The Journal of Finance publishes leading research across all the major fields of finance. It is one of the most widely cited journals in academic finance, and in all of economics. Each of the six issues per year reaches over 8,000 academics, finance professionals, libraries, and government and financial institutions around the world. The journal is the official publication of The American Finance Association, the premier academic organization devoted to the study and promotion of knowledge about financial economics.
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Business Networks, Corporate Governance, and Contracting in the Mutual Fund Industry
Published: 09/28/2009 | DOI: 10.1111/j.1540-6261.2009.01498.x
CAMELIA M. KUHNEN
Business connections can mitigate agency conflicts by facilitating efficient information transfers, but can also be channels for inefficient favoritism. I analyze these two effects in the mutual fund industry and find that fund directors and advisory firms that manage the funds hire each other preferentially based on the intensity of their past interactions. I do not find evidence that stronger board‐advisor ties correspond to better or worse outcomes for fund shareholders. These results suggest that the two effects of board‐management connections on investor welfare—improved monitoring and increased potential for collusion—balance out in this setting.
Asymmetric Learning from Financial Information
Published: 10/27/2014 | DOI: 10.1111/jofi.12223
CAMELIA M. KUHNEN
This study asks whether investors learn differently from gains versus losses. I find experimental evidence that indicates that being in the negative domain leads individuals to form overly pessimistic beliefs about available investment options. This pessimism bias is driven by people reacting more to low outcomes in the negative domain relative to the positive domain. Such asymmetric learning may help explain documented empirical patterns regarding the differential role of poor versus good economic conditions on investment behavior and household economic choices.
Noncognitive Abilities and Financial Delinquency: The Role of Self‐Efficacy in Avoiding Financial Distress
Published: 09/23/2018 | DOI: 10.1111/jofi.12724
CAMELIA M. KUHNEN, BRIAN T. MELZER
We investigate a novel determinant of financial distress, namely, individuals' self‐efficacy, or belief that their actions can influence the future. Individuals with high self‐efficacy are more likely to take precautions that mitigate adverse financial shocks. They are subsequently less likely to default on their debt and bill payments, especially after experiencing negative shocks such as job loss or illness. Thus, noncognitive abilities are an important determinant of financial fragility and subjective expectations are an important factor in household financial decisions.