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Article Type: Guest editorial From: Managerial Finance, Volume 36, Issue 6.
The second special issue of Managerial Finance showcases some of the papers presented at the 23rd Annual Meeting of the Academy of Finance, Chicago, Illinois, USA from March 18-20, 2009.
The Academy of Finance was formed in 1987 under the administrative umbrella of the Midwest Business Administration Association. Over the years, the Academy has grown and prospered, attracting authors from 43 states and over ten different countries. The Journal of the Academy of Finance (JAF) is the peer reviewed Cabell listed JAF. The 2009 Academy of Finance Program contained 81 papers and a number of panels and special sessions.
The papers in this special issue of Managerial Finance underwent a standard double blind, peer-review process where two or more reviews were completed for each paper. The Guest Editor, with inputs from eight members of JAF Editorial Board, made the final selections.
The articles in this issue are empirical in nature and generally provide practical implications for investments and risk management. We begin with the contribution from Joan C. Junkus and Thomas C. Berry that deals with funds related to socially responsible (SR) investments. They find that the typical SR investor is a single female and more likely to be better educated than their non-SR counterparts. Thomas M. Krueger, Mark A. Wrolstad, and Shane Van Dalsem show that in the aggregate firm reputations are pro-cyclical, and firms with improved reputations enjoy lower volatility in their stock prices than firms with diminished reputations. Tarek S. Zaher compares the performance of portfolios of debt free firms to comparable portfolios of leveraged firms. The results of the study show that investors generally reward debt-free firms, and penalize firms that have high levels of debt.
Iryna O. Depenchuk, William S. Compton, and Robert A. Kunkel examine the market returns of the Ukrainian stock and bond markets to determine whether they exhibit calendar anomalies including the January effect, weekend effect, and turn-of-the-month (TOM) effect. They found evidence of TOM effect, and did not find January effect or the weekend effect in the Ukrainian stock and bond markets. Chu-Sheng Tai looked at the link of exchange rate changes and pricing of foreign exchange risk in a domestic context. His strong empirical evidence implies that corporate currency hedging is justifiable as this will stabilize cash flows for a firm and reduce its cost of capital.
David Basterfield, Thomas Bundt, and Kevin Nordt move away from financial market and apply risk management models to the electricity market. Their research finds a useful role for Stable distributions in commercial risk management applications. So far such applications are absent in the electricity market. Finally, the important topic of market alliance and shareholder's wealth has been explored by Foo-Nin Ho, Allan D. Shocker, and Yewmun Yip. They show that marketing alliances create value for shareholders and small cap firms benefit the most from forming a marketing alliance, especially with a large partner.
I hope you enjoy the practical contributions in this issue of Managerial Finance.
Monzurul HoqueSaint Xavier University, Chicago, Illinois, USA