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Handbook of the Economics of Finance SET:Volumes 2A & 2B

Book Description

This two-volume set of 23 articles authoritatively describes recent scholarship in corporate finance and asset pricing. Volume 1 concentrates on corporate finance, encompassing topics such as financial innovation and securitization, dynamic security design, and family firms. Volume 2 focuses on asset pricing with articles on market liquidity, credit derivatives, and asset pricing theory, among others. Both volumes present scholarship about the 2008 financial crisis in contexts that highlight both continuity and divergence in research. For those who seek insightful perspectives and important details, they demonstrate how corporate finance studies have interpreted recent events and incorporated their lessons.



  • Covers core and newly-developing fields
  • Explains how the 2008 financial crises affected theoretical and empirical research
  • Exposes readers to a wide range of subjects described and analyzed by the best scholars

Table of Contents

  1. Cover
  2. Table of Contents
  3. Handbook of the Economics of Finance SET
    1. Cover image
    2. Title page
    3. Table of Contents
    4. Copyright
    5. Introduction to the Series
    6. Preface
    7. VOLUME2A Corporate Finance
      1. Chapter 1. Securitization
        1. 1 Introduction
        2. 2 Securitization: Some Institutional Details
        3. 3 Overview of the Performance of Asset-Backed Securities
        4. 4 A Simple Model of the Securitization Decision
        5. 5 The Origins of Securitization
        6. 6 Security Design and the Cost of Capital: Theory
        7. 7 Security Design and the Cost of Capital: Evidence
        8. 8 Securitization, Regulation, and Public Policy
        9. 9 Final Comments and Open Questions
        10. References
      2. Chapter 2. Dynamic Security Design and Corporate Financing
        1. 1 Introduction
        2. 2 Informational Problems in Static Models
        3. 3 Simple Securities in Dynamic Models
        4. 4 Optimal Dynamic Security Design under Moral Hazard
        5. 5 Asymmetric Information in Dynamic Settings
        6. References
      3. Chapter 3. Do Taxes Affect Corporate Decisions? A Review
        1. 1 Introduction
        2. 2 Taxes and Capital Structure—The US Tax System
        3. 3 Taxes and Capital Structure—Multinational Tax Issues
        4. 4 Taxes, LBOs, Corporate Restructuring, and Organizational Form
        5. 5 Taxes and Payout Policy
        6. 6 Taxes and Compensation Policy
        7. 7 Taxes, Corporate Risk Management, and Earnings Management
        8. 8 Tax Shelters
        9. 9 Summary and Suggestions for Future Research
        10. References
      4. Chapter 4. Executive Compensation: Where We Are, and How We Got There
        1. 1 Introduction
        2. 2 Where We are: A Primer on Executive Compensation
        3. 3 How We Got There: A Brief History of CEO Pay
        4. 4 International Comparisons: Are US CEOs Still Paid More?
        5. 5 Towards a General Theory of Executive Compensation
        6. References
      5. Chapter 5. Behavioral Corporate Finance: An Updated Survey
        1. 1 Introduction
        2. 2 Market Timing and Catering
        3. 3 Managerial Biases
        4. 4 Behavioral Signaling
        5. 5 Some Open Questions
        6. References
      6. Chapter 6. Law and Finance After a Decade of Research
        1. 1 Introduction
        2. 2 Background on Legal Origins
        3. 3 Some Evidence
        4. 4 Explaining the Facts
        5. 5 Legal Origins and Culture
        6. 6. Legal Origins and Politics
        7. 7 Legal Origins and History
        8. 8 Conclusion
        9. References
      7. Chapter 7. Endogeneity in Empirical Corporate Finance
        1. 1 Introduction
        2. 2 The Causes and Consequences of Endogeneity
        3. 3 Instrumental Variables
        4. 4 Difference-in-Differences Estimators
        5. 5 Regression Discontinuity Design
        6. 6 Matching Methods
        7. 7 Panel Data Methods
        8. 8 Econometric Solutions to Measurement Error
        9. 9 Conclusion
        10. References
      8. Chapter 8. A Survey of Venture Capital Research
        1. 1 Introduction
        2. 2 Data Sources and Methodology for Empirical Research
        3. 3 Venture Capital Investments in Entrepreneurial Companies
        4. 4 The Analysis of Venture Capital Firms
        5. 5 Returns to Venture Capital Investments
        6. 6 Venture Capital and the Economy
        7. 7 Conclusion
        8. References
      9. Chapter 9. Entrepreneurship and the Family Firm
        1. 1 Creative Destruction and the Family Firm
        2. 2 The Succession Decision
        3. 3 Economic Development and the Family Firm
        4. 4 The Importance of Oligarchs
        5. 5 Schumpeter and Chandler, Reconciled?
        6. References
      10. Chapter 10. Financing in Developing Countries
        1. 1 Introduction
        2. 2 Stylized Facts About Firms in Developing Countries
