What's your Identification Strategy? Innovation in Corporate Finance Research

47 Pages Posted: 13 Jan 2014 Last revised: 24 Sep 2018

See all articles by Donald E. Bowen III

Donald E. Bowen III

Lehigh University

Laurent Frésard

Universita della Svizzera italiana (USI Lugano); Swiss Finance Institute

Jérôme Taillard

Babson College

Date Written: May 13, 2016

Abstract

We study the diffusion of techniques designed to identify causal relationships in corporate finance research. We estimate the diffusion started in the mid-nineties, lags twenty years compared to economics, and is now used in the majority of corporate finance articles. Consistent with recent theories of technology diffusion, the adoption varies across researchers based on individuals' expected net benefits of adoption. Younger scholars, holders of PhDs in economics, and those working at top institutions adopt faster. Adoption is accelerated through networks of colleagues and alumnis and is also facilitated by straddlers who cross-over from economics to finance. Our findings highlight new forces that explain the diffusion of innovation and shape the norms of academic research.

Keywords: corporate finance, identification, technology diffusion, causality

Suggested Citation

Bowen III, Donald E. and Frésard, Laurent and Taillard, Jérôme, What's your Identification Strategy? Innovation in Corporate Finance Research (May 13, 2016). Robert H. Smith School Research Paper. Available at SSRN: https://ssrn.com/abstract=2378460 or http://dx.doi.org/10.2139/ssrn.2378460

Donald E. Bowen III

Lehigh University ( email )

Bethlehem, PA 18015
United States

Laurent Frésard (Contact Author)

Universita della Svizzera italiana (USI Lugano) ( email )

Lugano, 900
Switzerland

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

Jérôme Taillard

Babson College ( email )

323 Tomasso Hall
Babson Park, MA 02457
United States
6145994184 (Phone)

HOME PAGE: http://https://www.babson.edu/academics/faculty/faculty-profiles/jerome-taillard.php

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