Professor Receives JFE Award for Finance Research

PROVO, Utah – Oct 16, 2014 – Marriott School of Management finance professor Karl Diether recently garnered high recognition from the Journal of Financial Economics, receiving second place in the journal’s Fama/DFA Prizes for Capital Markets and Asset Pricing for an article he cowrote in 2013. The award is given annually for papers that demonstrate timely, relevant and high quality scientific research in financial economics.

“There are very few people who will ever receive an award like this in their career, so this speaks volumes toward the quality of work that Karl produces,” says Andrew Holmes, finance department chair.

The article, “Legislating Stock Prices,” examines the relationship between legislators’ voting patterns and stock prices. According to the authors’ research, legislators vote according to what will most benefit the top industries in their home states. Because legislators are so in tune with the way legislation will affect the industries they are interested in, it is possible to look at these legislator’s voting patterns and create an investing strategy that will beat the market by 10 percent when adjusted for risk.

Diether cowrote the article with Harvard Business School finance professors Lauren Cohen and Christopher Malloy and received $1,250 as part of the award.

“This is one of the top journals for finance, so just getting it published was great validation,” Diether says. “Winning the award takes it a step further. It’s nice to get this feedback and to hear that people think my work is high quality and interesting.”

The Marriott School is located at Brigham Young University, the largest privately owned, church-sponsored university in the United States. The school has nationally recognized programs in accounting, business management, entrepreneurship, finance, information systems and public management. The school’s mission is to prepare men and women of faith, character and professional ability for positions of leadership throughout the world. Approximately 3,000 students are enrolled in the Marriott School’s graduate and undergraduate programs.