael Repullo
We present a model of the maturity of a bank’s uninsured debt. The bank borrows to invest in a long-term asset with endogenous and nonverifiable risk. This moral hazard problem leads to excessive risk-taking. Short-term debt may have a disciplining effect on risk-taking, but it may lead to overborrowing and/or inefficient liquidation. We characterize the conditions under which short- and long-term debt are feasible, and show circumstances where only short-term debt is feasible and where short-term debt dominates long-term debt when both are feasible. The results are consistent with some features of the period preceding the 2007-2009 global financial crisis.
{"title":"Moral hazard and debt maturity","authors":"Gur Huberman , Rafael Repullo","doi":"10.1016/j.jfi.2024.101121","DOIUrl":"10.1016/j.jfi.2024.101121","url":null,"abstract":"<div><div>We present a model of the maturity of a bank’s uninsured debt. The bank borrows to invest in a long-term asset with endogenous and nonverifiable risk. This moral hazard problem leads to excessive risk-taking. Short-term debt may have a disciplining effect on risk-taking, but it may lead to overborrowing and/or inefficient liquidation. We characterize the conditions under which short- and long-term debt are feasible, and show circumstances where only short-term debt is feasible and where short-term debt dominates long-term debt when both are feasible. The results are consistent with some features of the period preceding the 2007-2009 global financial crisis.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"61 ","pages":"Article 101121"},"PeriodicalIF":3.1,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143141067","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-01DOI: 10.1016/j.jfi.2024.101119
Jianan Lu , Wenxuan Hou , Brian G.M. Main
Using the case of the pogroms that took place in the historical region of the 'Pale of Settlement' in Eastern Europe, this paper analyzes the cultural legacy of ethnic violence and its long-term economic impact on access to finance and on corporate innovation. We find that firms in regions with a higher historical intensity of ethnic persecution face greater financial constraints, relying more on internal finance and experiencing reduced access to external finance. These financial limitations are linked to sluggish innovation activities among present-day firms. We propose that a mechanism of financial antipathy, rooted in a persistent anti-market culture fostered by historical ethnic animosity, explains these effects and reflects a long-term degradation of local social capital. Our results are supported by causal evidence using instrumental variables based on the precursors of historical inter-ethnic violence. The animosity and discrimination against the minority group appear to transfer to the broader economic activities in which that group was involved, creating lasting economic consequences for the majority population – consequences that continue to affect financial development and innovation to the present day.
{"title":"The cultural legacy of historical ethnic violence: The impact on access to finance and innovation","authors":"Jianan Lu , Wenxuan Hou , Brian G.M. Main","doi":"10.1016/j.jfi.2024.101119","DOIUrl":"10.1016/j.jfi.2024.101119","url":null,"abstract":"<div><div>Using the case of the pogroms that took place in the historical region of the 'Pale of Settlement' in Eastern Europe, this paper analyzes the cultural legacy of ethnic violence and its long-term economic impact on access to finance and on corporate innovation. We find that firms in regions with a higher historical intensity of ethnic persecution face greater financial constraints, relying more on internal finance and experiencing reduced access to external finance. These financial limitations are linked to sluggish innovation activities among present-day firms. We propose that a mechanism of financial antipathy, rooted in a persistent anti-market culture fostered by historical ethnic animosity, explains these effects and reflects a long-term degradation of local social capital. Our results are supported by causal evidence using instrumental variables based on the precursors of historical inter-ethnic violence. The animosity and discrimination against the minority group appear to transfer to the broader economic activities in which that group was involved, creating lasting economic consequences for the majority population – consequences that continue to affect financial development and innovation to the present day.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"61 ","pages":"Article 101119"},"PeriodicalIF":3.1,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143141068","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-01DOI: 10.1016/j.jfi.2024.101132
Xunhua Su , Donghang Zhang , Xiaoyu Zhang
We provide novel evidence on the loan market benefits of high IPO underpricing. We show that greater underpricing is associated with a significantly larger within-firm reduction of post-IPO borrowing costs. This benefit of underpricing is less pronounced for firms with high ex-ante information asymmetry and is concentrated in firms with a high demand for advertisements. In addition, neither price revision before the IPO nor the short-term or long-term stock return after the IPO has a similar effect. Our results suggest that underpricing affects borrowing costs through an attention channel and highlight a real economic effect of underpricing from the loan market.
