Call for Papers
Journal of Corporate Finance Special Issue
Corporate Failures: Declines, Collapses, and Scandals
Rebel A. Cole
College of Business, Florida Atlantic University (US)
College of Business, Florida Atlantic University (US)
Tilburg Law and Economics Centre (NL)
John Molson School of Business, Concordia University (CA)
Submission deadline: September 30, 2019
Conference details: Florida Atlantic University,
Boca Raton, Florida, February 29, 2020
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:
High Frequency Trading (HFT)
Initial Coin Offerings and Crypto Assets
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]), Sofia Johan ([log in to unmask]), and Denis Schweizer ([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 (https://www.journals.elsevier.com/journal-of-corporate-finance/) 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.)