        3. 3 Firms in Developing Countries—Theories and Empirical Research Issues
        4. 4 Institutions and Access to Finance in Developing Countries
        5. 5 Firm Financing in Developing Countries
        6. 6 Bank-based Versus Market-based Systems
        7. 7 Formal and Informal Systems
        8. 8 Conclusion
        9. References
      11. Chapter 11. Financial Intermediation, Markets, and Alternative Financial Sectors
        1. 1 Introduction
        2. 2 State of the Financial System and Firms’ Financing Channels
        3. 3 Firms’ Financing Channels: The Role of Alternative Finance
        4. 4 Comparing Traditional and Alternative Financial Sectors
        5. 5 Concluding Remarks
        6. References
    8. Index
  4. Handbook of the Economics of Finance SET
    1. Cover image
    2. Title page
    3. Table of Contents
    4. Copyright
    5. Introduction to the Series
    6. Preface
    7. VOLUME 2B Financial Markets and Asset Pricing
      1. Chapter 12. Advances in Consumption-Based Asset Pricing: Empirical Tests
        1. 1 Introduction
        2. 2 Consumption-Based Models: Notation and Background
        3. 3 GMM and Consumption-Based Models
        4. 4 Euler Equation Errors and Consumption-Based Models
        5. 5 Scaled Consumption-Based Models
        6. 6 Asset Pricing with Recursive Preferences
        7. 7 Stochastic Consumption Volatility
        8. 8 Asset Pricing with Habits
        9. 9 Asset Pricing with Heterogeneous Consumers and Limited Stock Market Participation
        10. 10 Conclusion
        11. References
      2. Chapter 13. Bond Pricing and the Macroeconomy
        1. 1 Introduction
        2. 2 A Factor Model
        3. 3 No-Arbitrage Restrictions
        4. 4 The Variation of Yields with the Macroeconomy: US Evidence
        5. 5 Modeling Risk Premia
        6. 6 New Keynesian Models
        7. 7 Concluding Comments
        8. References
      3. Chapter 14. Investment Performance: A Review and Synthesis
        1. 1 Introduction
        2. 2 The Stochastic Discount Factor (SDF) Framework
        3. 3 Performance Measures
        4. 4 Implementation Issues and Empirical Examples
        5. 5 Fund Managers’ Incentives and Investor Behavior
        6. 6 Conclusions
        7. References
      4. Chapter 15. Mutual Funds
        1. 1 Introduction
        2. 2 Issues with Open-End Funds
        3. 3 Closed-End Funds
        4. 4 Exchange-Traded Funds (ETFs)
        5. 5 Conclusion
        6. References
      5. Chapter 16. Hedge Funds
        1. 1 The Hedge Fund Business Model—A Historical Perspective
        2. 2 Empirical Evidence of Hedge Fund Performance
        3. 3 The Risk in Hedge Fund Strategies
        4. 4 Where Do Investors Go From Here?
        5. 4.2 Risk Management and a Tale of Two Risks
        6. References
      6. Chapter 17. Financial Risk Measurement for Financial Risk Management
        1. 1 Introduction
        2. 2 Conditional Portfolio-Level Risk Analysis
        3. 3 Conditional Asset-Level Risk Analysis
        4. 4 Conditioning on Macroeconomic Fundamentals
        5. 5 Concluding Remarks
        6. References
      7. Chapter 18. Bubbles, Financial Crises, and Systemic Risk
        1. 1 Introduction
        2. 2 A Brief Historical Overview of Bubbles and Crises
        3. 3 Bubbles
        4. 4 Crises
        5. 5 Measuring Systemic Risk
        6. 6 Conclusion
        7. References
      8. Chapter 19. Market Liquidity—Theory and Empirical Evidence
        1. 1 Introduction
        2. 2 Theory
        3. 3 Empirical Evidence
        4. 4 Conclusion
        5. References
      9. Chapter 20. Credit Derivatives
        1. 1 Introduction
        2. 2 Risk-Neutral Default Probability Estimates
        3. 3 Physical Default Probability Estimates
        4. 4 Credit Default Swaps
        5. 5 Collateralized Debt Obligations
        6. 6 Credit Derivatives and the Crisis
        7. 7 Conclusions
        8. References
      10. Chapter 21. Household Finance: An Emerging Field
        1. 1 The Rise of Household Finance
        2. 2 Facts About Household Assets and Liabilities
        3. 3 Household Risk Preferences and Beliefs: What Do We Know?
        4. 4 Household Portfolio Decisions, from Normative Models to Observed Behavior
        5. 5 Household Borrowing Decisions
        6. 6 Conclusion
        7. References
      11. Chapter 22. The Behavior of Individual Investors
        1. 1 The Performance of Individual Investors
        2. 2 Why do Individual Investors Underperform?
        3. 3 The Disposition Effect: Selling Winners and Holding Losers
        4. 4 Reinforcement Learning
        5. 5 Attention: Chasing the Action
        6. 6 Failure to Diversify
        7. 7 Are Individual Investors Contrarians?
        8. 8 Conclusion
        9. References
      12. Chapter 23. Risk Pricing over Alternative Investment Horizons
        1. 1 Introduction
        2. 2 Stochastic Discount Factor Dynamics
        3. 3 Cash-Flow Pricing
        4. 4 Market Restrictions
        5. 5 Conclusions
        6. References
      13. Index