{"title":"Loan market benefits of (High) IPO underpricing","authors":"Xunhua Su , Donghang Zhang , Xiaoyu Zhang","doi":"10.1016/j.jfi.2024.101132","DOIUrl":"10.1016/j.jfi.2024.101132","url":null,"abstract":"<div><div>We provide novel evidence on the loan market benefits of high IPO underpricing. We show that greater underpricing is associated with a significantly larger within-firm reduction of post-IPO borrowing costs. This benefit of underpricing is less pronounced for firms with high ex-ante information asymmetry and is concentrated in firms with a high demand for advertisements. In addition, neither price revision before the IPO nor the short-term or long-term stock return after the IPO has a similar effect. Our results suggest that underpricing affects borrowing costs through an attention channel and highlight a real economic effect of underpricing from the loan market.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"61 ","pages":"Article 101132"},"PeriodicalIF":3.1,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143141069","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-01-01DOI: 10.1016/j.jfi.2024.101123
Diemo Dietrich , Thomas Gehrig
In standard banking models a demand for liquidity arises because investors want to take precautions against sudden consumption needs. It has long been taken for granted that banks’ maturity transformation is because they insure against such risk, exposing them to crises and justifying bank regulation. We show that if a demand for liquidity arises additionally for another important reason, their co-existence substantially alters equilibrium outcomes. Specifically, we introduce investors who want to preserve flexibility in case better investment opportunities arrive later. We show that (1) there is no maturity transformation if the funding liquidity of new investment opportunities is not sufficiently limited, (2) equilibria in models that consider only a single reason for liquidity demand are not necessarily robust, (3) an equilibrium in pure strategies in the depositing game may not exist at all.
{"title":"Scope and limits of bank liquidity creation","authors":"Diemo Dietrich , Thomas Gehrig","doi":"10.1016/j.jfi.2024.101123","DOIUrl":"10.1016/j.jfi.2024.101123","url":null,"abstract":"<div><div>In standard banking models a demand for liquidity arises because investors want to take precautions against sudden consumption needs. It has long been taken for granted that banks’ maturity transformation is because they insure against such risk, exposing them to crises and justifying bank regulation. We show that if a demand for liquidity arises additionally for another important reason, their co-existence substantially alters equilibrium outcomes. Specifically, we introduce investors who want to preserve flexibility in case better investment opportunities arrive later. We show that (1) there is no maturity transformation if the funding liquidity of new investment opportunities is not sufficiently limited, (2) equilibria in models that consider only a single reason for liquidity demand are not necessarily robust, (3) an equilibrium in pure strategies in the depositing game may not exist at all.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"61 ","pages":"Article 101123"},"PeriodicalIF":3.1,"publicationDate":"2025-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143097463","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-10-01DOI: 10.1016/j.jfi.2024.101122
Linquan Chen , Yao Chen , Alok Kumar , Woon Sau Leung
Using a novel dataset with daily firm-level ESG information, we examine whether and how active mutual fund managers integrate ESG information into their portfolio decisions. Our results show that managers actively trade on ESG information, leading to improved portfolio performance. This enhanced risk-adjusted return is attributed to the incorporation of ESG information into asset prices rather than to price pressure on green assets. Additionally, fund managers adjust their portfolios to cater to investor demand, especially during periods of heightened ESG awareness. Further, funds located in Democratic states and those with higher ESG ratings exhibit a stronger inclination towards ESG integration.
{"title":"Firm-level ESG information and active fund management","authors":"Linquan Chen , Yao Chen , Alok Kumar , Woon Sau Leung","doi":"10.1016/j.jfi.2024.101122","DOIUrl":"10.1016/j.jfi.2024.101122","url":null,"abstract":"<div><div>Using a novel dataset with daily firm-level ESG information, we examine whether and how active mutual fund managers integrate ESG information into their portfolio decisions. Our results show that managers actively trade on ESG information, leading to improved portfolio performance. This enhanced risk-adjusted return is attributed to the incorporation of ESG information into asset prices rather than to price pressure on green assets. Additionally, fund managers adjust their portfolios to cater to investor demand, especially during periods of heightened ESG awareness. Further, funds located in Democratic states and those with higher ESG ratings exhibit a stronger inclination towards ESG integration.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"60 ","pages":"Article 101122"},"PeriodicalIF":3.1,"publicationDate":"2024-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142699483","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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