Guest editorial

Citation

Yu, S. and Lord, R. (2010), "Guest editorial", Managerial Finance, Vol. 36 No. 7. https://doi.org/10.1108/mf.2010.00936gaa.001

Guest editorial

Article Type: Guest editorial From: Managerial Finance, Volume 36, Issue 7.

Dear Readers,

Southern Finance Association (SFA) was founded in 1960 and held its annual meeting in conjunction with the Southern Economics Association until 1989. Dr Ronnie Clayton, the Executive Director of the SFA works with an outstanding group of officers and directors, who have developed the association's annual conference into one of the most influential conferences in the USA. The SFA, in conjunction with the Southwestern Finance Association, sponsors Journal of Financial Research regarded as one of the top-20 finance journals worldwide.

The program chair of the 2008 Annual Meeting of the SFA (Dr Michael S. Pagano) organized numerous presentation sessions, panel discussions and workshops. This meeting was held between November 19 and 22 in Key West, Florida. Dr David Dennis was the 2008 SFA Distinguished Scholar. The SFA and its sponsors outstanding paper awards in each of the following categories: corporate finance, investments, international finance, empirical finance and financial institutions. In addition, the SFA sponsored competitive outstanding paper awards to three doctoral students.

More than 170 papers were presented at the 2008 Annual Meeting of the SFA. Of these, 30 finalists were selected for consideration for this publication. Out of these 30 papers, five were selected for publication in this special issue of Managerial Finance. The final selection was made in a double-blind peer-review process, and each paper was reviewed by at least two referees.

Our issue opens with an analysis of dynamic price discovery in an equity market by Paroush, Schwartz and Wolf. They argue that while implicit transaction costs and the tactical trading of informed participants are contributing factors to a U-shaped intra-day volatility pattern, they do not provide a sufficient explanation. Their model focuses on an additional factor – price discovery. This model allows investors with divergent expectations to respond rationally to each other's valuations, implies elevated volatility even when information is common knowledge.

Gosnell and Nejadmalayeri investigate how the levels of inflation, employment, consumption and business activity affect the degree and volatility of several risk factors. They conclude that personal income increases the volatility of the size premium while business inventories increase the volatility of the market premium.

This is followed by Kaushik, Pennathur and Barnhart's examination of the market timing ability and determinants of performance of sector mutual funds over the business cycle. They document that the benchmark used in the analysis (S&P vs sector specific) greatly influences the results. For example, sector funds demonstrate positive (negative) timing ability during recessions (expansions) when using the S&P 500 as the benchmark, but this timing ability disappears when sector-specific benchmarks are adopted.

Tompkins and Huang examine the role of corporate governance in abnormal returns around announcements of seasoned equity offerings (SEOs) using data not previously available to researchers. They reconfirm that investors react more favorably to SEOs by firms with stronger corporate governance mechanisms.

Finally, with the continued interest of the potential effects of female executives on earnings management, we conclude this issue with Vahamaa and Peni's analysis of the relation between earnings management and the gender of the firm's executives. With the evidence that firms with female CFOs are associated with income-decreasing discretionary accruals, they find that gender-based differences in conservatism and risk-aversion appear to be associated with important implications for financial reporting and corporate governance.

We hope that these articles contribute significantly to research in their respective areas, and that they lead to the formulation of productive new avenues of research. Last but not least, we would like to take this opportunity to express our sincere gratitude to the referees who spent enormous amounts of time to make this issue possible. Their in-depth and unbiased reviews have greatly enhanced the quality of this issue.

Sincerely,

Susana Yu and Richard LordSchool of Business, Montclair State University, Montclair, New Jersey, USA