Guest editorial

Citation

Hoque, M. (2012), "Guest editorial", Managerial Finance, Vol. 38 No. 7. https://doi.org/10.1108/mf.2012.00938gaa.001

Guest editorial

Article Type: Guest editorial From: Managerial Finance, Volume 38, Issue 7

This special issue of Managerial Finance showcases some of the papers presented at the 25th Annual Meeting of the Academy of Finance[1], Chicago, Illinois, USA in 2011. These papers underwent a standard double blind peer review process where two or more reviews were completed. Further, the Editorial Board of the Journal of Finance Issues (JFI) conducted a blind review of the short listed articles and recommended these papers for publication.

The selected papers focus on anomaly, diversification, market failure and choice of offerings in the equity markets. In the opening paper Jamshid Mehran, Alex Meisami and John R. Busenbark show that on nine Jewish holidays, the average daily return is approximately 32 times greater than the average daily return on non-holidays using the data from 1990 to 2009 period. Additionally, they show that the character of specific Jewish holidays influences stock market returns, increasing during joyous holidays and decreasing during solemn ones. In contrast Jayen B. Patel finds no anomaly in small firm returns. Specifically, he shows that size premiums are independent of market conditions as they are not significantly different in January over non-January months. The comparative analysis of recent performance of small firms with that of large firms in developed and emerging stock markets reveal that small firms do not generate statistically significant different returns than large firms in recent years. The author concludes that the stock markets do not indicate the size effect, positive or negative.

Yuli Su and Edtya Stepien explore the benefits of international equity portfolios from the perspective of Polish investors. They demonstrate that on an ex post basis, an equally-weighted global portfolio offers risk reduction opportunities for Polish investors and performance improvement potentials for US investors using monthly data from 1999 to 2008. In contrast with US investors, Polish investors seem to benefit from currency hedging.

Robert Kunkel and Joann Noe Cross add a different flavor to this collection. They show the positive impact of failure of Enron on firms in the same industry. Their findings indicate a strong industry-wide beneficial effect on the energy/utility firms after the failure of a large competitor. In the aggregate, the utility/energy firms in the sample make impressive gain in market share.

Our final paper by Joyce Wang deals with the choice between publicly issued and privately placed preferred stocks. Her findings demonstrate that private placement firms are characterized by high information asymmetry and high operating risk. The non Rule 144A private placement firms have higher information asymmetry than public offering firms. On the other hand, Rule 144A private placement firms indicate higher operating risk than public offering firms. The firms that issue at non-rule 144A are smaller, less levered, and less profitable than those that issue at rule 144A.

I hope you will enjoy the collection’s practical contributions.

Note

1. 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 45 states and over 15 different countries. The JFI is a peer reviewed Cabell listed journal of the Academy.

Monzurul HoqueGuest Editor