Sehoon Kim , Nitish Kumar , Jongsub Lee , Junho Oh
{"title":"ESG lending","authors":"Sehoon Kim , Nitish Kumar , Jongsub Lee , Junho Oh","doi":"10.1016/j.jfineco.2025.104150","DOIUrl":"10.1016/j.jfineco.2025.104150","url":null,"abstract":"<div><div>Firms increasingly borrow via sustainability-linked loans (SLLs), contractually tying spreads to their ESG performance. SLLs vary widely in transparency of disclosure regarding sustainability-related contract details and tend to be issued to borrowers with superior ESG profiles. While high-transparency SLL borrowers maintain this performance, low-transparency SLL borrowers exhibit significantly deteriorating ESG performance after issuance. Both high- and low-transparency borrowers pay substantial fees to obtain SLLs. The results are consistent with high-transparency borrowers using SLLs to “certify” their preexisting ESG commitments, but low-transparency borrowers “greenwashing” with empty SLL labels. Evidence on drawdowns, renegotiations, and stock market reactions further supports these interpretations.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"173 ","pages":"Article 104150"},"PeriodicalIF":10.4,"publicationDate":"2025-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144988885","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Arpit Gupta , Christopher Hansman , Pierre Mabille
{"title":"Financial constraints and the racial housing gap","authors":"Arpit Gupta , Christopher Hansman , Pierre Mabille","doi":"10.1016/j.jfineco.2025.104142","DOIUrl":"10.1016/j.jfineco.2025.104142","url":null,"abstract":"<div><div>We show that financial constraints lead to spatial misallocation and contribute to racial disparities in housing and wealth accumulation. Using bunching and difference-in-differences designs, we document that down payment constraints disproportionately limit the ability of Black households to access housing in high-opportunity areas. We build a dynamic life-cycle model to examine the long-term wealth effects of these leverage distortions on group differences in wealth accumulation. Black households are more affected by financial and spatial frictions, limiting wealth building opportunities. Improving mortgage access and housing supply in high-opportunity areas helps reduce racial wealth disparities, emphasizing the need for access to geographic opportunities rather than homeownership alone.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"173 ","pages":"Article 104142"},"PeriodicalIF":10.4,"publicationDate":"2025-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144921192","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Carlos F. Avenancio-León , Alessio Piccolo , Roberto Pinto
{"title":"Resilience in collective bargaining","authors":"Carlos F. Avenancio-León , Alessio Piccolo , Roberto Pinto","doi":"10.1016/j.jfineco.2025.104157","DOIUrl":"10.1016/j.jfineco.2025.104157","url":null,"abstract":"<div><div>A central finding of the theoretical literature on bargaining is that parties’ attitudes towards delay influence bargaining outcomes. However, the ability to endure delays, resilience, is often private information and hard to measure in most real-world contexts. In the context of collective bargaining, we show firms actively attempt to become <em>financially</em> resilient in anticipation of labor negotiations. Firms adjust their financial resilience to respond to the passage of right-to-work laws (RWLs). Unions’ financial structure also responds to RWLs. Our findings suggest resilience is key to understanding the process through which collective bargaining determines wages.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"173 ","pages":"Article 104157"},"PeriodicalIF":10.4,"publicationDate":"2025-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144912235","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Investor learning about monetary-policy transmission and the stock market","authors":"Daniel Andrei , Michael Hasler","doi":"10.1016/j.jfineco.2025.104154","DOIUrl":"10.1016/j.jfineco.2025.104154","url":null,"abstract":"<div><div>We model how investor learning about monetary-policy transmission impacts asset prices. In an asset-pricing model, investors learn from realized inflation surprises how effectively monetary policy steers future inflation. Downward revisions in perceived effectiveness raise expected inflation persistence, increasing return volatility and risk premia. These effects intensify when policy deviates significantly from neutral or monetary-transmission uncertainty is high. We estimate the model using U.S. macro and policy data from 1954 to 2023. The resulting dynamics align with observed patterns in equity returns and volatility. Empirical tests support the model’s core prediction: investor learning turns central-bank credibility into a priced risk factor.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"173 ","pages":"Article 104154"},"PeriodicalIF":10.4,"publicationDate":"2025-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144912234","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Carole Roan Gresenz , Jean M. Mitchell , Belicia Rodriguez , Crystal Wang , R. Scott Turner , Wilbert van der Klaauw
{"title":"The financial consequences of undiagnosed memory disorders","authors":"Carole Roan Gresenz , Jean M. Mitchell , Belicia Rodriguez , Crystal Wang , R. Scott Turner , Wilbert van der Klaauw","doi":"10.1016/j.jfineco.2025.104149","DOIUrl":"10.1016/j.jfineco.2025.104149","url":null,"abstract":"<div><div>We examine the effect of undiagnosed memory disorders on credit outcomes using individually-matched nationally representative credit reporting and Medicare data. We find effects of early stage disease, years before diagnosis, on a wide range of financial outcomes, including credit card account payment delinquency and amount of delinquent balance, credit utilization among credit card account holders, mortgage delinquency and delinquent balance amount, and credit scores. Effects are pervasive, affecting seniors in single and coupled households, racial/ethnic minorities and non-minorities, and older adults living in areas with higher and lower education levels. Early stage effects are greater among singles and Black individuals.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"172 ","pages":"Article 104149"},"PeriodicalIF":10.4,"publicationDate":"2025-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144866367","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Amit Goyal , Adam V. Reed , Esad Smajlbegovic , Amar Soebhag
