Academic journal article Financial Management

Financial Management (1972-1994): A Retrospective

Academic journal article Financial Management

Financial Management (1972-1994): A Retrospective

Article excerpt

The Financial Management Association is celebrating the 25th anniversary of its founding as a decidedly successful organization. That success is due in no small part to its signature journal, Financial Management (FM). The need for a journal that would address issues of significance to business finance at the level of the firm was a primary impetus for creating the association. The founders believed that the area of business finance/financial management was being neglected at that time, and they were embarking on a major effort to broaden the scope of finance. Along with this effort was a desire to bridge the gap between the theory and practice of finance through an increased emphasis on innovative applications.

As part of the observance of this anniversary, it is fitting to look back and consider FM's evolution to meet the needs and interests of its readers and to identify its contributions to the field of finance. This paper provides evidence addressing these issues and reviews the papers published in FM since its inception. Section I examines the current influence Financial Management has on the profession. Section II describes the publication history of the journal and analyzes how the content has changed to meet the needs and interests of its readers. Section III identifies some of FM's most influential articles. The final section provides our conclusion.

I. Financial Management Today

The influence and success of a journal can be assessed in numerous ways. We use several different ways here, all of which demonstrate unambiguously FM's significant influence on finance. Articles assessing various aspects of the literature and the profession consistently include FM in their analyses. For example, Zivney and Reichenstein (1994) classify FM as a "core" journal, central to the communication of financial research. Other recent measures of professional standing consistently support such an assessment as well (e.g., Alexander and Mabry, 1994; Borokhovich, Bricker, and Simkins, 1994; Bertin, Prather, and Zivney, 1994).

One measure of a journal's distinction is its inclusion in the Social Sciences Citation Index (SSCI). Only sixteen of the fifty-five journals in Heck's (1994) Finance Literature Index are so included. Those sixteen journals are shown in Table 1.

Garfield (1986) describes the process of selecting journals for inclusion in the SSCI, which is based on several judgmental criteria. The journal must receive a substantial amount of citations from journals already included in the SSCI. The quality of the editorial board and the contributing authors are examined. Also, Garfield (1979) notes that the format of the journal's references should not require editing by the producer of SSCI, because such editing is expensive. The format is often the reason for the omission of journals that would otherwise seem to be appropriate to include.


An important method of evaluating a journal's influence on the profession (e.g., Schwert, 1993) is the influence of its published articles, as measured by citations to those articles. The SSCI publishes yearly "impact factors" for journals it includes, which are calculated on the basis of citation rates to articles appearing in the journal. The SSCI impact factor for a journal is calculated for year t by dividing the total number of citations in all SSCI-listed journals to articles published in the journal in years t-1 and t-2 by the number of articles published in the journal in year t.(1)

Table 1 also presents SSCI impact factors for the five most recent available years (1989 through 1993) for the sixteen journals for which impact factors were reported for at least one year. FM compares favorably with the other listed journals. In view of the nature of such comparisons, strict rank orders are probably inappropriate. Nonetheless, groupings of journals by impact factors are apparent. For example, over the five-year period, it appears that FM is most closely comparable to the Journal of Financial and Quantitative Analysis. …

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