My research examines how psychological forces shape financial decisions — from the behavior of individual investors to the choices of corporate executives and institutions. I am particularly interested in how personal traits, social norms, and incentives interact with financial markets and public policy.
To view ALL my research, please refer to my CV, Google Scholar, and SSRN.
Research Impact
Research has 7,000+ citations | Google Scholar
Research cited in 75+ countries | Web of Science
Selected Articles
Does finance make us less social?, with Mitch Warachka and Frank Yu, 2023, Journal of Financial and Quantitative Analysis 58, 1230-1262.
Summary: This study finds that greater participation in financial markets can lead individuals to become less socially connected, highlighting the broader societal consequences of financial decision-making.
Best Paper Award in category "Financial Markets & Institutions," Financial Management Association's Annual Meeting, 2020.
Visual finance: The pervasive effects of red on investor behavior, with William J. Bazley and Milica Mormann, 2021, Management Science 67, 5616-5641.
Summary: This paper shows that the color red, often used in financial interfaces, triggers avoidance behavior in investors and leads to more conservative financial decision-making.
Featured in The Wall Street Journal and Barron's.
When nudges are forever: Inertia in the Swedish Premium Pension Plan, with Richard H. Thaler and Frank Yu, 2018, AEA Papers & Proceedings 108, 153-158.
Summary: Studying Sweden's pension reform, this paper demonstrates that behavioral 'nudges' can have powerful and long-lasting effects on financial choices.
Featured in Nudge - The Final Edition, Chapter 10 "Do Nudges Last Forever? Perhaps in Sweden."
Shaped by their daughters: Executives, female socialization, and corporate social responsibility, with Frank Yu, 2017, Journal of Financial Economics 126, 543-562.
Summary: This research reveals that CEOs with daughters tend to make more socially responsible business decisions, suggesting that personal experiences shape corporate values.
Featured in Harvard Business Review, Forbes, and The Washington Post.
The origins of savings behavior, with Stephan Siegel, 2015, Journal of Political Economy 123, 123-169.
Summary: By studying twins, this paper finds that genetics and early-life family environment significantly influence lifelong saving behavior.
Featured in Time Magazine.
CEO contract design: How do strong principals do it?, with Rüdiger Fahlenbrach, 2013, Journal of Financial Economics 108, 659-674.
Summary: Analyzing CEO employment contracts, this paper shows how firms with private equity sponsors and strong corporate governance structures align executive incentives with shareholder interests.
Behavioral consistency in corporate finance: CEO personal and corporate leverage, with Anil K. Makhija and Scott E. Yonker, 2012, Journal of Financial Economics 103, 20-40.
Summary: This study uncovers a strong link between CEOs' personal borrowing habits and their companies' financial leverage, highlighting behavioral consistency across personal and professional domains.
Best Paper Award, Mitsui Finance Symposium, University of Michigan, Stephen M. Ross School of Business, 2010.
Featured in The New York Times.
Nature or nurture: What determines investor behavior?, with Amir Barnea and Stephan Siegel, 2010, Journal of Financial Economics, 98, 583-604.
Summary: Using a unique twin dataset, this paper finds that both genetics and upbringing play major roles in determining how individuals invest, bridging nature and nurture in financial behavior.
Best Paper Award in category "Investments," Financial Management Association's Annual Meeting, 2010.
Yihong Xia Best Paper Award, China International Conference in Finance, 2010.
Best Paper Award, The Rothschild Caesarea Center Annual Conference on "Recent Advances in Financial Economics Research,'' The Arison School of Business, Interdisciplinary Center (IDC) Herzliya, Israel, 2010.
Large shareholders and corporate policies, with Rüdiger Fahlenbrach, 2009, Review of Financial Studies 22, 3941-3976.
Summary: This research shows that large shareholders can significantly influence corporate strategies and policies, emphasizing the power of concentrated ownership in shaping firm behavior.
Do entrenched managers pay their workers more?, with Fredrik Heyman, Mattias Nilsson, Helena Svaleryd, and Jonas Vlachos, 2009, Journal of Finance 64, 309-339.
Summary: This paper finds that entrenched managers tend to pay higher wages, suggesting a link between managerial discretion and labor outcomes.
Best Paper Award, Financial Management Association (European meeting), 2006.
Research Award, Family Owned Business Institute, Grand Valley State University, 2005.
Selected Books and Chapters
A Companion to Decentralized Finance, Digital Assets, and Blockchain Technologies, with Désirée-Jessica Pély, and published by Edward Elgar Publishing, United Kingdom, 2024.
Behavioral and Social Corporate Finance, with Désirée-Jessica Pély, in Oxford Research Encyclopedia of Economics and Finance, edited by Jonathan Hamilton, Avinash Dixit, Sebastian Edwards, and Kenneth Judd, and published by Oxford University Press, United Kingdom, 2019.
Individual Investors, with Danling Jiang, in Financial Behavior: Players, Services, Products, and Markets, edited by H. Kent Baker, Greg Filbeck, and Victor Ricciardi, and published by Oxford University Press, United Kingdom, 2017.
Selected Current Projects
Corporate governance and the creation of the SEC, with Arevik Avedian, Marco Del Angel, and Marc D. Weidenmier, 2024.
Summary: Using a natural experiment around the SEC’s 1934 creation, the study finds that extending NYSE-style disclosure rules to all U.S. stock exchanges cut board independence by about one-third without raising valuations, showing how federal oversight can displace market-based governance mechanisms.
Outstanding Paper Award in category "Applied Corporate Finance," Midwest Finance Association's Annual Meeting, 2015.
Corporate divorces: An economic analysis of divested acquisitions, with Désirée-Jessica Pély, 2024.
Summary: Drawing on 1,365 S&P 500 acquisitions from 1983-2010, the study finds that nearly half are later undone because superficial pre-deal diligence and unforeseen industry shifts undermine match quality, whereas culturally and strategically aligned mergers endure.
Working-class CEOs: Formation of occupational norms and corporate labor policies, with Irena Hutton and Danling Jiang, 2019.
Summary: Using data on 1,626 U.S. executives, the study shows that CEOs raised in working-class households systematically invest less in employee-friendly policies, revealing how early-life socioeconomic experiences imprint occupational norms that shape corporate labor strategy.
Featured in Harvard Business Review.
© Henrik Cronqvist 2025