*Call for Papers*

*Journal of Corporate Finance Special Issue*

*Corporate Failures: Declines, Collapses, and Scandals*

*Guest Editors*

*Rebel A. Cole*

Florida Atlantic University (US)

*Sofia Johan*

Florida Atlantic University (US)

*Denis Schweizer *John Molson School of Business, Concordia University (CA)

*Aims and Scope*

Corporate failures resulting from financial instability or scandal have
serious negative consequences for all stakeholders, including employees,
business partners, investors, creditors, auditors, regulators, capital
markets, and society at large. The impact is even more severe when these
events happen concurrently with economic stress, such as during the recent
financial crisis, or when they occur on an industrywide basis, such as with
the diesel emission scandal. This can lead to widespread negative effects
in a particular country, or even unfold contagion effects across countries
and industries. Furthermore, the effects of these events are usually
profound, and can range from long-lasting negative reputational damage to
the collapse of entire industries.

Establishing a clear understanding of the drivers of corporate failure is
key. Unfortunately, the task has been overly challenging for researchers,
partly because of misconceptions about how exactly to define it. Corporate
failure has generally been deemed the cessation of operations by a
corporation due to involvement in court procedures, or voluntary actions
such as bankruptcy. We believe in taking a somewhat broader view of
corporate failure, whereby a firm may be considered a failure if it does
not meet particular objectives set forth by shareholders, stakeholders, and
management. This type of failure is often linked with various agency
problems, ineffective corporate governance, and misplaced incentives.

Some recent scandals and corporate failures of large corporations have
underscored the impact on the capital market and society as a whole. They
have highlighted the need for regulators to rethink regulatory frameworks
and enforcement, and for corporations to rework their organizational
structures and business ethics. For example, the financial industry appears
especially prone to scandals, even after the hard lessons of the financial
crises. Several large global banks, including Deutsche Bank, Merrill Lynch,
Santander, JPMorgan, and Commerzbank, were involved in one of the largest
tax evasion trading schemes in history, referred to as "cum-ex," where bank
clients falsely claimed multiple tax rebates on capital gains taxes. This
resulted in treasury costs of about €55.2bn. Similarly, major banks were
accused of committing fraud and collusion in their rate submissions to
LIBOR, which is the underlying for many derivatives and contracts,
including mortgages.

However, even the perceived saviors in the finance arena called “Fintech”
have disrupted the industry itself by increasing the margin pressure on
established banks. Margin pressure was cited as the primary reason behind
Wells Fargo’s recent scandal, where the bank charged over 800,000 customers
for unwanted auto insurance. And Fintechs also seem to have become victims
of their own success and high growth. For example, shares of the financial
service provider Wirecard dropped by 25% on January 30, 2019, after it was
accused of using forged contracts in multiple suspicious transactions.

Another example is the rise of Initial Coin Offerings (ICOs). This *less*
regulated form of crowdsales, created to raise funds through a blockchain
by selling venture-related tokens or coins in exchange for legal tender or
cryptocurrencies, garnered enormous attention during 2017 and 2018. ICOs
ultimately raised tens of billions of dollars. Unfortunately, according to
Statis Group, about 80% of the transactions completed in 2017 have been
identified as scams.

All of these recent events have raised fundamental questions that will be
addressed in this special issue. We welcome the submission of research
papers on the following topics:

*Insider Trading*

   - What problems are associated with current insider trading regulations,
   and how can we improve the regulatory framework (e.g., penalties for
   breaking the law) to ensure effective enforcement of current laws?
   - What are the direct and indirect detection mechanisms for illegal
   insider trading? What is an optimal and reliable detection policy?
   - What ethical and economic issues are associated with insider trading,
   and how do they interact?

*Market Manipulation*

   - How do accounting scandals affect firm, market, and investor
   confidence? What are the most effective methods to restore investor
   confidence after a major corporate scandal?
   - What aspects of corporate governance structures and executive
   compensation schemes encourage or prevent managers from engaging in
   fraudulent or deceptive conduct?
   - How do disclosure-disciplining mechanisms in general, and shareholder
   litigation in particular, mitigate the problem of illegal or unethical
   insider behavior? What are the problems associated with the current laws,
   and what potential new regulations could improve the regulatory framework?

*Tax Evasion*

   - How does a firm’s corporate governance structure impact illegal tax
   evasion behavior? And how do managerial incentives (versus shareholder
   value maximization) motivate tax avoidance behavior?
   - What are the economic impacts of tax evasion on firm value, and how
   does it differ among countries with different legal and cultural
   - How do offshore intermediaries help firms evade taxes and violate
   regulations? What potential channels could improve regulation?
   - What are the most effective detection mechanisms to uncover tax
   evasion? And how does detection probability affect their use by firms?

*High Frequency Trading (HFT)*

   - What are the positive and negative impacts of HFT and algorithmic
   trading on the equity market?
   - What problems are associated with the current and suggested
   regulations on HFT (e.g., a per trade tax, implementation of fees,
   restricting the number of cancelled orders, etc.)? How can we improve HFT
   regulations in order to block potential channels for financial misconduct?
   - What are the potential ethical/legal problems arising from the use of
   sophisticated and high-speed computer programs for generating, routing, and
   executing orders? How does it affect investor confidence (and also fairness
   perception) in financial markets?

*Initial Coin Offerings and Crypto Assets*

   - What legal issues are associated blockchain-based coins and tokens?
   - What are the potential channels for digital currency scams, and how
   can the regulatory framework be improved to mitigate the problem?
   - What are the benefits and costs associated with crypto assets?
   - How should the Initial Coin Market be regulated?

*Details of Paper Submission and Due Date *

Interested contributors should submit preferably *full papers *(only in
English), but *extended abstracts* (1,000 to 1,500 words) may also be
considered if they show considerable promise* no later than September 30,
2019.* Papers are submitted to the attention of the Guest Editors Rebel
Cole (*[log in to unmask] <[log in to unmask]>*), Sofia Johan (*[log in to unmask]
<[log in to unmask]>*), and Denis Schweizer (*[log in to unmask]
<[log in to unmask]>*) with the subject heading: "Corporate
Failures: Declines, Collapses and Scandals."

Based on these drafts, the Guest Editors in consultation with the
Scientific Committee Members will select manuscripts that are most likely
to result in first-rate, high-impact publications. Authors will be notified
on or before November 30, 2019 if their papers are accepted for
presentation at the International Conference on Corporate Failures:
Declines, Collapses and Scandals that will be held the College of Business,
Florida Atlantic University (Boca Raton, U.S.) *February 29, 2020*.
Following the conference, authors will be invited to revise their papers
based on the Guest Editors’ comments and those from the discussants and
conference participants. Authors will then be asked to *submit their
revised version through the journal **portal (**) **by
August 1, 2020*, to be peer-reviewed by two anonymous referees based on
Guest Editors recommendation. Journal of Corporate Finance General Editors
will make final decisions. After the normal review process, we expect to
publish the Special Issue during the second half of 2021.

*The International Conference on Corporate Failures: Declines, Collapses
and Scandals* will be conjointly organized by John Molson School of
Business (Concordia University, Montreal, Canada) and Florida Atlantic
University (Boca Raton, U.S.)

AIB-L is brought to you by the Academy of International Business.
For information:
To post message: [log in to unmask]
For assistance:  [log in to unmask]
AIB-L is a moderated list.