{"title":"Stealthy shorts: Informed liquidity supply","authors":"Amit Goyal , Adam V. Reed , Esad Smajlbegovic , Amar Soebhag","doi":"10.1016/j.jfineco.2025.104155","DOIUrl":"10.1016/j.jfineco.2025.104155","url":null,"abstract":"<div><div>Short sellers are widely known to be informed, which would typically suggest that they demand liquidity. We obtain comprehensive transaction-level data to decompose daily short volume into liquidity-demanding and liquidity-supplying components. Contrary to conventional wisdom, we show that the most informed short sellers are actually liquidity suppliers, not liquidity demanders. They are particularly informative about future returns on news days and trade on prominent cross-sectional return anomalies. Our analysis suggests that market making and opportunistic risk-bearing are unlikely to explain these findings. Instead, our results align with recent market microstructure theory, pointing to strategic liquidity provision by informed traders.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"172 ","pages":"Article 104155"},"PeriodicalIF":10.4,"publicationDate":"2025-08-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144866368","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Thomas Dangl , Michael Halling , Jin Yu , Josef Zechner
{"title":"Social preferences and corporate investment","authors":"Thomas Dangl , Michael Halling , Jin Yu , Josef Zechner","doi":"10.1016/j.jfineco.2025.104139","DOIUrl":"10.1016/j.jfineco.2025.104139","url":null,"abstract":"<div><div>This paper presents a framework to study how investors’ social concerns affect technology choices. Consequentialist preferences (disutility from aggregate harm) influence outcomes only if investors coordinate, unless internalized harm is independent of an investor’s mass. Non-consequentialist preferences (disutility from stockholdings) affect outcomes regardless of coordination. Both preferences have stronger impact when risk-sharing consequences of technology supply are small (e.g., highly correlated returns), and their effects cannot be inferred from cost-of-capital differences. When harm is stochastic, polluting firms may appear less risky to social investors. Depending on type and strength of social preferences, this can support or hinder the green transition.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"172 ","pages":"Article 104139"},"PeriodicalIF":10.4,"publicationDate":"2025-08-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144829926","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Dmitriy Muravyev , Neil D. Pearson , Joshua M. Pollet
{"title":"Why does options market information predict stock returns?","authors":"Dmitriy Muravyev , Neil D. Pearson , Joshua M. Pollet","doi":"10.1016/j.jfineco.2025.104153","DOIUrl":"10.1016/j.jfineco.2025.104153","url":null,"abstract":"<div><div>Several influential studies show that transformations of implied volatilities calculated from options prices predict stock returns. This predictability is puzzling because market participants readily observe options prices. We find that this predictability is consistent with implied volatilities reflecting stock borrow fees that are known to predict stock returns. We derive a formula relating the option-implied volatility spread to the borrow fee. Motivated by this relation, we show that the return predictability from implied volatility spread and skew decreases by at least two-thirds if high-fee stocks are excluded. The patterns for other predictors computed from option implied volatilities are similar.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"172 ","pages":"Article 104153"},"PeriodicalIF":10.4,"publicationDate":"2025-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144827302","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Harry DeAngelo , Kathleen Kahle , Douglas J. Skinner
{"title":"Agency cost of free cash flow, capital allocation, and payouts","authors":"Harry DeAngelo , Kathleen Kahle , Douglas J. Skinner","doi":"10.1016/j.jfineco.2025.104117","DOIUrl":"10.1016/j.jfineco.2025.104117","url":null,"abstract":"<div><div>Jensen’s (1986) analysis of the agency costs of free cash flow radically transformed our understanding of corporate payout policy. This paper details the main pre-Jensen advances in the payout literature, explains how his analysis profoundly altered the way financial economists view payout policy, and discusses prominent regularities that provide real-world texture for understanding the importance of his insights about payout policy. These regularities include: (i) the dominance (measured as a percent of value or earnings) of the public equity markets by firms in the distribution phase of the corporate lifecycle; (ii) changes since the 1980s in aggregate cash payouts, the profitability of payers, payout rates, and the set of firms that dominate the payout supply; and (iii) the recent politicization of share repurchases.</div></div>","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"172 ","pages":"Article 104117"},"PeriodicalIF":10.4,"publicationDate":"2025-08-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144899044","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
George O. Aragon, Yuxiang Jiang, Juha Joenväärä, Cristian Ioan Tiu
{"title":"Responsible investing: Costs and benefits for university endowment funds","authors":"George O. Aragon, Yuxiang Jiang, Juha Joenväärä, Cristian Ioan Tiu","doi":"10.1016/j.jfineco.2025.104151","DOIUrl":"https://doi.org/10.1016/j.jfineco.2025.104151","url":null,"abstract":"We examine the adoption rates of responsible investment (RI) policies among university endowments. Adoption rates are higher among universities that face stakeholder pressure and are donation-dependent. Policy adoption predicts greater abnormal donations totaling 12 % of endowment assets, especially from “socially conscious” donors and during periods of higher media attention to climate change. Universities also experience greater student applications following adoptions. RI endowments have greater management costs, greater return volatility, and similar overall asset growth (donations plus net-of-cost investment income) compared to non-RI endowments. We conclude that RI policies are an important part of the optimal contract between universities and their stakeholders.","PeriodicalId":51346,"journal":{"name":"Journal of Financial Economics","volume":"94 1","pages":"104151"},"PeriodicalIF":8.9,"publicationDate":"2025-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144899046","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}