1 First-Author Conditions: Evidence from Finance Journal Coauthorship Kam C. (Johnny) Chan Kam C. (Johnny) Chan Coauthors: Chris Brown and Carl Chen June 2010 Ling Tung University of Science & Tech

2 INTRODUCTION  Fact: increase in the number of multi-authored papers (both in eco and fin)  Perception: 1/N efforts from each of coauthors means more than 1/N rewards (from surveys and schools’ evaluation system)  Does it matter who be the senior author? Or the order of coauthors should be relative to their relative contribution (RC)? [refer to AMJ 1993 paper]

3  Fact: an increase in observed alphabetical ordering (AO) articles over time. AO rule outcomes are much larger than prob. predicted under RC rule. Why?  Engers, Gans, Grant, and King (1999, JPE) provide a game theoretical model to explain why AO, not RC, is the norm (theory).  Kissan, Laband, and Patil (2005, SEJ) suggest that AO ordered papers have higher quality (theory)

4  Laband and Tollison (2006): alphabetized coauthored econ papers with two authors are more highly cited than non- alphabetized coauthored papers.

5  What is new here?  Engers et al’s and Kissan et al’s models did not offer empirical evidence. We augment their models by providing evidence.  Provide a major large scale study  We examine finance coauthors, not economics

6  Engers at al ’ s model did not explain/incorporate:  significant deviations across different disciplines  deviations across journals within the same discipline  the number of coauthors (team size)  observed heterogeneity among coauthors.  Kissan et al ’ s model address quality and coauthors ’ order

7 OUR FINDINGS  The percentage of multi-authored papers increases over time during  67% (RQFA) to 96% (RFS) of the coauthored articles are AO rule. Heterogeneity among finance journals.

8 OUR FINDINGS (continued)  Prob. of AO rule increases with: Higher article quality Authors among higher ranked academic institutions Smaller team size Presence of European coauthor/ absence of Asian coauthor

9 ENGERS et al’s MODEL  Assumptions: coauthors have knowledge regarding the relative contribution of each coauthor actual bargaining occurs when an author whose name is lower in alphabetical order has actually made more contribution to the article relative to other coauthors.

10 ENGERS et al ’ s MODEL Actual contribution by coauthors Ordering rule / ordering outcome Signals to market A >= BAO rule; (A, B)Cannot distinguish AO or RC rules. A >= B RC rule; (A, B)Cannot distinguish AO or RC rule B > AAO rule; (A, B)No clear signal. May perceive A>B (weak signal) B > ARC rule; (B, A)Clear signal. B>A and A suffers

11  Engers et al’s conclusions: Asymmetric welfare implications. For B making more contribution: A’s loss in RC rule is more than A’s gain in AO rule (some outsiders may still think A did not make more contribution than B under AO rule). Everything else the same, in the bargaining process, B compensates A by adopting AO rule.

12 OUR EXTENSION  Needs to signal and the importance of signaling among coauthors.  The needs and importance of signaling reveal heterogeneity in article quality, institutions’ reputation, and local (cultural) factors.

13 EMPIRICAL MODEL  Prob. (AO is 1; otherwise 0) = f (X1, X2, X3, X4) X1 = Author and institutional heterogeneity. Average rank of all co-authors’ academic institutions X2 = team size. X3 = Article quality; journal’s familarity index, Length of an article and journal quality (top-3 finance journals) X4 = Cultural factors. The presence of European or Asian authors.

14 EXPECTED SIGNS (dept var: 1 for AO rule) FactorsSignReason Avg rank among all coauthors ?Authors in higher rank institutions does not need RC Team size-Share of the benefit drops as team size increase. Need RC. Article length+Higher quality article does not need RC. A bigger pie to share FARPI+Same Top-3 journals+Same Cultural factor ?Not sure

15 DATA and VARIABLES DESCRIPTION  Sample Articles in 23 finance journals during 1990~2008. Other department ranking studies use almost the same 21 journals (European Financial Management and Accounting and Finance are new)  16,225 articles; 11,597 co-authored articles; 10,960 articles with at least one academic author  9,059 (out of 10,960 articles) or almost 83% are AO rule

16  “Top 3”: J. of Finance, Journal of Financial Economics, and Review of Financial Studies.  Convert the total page count in each article to Journal of Finance equivalent pages (JF- equivalent pages) and rank academic institutions

17  Academic institutions in five levels (5 to 1) according to cumulative JF-equivalent pages; with 5 being the highest.

18 RESULTS  See MS WORD file.

19  Theory suggests that alphabetical order rule is the equilibrium outcome of bargaining. Empirical evidence seems to lend some support to the theory. CONCLUSIONS

20 CONCLUSIONS  We find the choice of alphabetical ordering versus relative contribution ordering is based on the quality of the article, heterogeneity in institutions, team size, and cultural and/or institutional differences among different regions of the world.

21 Some reflections from this project  Is it really important to be a senior author?  Do administrators need to consider the presence of AO rule in finance (economics or other disciplines)?  What is your attitude of coauthor order arrangement when you coauthor with someone else?

22 Digression (research in academic finance topics)  Note: not financial education research; but research on the finance profession  Why engage in this line of research?  Examine issues related to the finance (or our own discipline) profession;  Helpful to guide new professors and doctoral students;

23  Publishing opportunities for yourself (major journals would consider good studies);  Papers are easy to understand;  Research methods can be adapted to other disciplines or “borrowed” from other disciplines.

24  Major types:  Journal ranking [e.g., Chan, Lung, and Wolfe (JFEd, 2008), Chan and Liano (AF, 2008), Chen and Huang (JCF, 2007)]  Citation analyses (to rank …)

25  Program/departmental ranking [e.g., Chan, Chen, and Lung (PBFJ, 2005), Chan, Chen, and Lung (RQFA, 2007), and Chan, Chang, and Chen (EFM, forthcoming)]  Explain research productivity [e.g., Chan, Chen, and Fung (FR, 2009)]

26  Coauthorship issues (this paper) *share coauthorship credit; *alphabetical ordering of coauthors phenomenon; *coauthorship and individual research productivity.

27  Other topics *job mobility: Chan, Chen, and Steiner (FM, 2002); *errors in using top-journal articles as top articles: Smith (FM, 2004); *full professor promotion standard: Fishe (JF, 1998); …

28  My experience:  Need to do a good job in data collection;  Need to be careful to deal with individual author records (they would complain!);  Can borrow ideas from other disciplines;  A tedious process but it is ‘safe’ to publish a good paper

29  Have a (small) chance to publish in a top journal (Chan, Fung, and Lai in JIBS, 2005; Chan, Chan, Seow, and Tam in AOS, 2009)