New Working Paper on Prestige in Financial Economics

Post date: Feb 27, 2013 7:57:09 PM

In this paper, I use an original dataset of 95 prestigious financial theorists to assess the relative strengths/weaknesses of performative approaches to finance economics. Find it here. And here's an abstract:

Constructing Financial Innovations: Performativity and Prestige in Financial Economics

This paper investigates the diffusion of financially innovative ideas, not by looking at the spread of individual financial practices, but rather by analyzing the intellectual realm where such ideas acquire prestige: financial economics. Using a dataset of 95 financial theorists, it shows that while some theorists have indeed succeeded in gaining intellectual recognition for innovations that find direct application in financial markets, as scholars focusing on the performativity of economics would predict, the more important pathway involves the exploitation of what Collins and Guillén (2012) have recently dubbed “mutual halo effects:” eminence builds up across generations and in terms of linkages between successful people. Training at Chicago appears to be an important source of innovative success, and the paper discusses why this is the case. The conclusions show how an understanding of financial economics as a field that turns its interdisciplinary origins into a professionally closed field (Whitley 1986b) invites new questions about the sources of its success, in particular its influence over how universities invest their endowments.