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Connections and Context in Finance Research
Author(s) -
Harford Jarrad
Publication year - 2018
Publication title -
asia‐pacific journal of financial studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.375
H-Index - 15
eISSN - 2041-6156
pISSN - 2041-9945
DOI - 10.1111/ajfs.12206
Subject(s) - context (archaeology) , corporate finance , event study , value (mathematics) , point (geometry) , event (particle physics) , enterprise value , business , accounting , economics , marketing , finance , computer science , geography , mathematics , physics , geometry , archaeology , quantum mechanics , machine learning
In this paper, I discuss my view of how research in corporate finance has, over time, added more context to our study of corporate activities. This has involved progressively moving from seminal event studies that provided the unconditional price response to an event, to using firm characteristics to condition the response, to industry and eventually network effects. I emphasize the potential of network analysis to substantially increase our understanding of the motivations, implications, and value effects of corporate activities. I further point to examples in the literature where this has been successful and provide some thoughts on future directions.