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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Search results: 5.
Market Making Contracts, Firm Value, and the IPO Decision
Published: 9/3/2015, Volume: 70, Issue: 5 | DOI: 10.1111/jofi.12285 | Cited by: 62
HENDRIK BESSEMBINDER, JIA HAO, KUNCHENG ZHENG
We examine the effects of secondary market liquidity on firm value and the IPO decision. Competitive aftermarket liquidity provision is associated with reduced welfare and a discounted secondary market price that can dissuade IPOs. The competitive market fails in particular for firms or at times when uncertainty regarding fundamental value and asymmetric information are large in combination. In these cases, firm value and welfare are improved by a contract where the firm engages a designated market maker to enhance liquidity. Such contracts represent a market solution to a market imperfection, particularly for small, growth firms.
Is Money Smart? A Study of Mutual Fund Investors' Fund Selection Ability
Published: 6/1999, Volume: 54, Issue: 3 | DOI: 10.1111/0022-1082.00131 | Cited by: 536
Lu Zheng
A previous study finds evidence to support selection ability among active fund investors for equity funds listed in 1982. Using a large sample of equity funds, I find evidence that funds that receive more money subsequently perform significantly better than those that lose money. This effect is short‐lived and is largely but not completely explained by a strategy of betting on winners. In the aggregate, there is no significant evidence that funds that receive more money subsequently beat the market. However, it is possible to earn positive abnormal returns by using the cash flow information for small funds.
Can Small Businesses Survive Chapter 11?
Published: 8/19/2026, Volume: , Issue: | DOI: 10.1111/jofi.70076 | Cited by: 0
EDITH HOTCHKISS, BENJAMIN IVERSON, XIANG ZHENG
A majority of small U.S. businesses attempting to reorganize in bankruptcy fail to do so. Subchapter V of Chapter 11 (SubV) streamlines bankruptcy for small firms by reducing bankruptcy costs and negotiation frictions, and enables entrepreneurs to retain ownership. We show that many businesses reorganize under SubV that otherwise would liquidate. Creditor recoveries and postbankruptcy survival rates are at least as high in SubV as in traditional Chapter 11s. Our results show the increase in reorganizations is not associated with continuation of unviable firms, and that creditors are not harmed by a shift in bargaining power toward small business owners.
On the Industry Concentration of Actively Managed Equity Mutual Funds
Published: 8/2005, Volume: 60, Issue: 4 | DOI: 10.1111/j.1540-6261.2005.00785.x | Cited by: 938
MARCIN KACPERCZYK, CLEMENS SIALM, LU ZHENG
Mutual fund managers may decide to deviate from a well‐diversified portfolio and concentrate their holdings in industries where they have informational advantages. In this paper, we study the relation between the industry concentration and the performance of actively managed U.S. mutual funds from 1984 to 1999. Our results indicate that, on average, more concentrated funds perform better after controlling for risk and style differences using various performance measures. This finding suggests that investment ability is more evident among managers who hold portfolios concentrated in a few industries.
Tax‐Loss Selling and the January Effect: Evidence from Municipal Bond Closed‐End Funds
Published: 12/2006, Volume: 61, Issue: 6 | DOI: 10.1111/j.1540-6261.2006.01011.x | Cited by: 84
LAURA T. STARKS, LI YONG, LU ZHENG
This paper provides direct evidence supporting the tax‐loss selling hypothesis as an explanation of the January effect. Examining turn‐of‐the‐year return and volume patterns for municipal bond closed‐end funds, which are held mostly by tax‐sensitive individual investors, we document a January effect for these funds, but not for their underlying assets. We provide evidence that this effect can be largely explained by tax‐loss selling activities at the previous year‐end. Moreover, we find that funds associated with brokerage firms display more tax‐loss selling behavior, suggesting that tax counseling plays a role.