Academic journal article Quarterly Journal of Finance and Accounting

To Our Readers

Academic journal article Quarterly Journal of Finance and Accounting

To Our Readers

Article excerpt

This Special Issue addresses some of the major topics in corporate governance (capital structure, investments, portfolio performance, and risk assessment) that are of interest to investors, academics, and policy makers in the USA and around the world. We hope that the readers of this issue find much insight in the topics as we really enjoyed these papers. The Special Issue is based on papers presented at the Second World Finance Conference, held in Rhodes, Greece in the summer of 2011. The research presented in this issue covers evidence on these finance topics from many countries including the USA, Mexico, Chile and a subset of the newly democratic Eastern European countries.

We are slowly emerging from a major global financial crisis where it became evident that some of the tenets that we held to be true and beyond question need to be reconsidered. The crisis has forced us all to re-examine the role of financial institutions, credit availability, trading and market processes for their impacts on market stability, portfolio management and asset valuations.

We were witnesses to some of the most horrific collapses, where institutions that were previously viewed as "rock solid" failed. As market values of assets cratered, the Federal Reserve Bank and other regulatory authorities, both in the USA and around the world, had to step in to rescue both their own domestic corporations as well as international corporations. In many instances they did this by extending credit, providing market liquidity and altering trading practices and margin rules, as market speculators and short sellers were targeted for blame. Some firms emerged unscathed from the financial rubble and it was clear that they owed their survivals to the quality of their management and governance structures.

Fooladi and Rumsey address the issue of how to measure performance in portfolios where returns are reported by asset classes. They separate performance that is attributable to good individual asset selection and weight allocation from that which is merely due to luck and market timing. Wingender, Pettengill and Gondhalekar discuss the role of speculative short sellers, the use of put options and their role in the weekend effect on stocks. They find no evidence to support the hypothesis that short sellers cause the weekend effect in stocks, nor evidence that bearish traders primarily use put options. …

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